While it is still relatively rare, we are starting to see some homes in Toronto and the GTA that have built out an accessory dwelling unit on their lot, in the form of a laneway house or garden suite.

As provincial and municipal governments made changes to legislation to allow such additions to be built, we have started to get questions from our clients.  In some cases, they want to know what the return on investment would be if they built one, but the more common question is whether one of their neighbours would be allowed to do so.

That is a complicated question and we thought we’d spell out some of the history around laneway houses and garden suites and talk about the current state of affairs in Toronto and the GTA.

First, a history lesson.

For quite a while, there wasn’t too much going on with this type of housing, as Ontario’s zoning laws did not allow detached secondary dwellings, such as garden suites or laneway houses, in most urban residential areas. While basement apartments were permitted in some cases, separate backyard or laneway homes were not widely accepted.

In the early 2000s, Ontario introduced policies supporting additional dwelling units (ADUs), but local zoning bylaws remained restrictive. In 2018, the City of Toronto amended its rules to allow laneway houses—small residential units behind existing homes, facing laneways. This marked a significant step toward legalizing detached ADUs, but it faced consistent local opposition and we didn’t see much uptake despite it being technically allowed.

In 2019, the Ontario government updated the Planning Act to require municipalities to permit both garden suites (detached backyard homes) and laneway houses. In 2022, Bill 23 (More Homes Built Faster Act) further expanded these rights, allowing up to three residential units per lot (one primary dwelling and two additional units, such as a basement apartment, garden suite, or laneway house).  Again, despite the fact that it was permitted by legislation, municipalities were given the ability to set the parameters around how such approvals would be granted – or denied.  In many cases, the requirements were so stringent that very few properties would actually qualify for approval.

Since then, while many Ontario cities have updated their bylaws to support these housing options, challenges remain, including high construction costs, infrastructure limitations, and municipal approval processes. Efforts continue to streamline regulations and increase adoption of garden suites and laneway houses as a way to address housing shortages, but in our opinion, it remains a very, very small part of the housing market and will not make a material impact on housing affordability.

Not in my backyard!  Wait, not in my neighbour’s backyard, please.

The question of whether a laneway house or garden suite can be built on a given property is very much dependent on the municipality and the requirements they set for approval of a laneway house or garden suite.

When the City of Toronto began establishing the regulations for garden suites back in 2019, we were part of a TRREB committee that was part of the consultation process.  During that meeting it became pretty clear that while Toronto – like all municipalities in Ontario – was required to allow garden suites under the revised Ontario Planning Act, they weren’t going to make it possible for most properties to qualify.

In the years that followed, we saw very restrictive requirements set in many municipalities in the GTA.  While major urban centres like Toronto have arguably the highest need for increased density, they also tend to have much smaller lot dimensions than in other parts of the 905 area code.  At the same time, properties in smaller towns or more rural settings often have larger lots, but little demand or interest in building ADUs onto those properties.

A good starting point for determining if you (or your neighbour) can (or can’t) build a laneway house or garden suite is the local planning department.  Here’s links to them!

• City of Toronto: https://www.toronto.ca/city-government/planning-development/
• Peel Region: https://www.peelregion.ca/planning/
• Durham Region: https://www.durham.ca/en/doing-business/planning-and-development.aspx
• Halton Region: https://www.halton.ca/For-Residents/Planning-and-Development
• York Region: https://www.york.ca/planning-development
• Dufferin County: https://www.dufferincounty.ca/planning-development
• Simcoe County: https://www.simcoe.ca/dpt/pln

These websites provide the most up-to-date regulations and planning guidelines for laneway houses and garden suites in each region and are the start of the journey to determining what is possible for a given property.  Depending on where you live, you might be better off starting at your municipality planning department as they may very well have their own version of what is permitted for ADUs.

If you’re looking for more detailed information or trying to sort out the feasibility of creating an ADU on your property, we’re happy to provide an introduction to professionals who work in exactly that field.  Get in touch with us with your specifics and we’ll make it happen!

When we say that we’re often asked what renovation has the best return on investment, we mean it.  It might not be the most common question we get, as that award goes to the near constant “So, how’s the market doing?”, but it is definitely one we get all the time.

