Home: 2 questions frequently asked by homeowners

By Adèle Manseau

With spring comes spring cleaning. For many homeowners, it's a time to start thinking about big projects.

We used your questions and comments as inspiration to talk about 2 things that concern homeowners.

1. Is it better to sell or renovate?

It comes down to deciding between "my needs are changing but I like where I am" and "my needs are changing and I want a change of scenery." Either way, the desire or the need for change is there. All that's left is to determine which scenario is better for you financially, in both the short and long term.

Everyone has their own combination of reasons for deciding whether to renovate or to sell:

Renovate

Energy efficiency
Comfort
Growing family
Better security
Improving for a sale
Municipal regulations
A fresh new look

Sell

Changing jobs
Loss of income
Family reasons
High costs (mortgage, taxes, maintenance, etc.)
Significant renovations required
Ready for a change

Questions to ask yourself:

What are your current needs?
What are your medium- and long-term plans?
What are the problems with your current home?
Are they easy to fix? How?
Are you ready for a quick sale? Could you sell as-is or would you renovate first?
What use do you get out of your yard?
Do you still like the neighbourhood?

Costs to consider:

Option 1: renovating

The cost of the renovations isn't a hard figure. Plans often change when something unexpected pops up—which can increase delays and costs.
Are the renovations a "good" investment?
Financing for renovations

These articles may also be useful:

Option 2: moving

The difference in value between your current home and the one you want
The difference in fixed costs at your current home and the one you want
Start-up costs, usually about 3% of the value of the property you want:
- The cost of selling your home (broker commission, notary/lawyer, mortgage prepayment penalty, location certificate, inspection, etc.)
- The cost of buying a home (moving, transfer taxes, renovations, notary/lawyer, inspection, sales tax for a new house, property tax adjustments, utility hookups, etc.)
Your next mortgage depending on what you can or want to pay

2. Is it better to repay my mortgage or invest?

The question of repaying debts versus investing is an important one, because the answer depends a lot on your financial situation.

How you answer it depends on a comparison between the interest rate on your mortgage (and other debts) and the rate of return on your investments and your expected tax return.

It's best to talk to your advisor so you can run scenarios that will point you toward the best strategy for you.

For other tax strategies: How to reduce your tax bill—5 questions answered