Adèle Manseau | Desjardins Group
When the time comes to sell your house, it might be easy to get carried away in the excitement of it all!
Here are 3 things to consider when setting your expectations:
1- Which renovations pay off?
The kitchen and the bathroom are the most important rooms in your home. While the others might be useful, these two rooms fulfill 2 important universal needs. And that's great, since renovating them can help you get a better return on investment, according to the Appraisal Institute of Canada.
Even if you renovated for your own personal use, these improvements will have an impact when it's time to sell. Windows are also very important--and replacing them helps you cut down on your energy costs!
You might also like: Home renovation: value and trends
2- Don't forget the costs associated with the sale!
Are you already imagining the profit you'll make on your house? It's okay to dream, but don't count your chickens before they're hatched!
There are a number of expenses that will affect the amount you receive in the end:
- Real estate commission: If you're selling through an agent, remember that their commission will be calculated on the sales price. You can negotiate this cost, taxes will also apply.
- Renovation costs, or a reduced sales price to offset any required renovations detected during inspection
- Location certificate: If yours is a little too old
- Mortgage: If you have one, don't forget any release fees and penalties that you may incur for early repayment
- Moving costs
3- What should you do with the money from the sale?
You've made it: the house is sold and you know the net amount you're getting out of it. What do you want to do with the money--pay off your debts or invest in your RRSP?
Angela Iermieri*, a financial planner with Desjardins, says that it's always better to pay off your debts. That way, you'll retire with as few financial commitments as possible. Depending on your situation, how old you are, whether or not you're retired, and if you still have RRSP contribution room available, you could contribute to your RRSP. If not, you might choose a TFSA.
To grow your money and get the most out of it while reducing your tax burden, contact an advisor. They can help you build a portfolio that suits your investor profile.
* Financial Planner and Mutual Funds Representative for Desjardins Financial Services Firm Inc.