1. What is your intention for the unit? Is it a rental, are you moving in or selling?
Spend less upgrading a rental property because renters are unlikely to pay a significant premium for a unit with upgrades. You may recover that money on the resale but it probably won’t come through higher rents.
2. How good are the basic level of finishes?
The finishes in the building we invest in generally have excellent finishes. Standard finishes include; stainless steel or built in appliances, stone counters, laminate or engineered hardwood flooring, etc. Sometimes it may be worth it for one of the cheaper upgrades just to get a better colour pallet. On one unit we recently spent $500 just to upgrade to more elegant colours.
3. How much is the unit worth?
A condo selling for over $1,000,000 vs. $400,000 may be more desirable on the rental and resale market when it has upgraded finishes. Note: This isn’t what you paid 4 years ago but what they are worth today. When you are trying to sell a condo for a million dollars it should be stunning and not have the most basic of everything. We help our clients decide if the unit should be upgraded or not.
4. What colour finishes should you focus on?
A general rule of thumb is to pick neutral colours. Light flooring doesn’t show dirt as much as darker flooring and lighter units always feel more spacious than darker units. There are exceptions to this rule, but most of the time we focus on light colours, especially if it is a smaller size unit that will be for generating rental income.
5. How competitive is developer pricing for the upgrades?
It really depends on the developer. Sometimes they are much cheaper than upgrading the unit yourself, other times upgrades can be overpriced and they are selling you on the convenience of upgrading through the developer. It can pay to do a little research. Even just checking homedepot.ca while you are in the sales centre could be enough. Again, we are always here to help our clients!
6. Are going to be making major changes?
If you are looking at spending significant money upgrading a unit it may make sense to leave it as basic as possible and then do the rest yourself when the unit is ready. This gives you way more options and most of the time allows you to get better value.
Bottom line from an investment point of view, don’t overspend on your upgrades and we are always here to help.
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