Renovation Payback - Does Renovating Pay?
May 22, 2017 | Posted by: Paul Williams
These days you can’t surf the TV without seeing a program about home renovations; we’re the renovation generation! It’s enticing to believe that you could be one of those ordinary homeowners who transforms their living space into a decorator’s dream – whether to enjoy with friends and family, or to boost the home’s value before selling.
Before you start shelling out money, think about the reasons why you want to renovate. Do you want to increase the comfort and enjoyment of your home because you’re planning to be there for the foreseeable future? Do you want to spruce up your old kitchen to avoid lowball offers when you sell your house later this year?Or maybe a little of both? If you're planning to sell, your priorities will likely be different than if you're planning to stay for a few years. It can be difficult to recoup the full cost of renovations so you may want to focus on those that have the highest payback potential.
The Appraisal Institute of Canada’s RENOVA websiteis an interactive guide to help you determine the payback value of home improvements. For the next five weeks, we’ll share the top renovations that payoff for Canadian homeowners according to RENOVA!
Five renos that pay off: Energy upgrades are #5
Upgrades to improve your home’s energy consumption - new windows and doors, or furnace and heating system improvements -can give you immediate savings on your energy bil land help reduce the strain on our planet.These renovations are also on the list of top renovations that pay –returning 50% to 75% of the money invested according to the Appraisal Institute of Canada.
Often the primary payoff comes in reduced energy bills. So if you’re staying in the home for several years, you’ll get a nice return on your investment. Not to mention that new doors and windows can transform the look of your home, greatly boost its curb appeal, and impress homebuyers. Be sure to stick to standard styles; expensive customizations do little for resale value.
When it comes to heating system upgrades – if you can’t see it – it’s harder for a buyer to be impressed by your renovation so focus on the energy savings when considering this upgrade. Be sure to have your heating specialist give you a realistic assessment of the projected energy savings,and make these savings part of your financial calculation!
If you’re thinking green at your house, be sure to check out the list of provincial and municipal incentives that might apply to your project.
Five renos that pay off: Basement reno is #4
Basement renovations are on the “most wanted” list of home improvements for many families as they look to expand quality living space in their homes. An unfinished basement is just an opportunity waiting to be exploited and a great way to increase the square footage of your home!
Keep in mind that these can be expensive renovations, but expect your improvements to return from 50% to 75% of the money you invest according to the Appraisal Institute of Canada. Doing high-quality work yourself, of course, can boost your return – but poor-quality work can cost you if buyers see a project that has to be redone.
In general, a basement renovation that involves finishing or refinishing ceilings and walls – and installing attractive and durable flooring – will show buyers the living potential of the space. As ever, if you’re planning to sell your home in the near future, it’s a good idea to consider that the next owner may not share your decorating tastes. Painting your basement in your favourite shade of purple is unlikely to be as attractive to a buyer as it is to you!
If your basement is unfinished, or if it is very dated or in shabby condition, then you should expect a nice return on your renovation investment!
Painting is the #3 Reno for ROI
Whether it’s inside or outside – and whether you’re staying or going – a fresh coat of paint can work wonders on the overall impression of your home.
While it doesn’t have the power-tool appeal of knocking down walls, a simple coat of paint can be almost as impactful. In fact, the experts consistently agree that painting pays: money spent on a great paint job is almost always money well spent. In the grand scheme of renovations, painting is a low-cost activity, so you can expect a return of 50-100% of the amount you invest in the project – and a careful DIY job should put you on the high end of that scale! If you’ve got your eye on selling your home soon, this isn’t the time to express your colour creativity. Light and mid-range neutrals tend to appeal to the widest range of prospective homebuyers.
Another tip? Even if you’re selling your home soon, it’s worth using good quality paint – rather than the cheapest gallon you can find to cover the space. Whether it’s your own time and energy or a hired professional, you need to make sure that the work looks highly professional in order to maximize your return.
Bathrooms Are Reno #2
Although it is certainly possible to over-invest in bathroom renovations, they are among the most reliable renovations in terms of boosting the overall value of your home. If your home has fewer bathrooms than others in the neighbourhood, then a bathroom addition should be a top priority. A smart bathroom reno should return 75% to 100% according to the Appraisal Institute of Canada.
Always consider, of course, that your renovations should be in keeping with the rest of your home–and that your home should be compatible with your neighbourhood. A glamorous spa bathroom, for example, might be entirely out of place in the overall style of your home – and also not something a new buyer is likely to pay for when buying a home in your neighbourhood.
Popular mid-range renovations couldi nclude installing modern, matching showerheads and faucets, an attractive new sink and a fresh coat of paint. Sleek new baths and showers can also provide excellent returns – although renovations that require drastic plumbing changes could dramatically decrease the odds of a good return on your bathroom reno investment.
Bathroom renovations can be very disruptive, which is why so many buyers appreciate moving into a new home with upgraded bathrooms.
Kitchens are the #1 reno investment
The kitchen is almost always the heart of the home, and the most important room for homebuyers. So it’s no surprise that kitchen renovations consistently provide the best return on your renovation investment: from 75% to 100% according to the Appraisal Institute of Canada.
While kitchen renovations can also be extremely costly, there’s no need to gut the kitchen and start over to see a boost in value. Upgrades like granite countertops to replace tired laminate – or stainless steel appliances, new light fixtures and fresh paint – are mid-range investments that can dramatically boost the value of your home, while making it a more pleasant and attractive room for you and your family.
Desperate to replace your dated kitchen cabinets? Consider a partial facelift with a fresh coat of paint and updated hardware. Or get a quote on replacing the cabinet doors and drawer fronts – for a brand-new kitchen look at a fraction of the price.
When planning a kitchen renovation, remember to keep the project in line with the style and quality of the rest of the house and neighbourhood. Kitchen renovations are among the most disruptive undertakings, so buyers especially appreciate upgraded fixtures, appliances and décor.
What Reno Will You Undertake Next?