By Lindsay Smith/Columnist
Over the past month I have had some intriguing conversations with several clients and business owners. Mike Sargeant works for AGM. (www.agmrenovations.com) His company has been focused for years on doing renovations, primarily finished basements and creating legal accessory basement apartments. Another, Lindsay Wright, is the owner of Interior Woodcraft Design, specializing in custom cabinetry. (www.interiorwoodcraftdesigns.com) I reached out to both of them after reading an article how some home renovation companies were pivoting and offering work at home offices to help with the many people choosing to work from their homes. I was shocked at how both were busy creating work at home spaces in homes for people.
So the question came to mind – “Does investing in a home office increase the value of a home?” Let’s dig into the question to see if we can get some clarity.
Home offices start at around $5,000 to $10,000 and can go up to, well, as much as you are prepared to spend. Using the low side of the renovation, changes and new items can include redrawing floor plans, custom built-ins or ready made cabinetry, lighting, dedicated wiring/cabling (for high speed internet), desks and other office related furniture and upgrading computers/printers. Some of the more costly additions can be adding a kitchenette or bath. The end result can be an office that looks like a library in a law office or a bare-bones space in an unused part of the main floor or basement.
Back to the question about offices increasing real estate values. The value the new space may create could come by way of cost and tax savings rather than an increase in home value. If a homeowner finds themselves working out of their home, there may be savings in commuting and any extra costs involved in working away from home. A quick check with GO Transit shows a full-time worker traveling daily to Toronto from Oshawa would save about $400 per month by not commuting, along with buying lunches and coffee away from the home. Another factor is that by using your home as a place of work you may be intitled to a CRA tax benefit for property taxes, insurance, utilities and mortgage interest. There are definite savings to be realized by creating a work at home space.
I have dodged the question about the home value increasing with the addition of a dedicated work at home space. My experience says, “maybe.” If your home is on the larger size and there is room that can by changed without limiting the use of the home, I could see the value being increased, however, if (like the home I currently live in) the home has three bedrooms and one of the rooms would need to be used, it might be viewed as a negative feature if the home was placed on the market for sale. In a perfect world, a home office would be created on the main or second floor with large windows. Again, many floor plans would best accommodate the office in the basement without windows. This may be a wash for value.
Effy Terry, owner of www.organizethat.ca added that some homeowners have opted to create “flex-rooms.” She explained that some of her clients have opted to create multi-use rooms that can be used for office space, craft rooms or play rooms as the needs of the family change. In this way, money spent on renovations can be enjoyed in multiple ways, and when the home is ultimately sold the investment can be viewed in ways that would appeal to a larger group of buyers.
How long we are in this pandemic is anyone’s guess, however, my instincts have me believing that once people get comfortable with working from home and the businesses see a cost benefit to having less office space, this will be a long term trend. History shows that during a crisis creativity spikes and over the next few years the innovation with home office space will be amazing.
If you have any questions about the above information, or if you see a personal real estate emergency on the horizon, I can be reached at firstname.lastname@example.org.
Keller Williams Brokerage Inc