We originally wrote an article about it back in 2011, then again in 2016, so it seems like time to update our answer once again.  We say, “update our answer”, but the fundamentals of what is worth doing don’t really change.  Yes, there are design trends that come and go, but we don’t focus on what’s in this year or featured in celebrity home profiles.  After all, carpeted bathrooms and textured walls were once considered the height of design in homes and neither have aged very well.

Instead of looking at design trends, we look for what’s always of value to buyers, based on our daily and ongoing interactions with buyers. Let’s review what we’ve said in our past articles and what we say now and see if we’re in fact as consistent as we think.

It’s 2011!

This article was short and sweet and our first attempt at answering the question of whether a renovation a homeowner is thinking of doing will pay for itself in the form of a higher sale price when they look to sell the home.

This is a crucial question, made even more relevant by the fact that many homeowners don’t do the renovations until right before they sell.  At that point, they’re very much focused on whether it will add value as they may still have the balance sitting on a credit card!

We began the article by pointing out that certain renovations add features to a home that mean you can attract interest from a buyer who would not have even considered your house before it was done.  Many buyers don’t want to see houses without central air conditioning, and a master bathroom with a shower instead of a bath is not appealing to buyers with babies or young children.  Renovations that address such issues as these may cause offers to show up that may not have otherwise happened.

We finished the article with a list of payback ranges of typical renovations, provided by the Appraisal Institute of Canada.  Even back in 2011 it was hard to find Canadian stats and the below payback ranges were actually from a study done in 2006.

Payback Range of Typical Renovations

• Bathroom renovation (75 – 100%)
• Kitchen renovation (75 – 100%)
• Interior painting (50 – 100%)
• Exterior painting (50 – 100%)
• Roof shingle replacement (50 – 80%)
• Furnace/heating system (50 – 80%)
• Basement renovation (50 – 75%)
• Recreation room addition (50 – 75%)
• Installing a fireplace (50 – 75%)
• Flooring (50 – 75%)
• Constructing a garage (50 – 75%)
• Window/door replacement (50 – 75%)
• Building a deck (50 – 75%)
• Central air conditioning (25 – 75%)

You’ll note that none of the above payback ranges exceed 100% and a fair number of them start at 50% payback.  The highest range was for bathroom and kitchen renovations and we think that this is a function of how disruptive such renovations are for homeowners.  If you renovate a kitchen, get used to ordering takeout and cooking in microwaves for a number of months!  If you choose a bathroom reno, here’s hoping you have a spare full bathroom in the home, otherwise you better have (close) friends or family nearby who don’t mind your family using their shower!

Five..years…later.

This article was an update on the one we wrote in 2011, and given that original article used statistics from the Appraisal Institute of Canada from 2006, it was time for an update!  After all, in 2016 it was a decade since the Appraisal Institute of Canada’s rates of return on common renovations as listed above.

We weren’t able to update with more recent stats from the Appraisal Institute of Canada, as it appeared that they had gotten out of the Return On Renovations game.  While we could find lots of reference to a 2012 report by the AIC about the “best” renovations, they stopped referencing percentage returns anymore.  A tool they created called RENOVA that did those calculations was also no longer present in any form on their website.  It is so completely gone from the internet that we fear the good folks at AIC might have become embarrassed by it.

In the absence of any stats, this article was more focused on how the renovations that give you the best bang for your buck are where you turn a negative into a positive (or at least a neutral).

• Have a kitchen that was redone in 2005 that looks a little passe but is otherwise functional? Don’t renovate it and expect to recover those big dollars.
• Have a bathroom that has a tub with rust stains, a floor with cracked tiles and water stains on the ceiling? Renovate it and take it to at least a basic Home Depot style of new appearance and functionality and that is money very well spent.

The advice we gave back then that is still what we recommend to clients to this day.

If a space or attribute is safe and functional but not the most attractive or modern style, we generally recommend not renovating it.

There is nothing as frustrating as spending money on a renovation, only to have your renovation not be to the taste of the potential home buyer.  We have seen many kitchen backsplashes and countertops that were installed just before a sale being ripped out by new buyers.

Welcome to now.

Given we’ve been answering this question for 14 years now, we’re pleased to tell you that we’ve continued to refine our answer.

First off, we previously wrote a whole separate article on the logic and theory behind what to renovate and what to leave and you can read it here.

We promised some actual rates of return and not just philosophical musings, so let’s give you the goods.  It remains challenging to find Canadian specific stats that we deem reliable, whereas there are some very good US-based sites that have rates of return for various projects.

