There’s something undeniably appealing about purchasing a freshly renovated home, and in a competitive or uncertain market, that appeal is even stronger. Given the cost and thought that go into a home purchase, the prospect of a home with new kitchens, bathrooms, flooring, and modern finishes, without the need for further work or expense, is particularly attractive. For many buyers, a turnkey home is exactly what they’re looking for, particularly those without the experience, time, or appetite to take on a renovation.
But is that the right choice? Particularly if the renovation was completed by an investor whose primary intention was to resell the home for a profit?
With the popularity of real estate shows and Toronto’s obsession with real estate, the concept of house flipping is familiar to most. Purchasing a property, renovating it, and quickly reselling it is common in Toronto, particularly when the market is hot. There’s nothing inherently wrong with buying a flipped home, but there are a few considerations every buyer should be aware of.
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Not All Flips Are Created Equal
A well-executed flip can be an excellent purchase. An experienced renovator can turn a dated and neglected home into one that is modern, aesthetically pleasing, and functional. Their experience can give them access to contractors, materials, and expertise that allow them to renovate more efficiently than the average homeowner, potentially producing a superior finished product.
The reality, though, is that not every renovation is completed with the same level of quality and care. Someone renovating a home they intend to live in for the foreseeable future has an incentive to prioritize quality and longevity. Someone looking to immediately resell may have different priorities. That isn’t to say all flipped homes are inferior, but it’s critical for buyers to look beyond the impressive aesthetics and consider the workmanship and thought that went into the renovation.
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Are the Changes in the Home Worth the Purchase Price?
The first thing to investigate is the property’s history. A capable real estate agent can identify when the property last sold, for how much, and how long the renovation took. Conversations with the listing agent can also help establish the seller’s motivations and experience. Understanding what’s changed since the previous sale, and what work was actually completed, can help determine whether the increase in value is justified.
The biggest clues to a poor flip can often be found in the details. Take time to understand the quality of the materials and look closely at how they’ve been installed. I can recount many occasions where I’ve seen uneven flooring, sloppy tile work, poorly installed cabinetry and fixtures, or inconsistent finishes throughout a house. These can be telltale signs that corners were cut.
Don’t be afraid to touch and examine the materials.
- Are the bedroom doors hollow?
- What about the quality of the light fixtures, appliances, and countertops?
- Are the finishes simply following the latest trends and designed to photograph well, or was time taken to select quality materials and install them thoughtfully?
Equally important is the floor plan and functionality of the home. Too often I see an impressive renovation where the layout simply doesn’t make sense.
- Are the rooms appropriately sized?
- Do doors open where they should?
- Is the available space being used effectively?
Here at TRG, we’re proud to help our clients find the best deal when buying a home. See how we do it and hear from a real client by reading: How Toronto Realty Group Gets Deals for Our Buyers.
Pay Attention to the Critical Details
Flippers often start from scratch, removing walls and reconfiguring the layout. Sometimes this works beautifully, but other times they’re simply trying to check boxes.
Adding an extra bedroom, a main-floor powder room, or squeezing a family room alongside the living, dining, and kitchen areas might sound great on paper, but if these additions compromise the functionality of the space, are they actually improvements? I’d much rather see a sensible, functional layout with a few compromises than a home that tries to have everything and does none of it particularly well.
It’s also important to establish whether the work behind the walls was completed appropriately. A beautiful new kitchen doesn’t necessarily mean the electrical, plumbing, or HVAC systems have been updated. That new hot tub or EV charger might look appealing, but can the existing electrical system support it? When significant renovations have been completed, buyers should investigate what work was done, whether permits were required and obtained, and whether the appropriate inspections took place.
Looking for more insightful home buying advice? Read these posts next:
- Why Properties that Look Amazing on MLS Haven’t Sold
- Should I Buy a House That’s Been on the Market for a Long Time?
- The Complete Guide To Buying An Older Home In Toronto
Proper Due Diligence Leads to Peace of Mind
This peace of mind can be supplemented by a professional home inspection. I’d argue an inspection is important for virtually every home purchase, but it’s particularly valuable with a flip. A qualified inspector can identify issues that might otherwise go unnoticed and provide insight into the quality of the workmanship, though even the best inspection can’t uncover everything concealed behind finished walls.
If you approach a flipped home with these considerations in mind, you’ll be in a much better position to understand what you’re buying. And if you uncover a problem, that doesn’t necessarily mean the property isn’t right for you. Not every deficiency is a dealbreaker. Cosmetic issues can be relatively inexpensive and simple to repair, and even more significant problems can be manageable if they’re properly understood and reflected in the purchase price.
What’s crucial is understanding the potential cost and time required to address any issues, and determining whether the property’s value still makes sense. In some cases, consulting a contractor or specialist may provide the necessary peace of mind. In others, the uncertainty and potential risk may simply be too great, and it’s better to know that before committing to a purchase.
Proceed With Caution and an Open Mind
Ultimately, assessing a flipped home isn’t fundamentally different from any other purchase. You consider its condition, quality, location, and value, and determine whether that combination meets your goals. There’s nothing wrong with paying a premium for a beautifully renovated home, particularly when it saves you the time and stress of completing the work yourself. What’s important is making sure you’re paying for quality renovations rather than just attractive finishes.
Working with a capable agent can greatly simplify this process by helping you understand a property’s history, identifying potential warning signs, and recommending appropriate specialists where necessary. The goal shouldn’t simply be to purchase a home that looks good on Instagram, but one that you’ll be happy living in for years to come.
If that’s something you’re looking for, please reach out. We’re always happy to discuss your options and help you make the right decision. Get in touch by filling out the form on this page, or by calling us or emailing us directly.
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