Our favourite comes from an organization called Zonda, that focuses on critical insights to move the housing industry forward.  They have a slogan of “Better data, better communities” and we’re fully on board!

You can find the 2024 Cost Vs Value report here.

Let’s cherry pick a few of the projects and give you our thoughts.  They are saying that the three best renovations are:

• Garage Door Replacement, which has a 193% return
• Steel Entry Door Replacement, which has a 188% return
• Manufactured Stone Veneer, which has a 153% return

We wonder if the first two have such high returns due to combining both increased visual appeal as well as higher security.  With climate change impacting many parts of the US, a secure garage and front door may be attractive both in terms of looks as well as to keep your home safe and secure.  Even the adding of a stone veneer, while primarily cosmetic, could feel like it would help keep the home safe from water and wind.

Rounding out the top five (but not getting all of the cost back) are two largely cosmetic projects.

• Fibreglass Grand Entrance, which has a 97% return
• Minor Kitchen Remodel (Midrange), which has a 96% return

The grand entrance addition adds curb appeal and certainly makes sense as to us in that it would appeal to more buyers.  The kitchen remodel is also a popular project, and we appreciate that they specified minor and midrange.  If you look much further down on the list, a major kitchen remodel (again, midrange) only has a 49.5% return.  The upscale version is even lower, at 38%.

This holds true for many other common projects, where a minor version gives you a better return than a major renovation, and midrange is consistently a better return than upscale or luxury versions.

A similar logic is in place for the quality of materials for other projects.  Adding in a wood deck addition gets you a 83% return, whereas a composite material (typically considered more durable and requiring less maintenance) gets you only a 68%, despite costing considerably more.

The bottom three renovations in terms of return on investment are:

• Midrange Bathroom Addition, with a return of just 34%
• Upscale Bathroom Addition, with a return of just 32%
• Upscale Primary Suite Addition, with a return of just 23%

We would argue that a midrange bathroom addition which takes your home from a one bathroom home to a two bathroom home would have a better return, but we can see how adding a 3rd or 4th bathroom would not be something that buyers would necessarily pay a significant premium for in their purchase.

The lessons from this latest review are pretty clear.  Fix what is broken or terrible, but don’t make it the newest, luxury version of it.  If you hot water tank is broken, replace it with a similar one.  If you decide to splurge on a tankless hot water system that is then installed beside your 35 year old furnace, don’t expect to get the cost back from a buyer.  Make sure the renovation is at least to a similar standard as to the rest of the home, but don’t spend money on a standout attribute right before you sell.  Such gleaming, fancy new aspects can often make the rest of the home look shabby in comparison.

If you’re thinking about moving and want to know what buyers in your area and price range love to see in a home, get in touch with us.  We’d love to help advice you on the smartest renovation with the best return!

As real estate agents, we sometimes get accused of trying to blandify the world. If you look at homes for sale in a given city, you may see why it can seem that way.

When you are selling a home, conventional wisdom holds you need to strip the home of elements that are personal, get rid of anything too eclectic, and try to mitigate any aspects that could possibly negatively impact a buyer’s perception of the home.

For personal elements, this typically means that sellers are advised to take down their family photos or other indicators of who actually lives in the home. You’re proud of graduating from that university? Sure, but take down that degree. Your kids had a piece of art commissioned using license plates from your home province to spell out the family name? Fun, now take it down.

On the eclectic side of things, vibrant paint colours or unusual pieces of furniture are often recommended to be changed up for a sale. Paint that lime green living room to a more neutral colour and let’s put that tiger striped sofa with the actual tiger head in storage so it doesn’t get..uh…damaged.

When we talk about potential negative perceptions in the eyes of a buyer, we mean any evidence that some aspects of the home may not be ideal for how people actually live. If you put an IKEA cabinet in the kitchen because there isn’t enough storage otherwise, that has to go. If you have the living room beside the kitchen so you can watch the kids while you cook, let’s switch it back to being a dining room, so buyers envision the lovely dinner parties they can have at their new home.

As a result of this depersonalization, most houses end up looking pretty similar. Similar paint colours, similar artwork, similar staging furniture. The truth is that this happens for a reason, and it’s not because good design and bold styles aren’t appealing. It’s because as listing agents, we’re looking for sellers to envision themselves in the home. We don’t want it to be the seller’s home they are visiting for the first time; we want it to be your future home.
Naturally, not all homes for sale follow these rules and you can end up with properties that need some cosmetic updates, that have a very eclectic and personal style and where the way the current owners live makes it clear the home isn’t ideal for how people live these days.

On other occasions, however, you see places that are unique in quite puzzling ways. Whether they were built that way, or subsequent owners decided to do their own thing, we sometimes go to homes and end up shaking our heads in confusion.

A unique-in-a-bad-way home has aspects that make no sense to the majority of buyers and they aren’t easily fixed. Such homes take longer to sell and when they do, it’s for a lower price than for comparable properties that don’t have those issues.

Here’s three unique things in real estate we strongly recommend you avoid!

Hope you don’t fall down the stairs in the middle of the night.

Our first unique-in-a-bad-way example is a home where someone decided to renovate and remove something that pretty much everyone wants.

Here’s a story that illustrates what we mean. We were recently showing properties to a buyer who was looking at homes in the Long Branch area of Toronto. There are lots of cute, small bungalows in that part of the city and they are decent condo alternatives if you want a small home but with your own driveway and backyard. One of the properties we showed was unique, and not in a good way.

It was nicely decorated and while there was a lot of personalized art on the wall related to the seller’s last name, it showed well. It was when our buyer commented on the basement bathroom only having a curtain for a door, that we suddenly realized we hadn’t seen a bathroom on the main floor. Now, it’s not too unusual for homes in Toronto to not have a powder room or washroom on the main floor, but that’s when the second floor is where the bedrooms are located, and that’s where the bathroom is also located.

At some point in its history, the owner of this home decided to remove a full washroom from the main floor. We’ve seen countless bungalows of this style and they are never built without a washroom on the main floor. When built, the basement is unfinished and homeowners may choose to finish it and add a washroom, but this house absolutely started off with a washroom on the main floor.

Whoever decided to remove the washroom from the main floor of the house made a terrible decision. Any home where there is not a bathroom on the same floor as the bedrooms is very unappealing to the majority of buyers. Waking up in the middle of the night and having to sleepily go up or down a full set of stairs in order to use the bathroom is just not something people enjoy. It’s unique in a terrible way.

That basement is well and truly finished.

Our second unique-in-a-bad-way example is a home where the basement is overly finished. We don’t mean a marble counter in the laundry room, we mean where every part of the unfinished basement was finished, even if it makes no sense.

Here’s the story behind this example. In working with buyers looking in the Newmarket area for a new family home, we went to a property that had been on the market for a number of months. It was in a nice neighbourhood and while it had some quirks in the layout of the main floor, it was the basement that made us scratch our heads.

The basement had been finished with what appeared to be four different types of flooring materials. While some variety might be nice, these floor materials covered the gamut from laminate hardwood to carpet to stone tiles to terracotta tiles. It looked like if you went to your local Habitat for Humanity Store, went to the flooring section and said we’ll take it all.

In addition to there being a wide variety of flooring materials in place, the homeowners decided to use them everywhere. What you call a flooring material is also a wall material and a ceiling material if you are willing to put in the effort. If you have not ever seen a carpeted ceiling, have you truly lived?

As the final touch, the sellers made sure that every part of the basement was finished. The furnace needed to be tiled underneath it and the space between the furnace and the wall needed to be drywalled and covered in flooring material as well. Throughout the basement there were irregularly shaped spaces where considerable time and money had gone into finishing them. A 12 ft long by 2 ft wide room was created between the washroom and the stairs, in order to finish that space, and then done in terra cotta tiles. We’re not sure what you would use it for, but it’s ready for you when you figure it out.

This lesson applies to not just basements, but any area where spaces are created that most people won’t ever use and then finished to a high extent. The number of buyers who are looking for a home with an ornate attic or an L-shaped basement retreat is quite small and it makes that home unique in a puzzling way.

Privacy is for chumps.

Our final unique-in-a-bad-way example has to do with homes where the owner is an open book. Whether it is privacy for people living together in the home, or privacy from the outside world, we have encountered a few properties where the separation between rooms or the neighbours is not a priority.

We once visited a home for sale where the top half of the second story was devoted to a master bedroom retreat, complete with luxury bathroom. The large space was closed off by a pair of doors, but once past those doors, open concept was the rule. A freestanding soaker tub stood about 5 feet away from the bed, with a double sided gas fireplace being the only thing separating the two spaces. If you were walking over to use the toilet, you’d be able to have a conversation with the person in the tub, and you wouldn’t need to stop that conversation if you were using the facilities, as the toilet was in a nook facing the tub, with no door.

In a different home we found a conventional bathroom with a large jacuzzi tub, set in front of a large window. The window had no curtains or drapes, and the window began at the point where the tub ended and went up for about six feet. The window faced the neighbouring house, where no less than three rooms with windows were located. The neighbour’s windows were just a bit higher than this bathroom window, so anyone looking out of any of those rooms would be able to look directly down into the jacuzzi. Unless the tub produced copious amounts of steam to fog up the window, it seems like bathing with an audience was the intent!

While everyone may have different ideas around how important privacy is in a home, we’ve generally found that home owners like to be able to decide upon the level they can have and with whom. Any home where the design or layout removes that option makes it unique in a very perplexing way!

It really is remarkable the choices that some home owners make about their home. While personalizing a home and making it your own is understandable, some decisions are expensive to do, hard to correct and largely unappealing to most people. If you’re considering selling your home and want some advice on what would add value to the property as opposed to taking value away, then don’t hesitate to get in touch!

We regularly help our clients make decisions on whether renovating prior to selling a home makes sense.  In some cases, renovating and enjoying the improved home for a number of years before selling is actually the best option.

We have lots of experience with what appeals to buyers due to the  umpteen thousand different homes we’ve seen in our work with our clients.  In case you didn’t know, “umpteen” is an actual value – it falls somewhere between “a wee bit” and “a pile” in the measurement scale.

Despite this practical experience in what constitutes a worth-while renovation for an eventual sale, we’re not contractors, architects, electricians or plumbers.  As such, we rely on the expertise and skill of such professionals to undertake the work or to speak to the feasibility or cost of any renovations.  At the same time, we love to learn and we’ve found a resource from the good folks at Canada Mortgage and Housing Corporation (CMHC) that we often share with clients.

The Renovator’s Technical Guide is a way of approaching renovation projects, using the House-As-A-System approach developed by CMHC.  The House-As-A-System approach considers how all the systems in a house interact — and how a renovation to one system can affect another.

While the guide was last updated in 2007, it still remains a fundamental resource that can help you think through how a home works and what renovations make sense for you and your family.  We’ve linked to the full PDF of the document below, but let’s give you a taste of some of the topics it covers.

Exterior Renovations

General Renovations

Energy-Efficiency Renovations

If you want to talk specifically about your home and what we would recommend as work to be done that will add value for your eventual sale, then we’d be happy to come give you our opinion.  Get in touch with us to arrange a time!

One thing that doesn’t change in real estate – regardless of whether it is a seller’s market, a buyer’s market or even the rare, balanced market – is that being prepared makes everything easier.

If you’re properly prepared, there’s less stress, lower costs, and better outcomes.  This is true whether you’re buying or selling, trying to find a place to rent, or as a landlord renting out a place.  The better prepared you are, the better the results.

While being prepared is useful in all sorts of real estate transactions, it is when you’re listing a property for sale that it becomes absolutely crucial.  We’ve come up with the three key stages in preparing a home for sale and by following them, you get the most amount of money, in the least amount of time, with as little stress as possible.

You ready?  Of course you are!

STAGE ONE – If it’s broke, fix it.

Throughout your time living in a home, stuff breaks.

Sometimes it is just at the end of its useful life and through normal usage, it breaks down.  Sometimes, you have kids, friends or family members who don’t treat the home like the delicate flower it is!

Whether it is an outdoor light that stopped working (and replacing the light bulb didn’t fix it), or a kitchen faucet that is getting looser and looser each time you wash dishes, there will be things in a house that need fixing.

While you may have been able to live with it during your time in the home, anything that is actually broken needs to be fixed when you’re selling the home.  There is a tendency amongst home owners who are about to become home sellers to run out of steam at a certain point and try to pass the repairs on to the buyers.

We definitely understand this desire to pass the buck.  There is so much going on when preparing for a sale that everyone reaches a point where they say “Look, it’s not that big a deal, the buyers can just get it fixed.”

The challenge with that is that when we are selling a home, uncertainty is the enemy.  A home owner may have a very good idea of what is wrong and what it will require to get it fixed, but just not have the energy or time to make it happen.  A home buyer who doesn’t have the same knowledge can turn a minor repair into a major issue, with questions about who can do it, how much it will cost and how big a disruption it will be to them.

If this happens enough times when considering a property, a prospective buyer can decide that the property is a fixer-upper ,that is more work than they can handle.

Whenever possible, fix broken items in the home.  It’s worth it.

STAGE TWO – Tone it down, clean it up.

We’ve all heard the expression beauty is in the eye of the beholder.

This second stage involves understanding that when selling your home, you are aiming to appeal to as many people as possible.  Call it the lowest common denominator or builder bland, but the goal is to have a home that has only a few unique, style flourishes.

It’s often a challenge for home sellers to understand that your taste is not everyone’s taste.  We’ve been in many homes where the seller likes a particular colour and has painted and decorated accordingly.  After all, it’s their home and they should have it look the way they want.

However, when we want it to become someone else’s home, we need to tone it down.  This doesn’t mean everything has to be off white and beige, but it does mean that the 2^nd bedroom that the family calls the Purple Palace might need a coat of paint and some different linen.

The stronger the feel and character of a home, the fewer people it will resonate with, which means less interest (and therefore competition) for your home.  Finding a buyer who has the identical taste as the seller is very hard to do and whatever can be done to make the home broadly appealing, should be done.

At the same time as we tone down the unique aspects of the home, we need to declutter and clean up the home.  Life often gets in the way of how we’d like to live but an effort needs to be made to show the potential buyer how beautiful living in this home could be!  Buyers are often aspirational, looking for more space, a nicer neighbourhood, a better life.  When a home is clean, with everything in its place, buyers look around and say, “I want to live like this!” and decide to make an offer.

In whatever ways you can, make your home appealing to the majority of buyers.  It’s worth it.

STAGE THREE – Avoid rush hour.

The final stage in preparing a home for sale involves planning in advance to leave enough time to show at its absolute best, right out of the gate.

• Whenever you see a listing with bad photos or a “Photos Coming Soon!” placard online, the listing Realtor has failed their client.
• When there is no marketing material at the home or information about the property available, the listing Realtor has failed their client.
• When the home is dirty or cluttered, the listing Realtor has failed their client.

With only one chance to make a great first impression, leaving enough time to create that impression is the crucial final stage in preparing a home for sale.

Cleaners need to be organized, stagers need to move in any staging, photographers need to be booked, marketing material needs to be created and printed – all of it takes time.

Unless there is an extremely time sensitive reason to rush a listing, sellers are well advised to make sure that the home is presented at it’s best from day one of the listing.

Whenever possible, give yourself enough time to do things right.  It’s worth it.

Let’s recap the three stages and how your real estate agent can (and should) help with each.

If it’s broke fix it.  Whether it is co-ordinating tradespeople or contractors, sourcing multiple quotes or arranging deliveries, fixing the visible problems in a home requires some work.  We work with our clients to support them in this stage, to get things done.

Tone it down, clean it up.  As real estate professionals, we see dozens of homes each week and have a good perspective on what is causing homes to sell and what is causing them to sit.  We can advise on changes to be made and we can also arrange cleaners as well as decorators and stagers to come in to consult with the seller.

Avoid rush hour.  For every one of our listings, we create a calendar where we work backwards from a listing date to make sure that everything that needs to be done, from repairs, to styling a home, and through to getting marketing materials ready, can be done in the time we have.  We avoid stress and achieve the best first impression by planning ahead.

While selling a home is hard work, we work with our clients to make sure that when they pass the torch and say, “Get it sold!” they have had a partner and support in getting the home to that point.

If you considering selling your home and you want a partner to help with the process, don’t hesitate to get in touch.  We promise we’re prepared for that conversation.

In real estate, you sometimes have a house for sale where the house is actually of no value.  Such listings may technically have a house on the property and may even include some limited information on the house like number of bedrooms and bathrooms, but the value isn’t in the house and the land, it’s just in the land.

When you have a property with a house that is not habitable, the valuation process is focused on different aspects than a property with a liveable home.  You don’t need to think about how an extra bathroom in one property affects the value of a comparable with one fewer bathroom and so forth.  The focus becomes the characteristics of the lot and aspects that might be of limited impact in a typical listing become quite important.  In some cases, a positive attribute for a property with a good house might actually be a negative for a building lot.

Given that the value of a building lot is quite different than the value of the same lot with a viable house on it, we often work with clients who want to know what the lot itself is worth.  While each property has its own set of characteristics and attributes that impact the value, let’s review some of the factors that impact building lot value.

Zoned out.

We’ve written before about how a change in zoning can dramatically increase the value of a property, but the current zoning in likely to remain the same for most building lots in an urban area.  As such, it’s important to look at the zoning for a property to determine if your planned use is in fact permitted on the lot.

While the desired use is often an individual specific choice, the current zoning of a property can dramatically impact the value of the building lot.  Some sellers make assumptions that their property is worth the same as another building lot nearby without looking into the zoning.  Consider a property that is on the edge of a mixed use (commercial and residential) zoning area.  If they use a residential only zoned property nearby, they may be undervaluing the property, as the highest and best use might be a commercial building that could be built upon the lot.

If you’re interested in reading about how we look up zoning and interpret it, we wrote an article about that and you can find it here.

Sometimes being exceptional is bad.

The literal definition of exceptional is “unusual; not typical” but most people use it in the positive sense of “unusually good; outstanding”.

In real estate and real estate zoning, there are often exceptions to the zoning of a specific property.  They are often due to historical planning decisions and offer an interesting glimpse into how the municipality thought about what was desirable on that property in past years.

If you’re reviewing the zoning and there is an exception for the property, it can have a negative impact on the property if it limits what is permitted on that specific plot of land.  We’ve seen streets where three houses have exceptions due to environmental aspects that severely limit what can be done on the property.  You couldn’t tell a difference between those three properties and the dozens of others on the street, but anyone who bought one thinking they could do the same infill development as elsewhere on the street would be sadly mistaken.

Size matters.  Well, maximum floor space index and buildable site area matter.

Every property has restrictions on how big a home can be built on it.  These restrictions have a tremendous impact on the value of a building lot, as by dictating the size of the home, they dictate the possible sale price of any development on the lot.

On any street where you see a number of new build properties, it is likely that the builder built a home that was the maximum size that was permitted for that specific lot.  Older homes on the street are likely smaller, with more space between themselves and their neighbour, but a new build will be as close to the lot line as minimum setbacks allow, and they will be as big as possible.  Buyers often consider square footage as a proxy for value and an extra bedroom or washroom can have a big impact on the eventual sale price.

Just regular folk.

While there are some unique houses that use unusual angles and curves to create an attractive home, most houses tend to be based on squares and rectangles.  This tends to be the most efficient design to optimize useable space and it requires a lot that is regularly shaped.  A 25 x 100 foot lot offers a straight forward way to build a house with maximized layout and space.

We’ve shown properties where they were wedge-shaped, with a house that ended up resembling a wedge of cheese.  In practice, this resulted in strange layouts, such as a kitchen that starts out at 14 feet wide but drops to 7 feet by the time we reached the back door.

Unusual and irregular lot dimensions mean that much of what needs to be done is custom and buyers often need to adjust how they live (and the furniture they live with!) in the property.  While such unusual lots can be very interesting from a design perspective, they typically are less valuable than a standard, regular shaped building lot.

Opposites attract!  Or do they repel?

One of the curious aspects of a building lot is that sometimes what makes it less valuable is what makes a lot with a liveable home valuable.  The prime example of this is mature trees on a lot.  On a property where the house in place is remaining, the presence of a mature tree on the lot is very desirable.

In contrast, when someone is looking at a lot with the intent of tearing down the existing house, a mature tree can make building a larger home impossible.  It can be quite difficult to get permission to tear down a mature tree and depending on the location of the tree(s) on the lot, it can make it difficult to have a larger footprint that results in a higher sale price.

Less park, more parking.

A final aspect that can impact the value of a building lot is the parking situation.  A lot that already has the curb cutaway for parking has more value than a home where the builder would need to apply for permission for parking from the municipality.

Such permissions are never guaranteed to be granted and it can be an expensive and time consuming process to get neighbour agreement to remove street parking due to the addition of a driveway on the lot.  If a builder goes to the effort of getting legal parking on the lot, it definitely adds value to the property, but the seller must expect to get a bit less.

These are the main factors that influence the value of a property where the house on it is not worth keeping.  Building lots do exist in many parts of the GTA and it can be a rewarding and satisfying way to get the home you want, in the neighbourhood you love.  If you’re considering such an option, we’d love to help you move forward.