Now that the Home Renovation Tax Credit has reached it's deadline, you may find yourself overwhelmed with piles of impulsively bought home improvement materials. So you've got the product, but where do you start? What areas in your home need the most improvement and will those upgrades also improve the value of your home? If you need help figuring out what home improvement projects will serve you best, here's a bit of information that you may find helpful.
There are countless studies that assess your return on investment, or ROI, and promise you'll receive a certain percentage back when it comes time to sell your home. But when you look a little closer and start comparing studies, you'll notice the information is often contradictory. The truth is, if there's one essential rule of thumb when it comes to assessing the ROI on a potential renovation project, it's this: know thy neighbourhood.
The simplest and most important areas to start with are de-cluttering, cleaning every surface (including your windows) and painting. These are the best things people can do to put money in their pocket.
When it comes to spending serious money, take into account that old real estate adage: location, location, location. In other words, what increases value or appeal in one city, neighbourhood or even specific street, may not do the same elsewhere; the high-end features that might boost the value of a home in Toronto's Tony Rosedale area might well be a lost investment in Oshawa.
The one thing to keep in mind across the board is that most renovations don't deliver a dollar-for-dollar return on investment.
Average return on investment
The Appraisal Institute of Canada publishes a list of the most popular renovations and their average return on investment. The list is meant to be a guide only; the institute's disclaimer emphasizes that location, quality of workmanship and materials can greatly influence home values.
Renovation Return on Investment
Painting and interior decorating 73%
Kitchen renovations 72%
Bathroom renovations 68%
Exterior painting 65%
Flooring upgrades 62%
Window/door replacement 57%
Family room addition 51%
Fireplace addition 50%
Basement renovation 49%
Furnace/heating upgrades 48%
Bang for your buck
Kitchen: Every home improvement should strike a balance between a smart investment decision and improving your quality of life. The room that best delivers that win-win situation is the kitchen. Long heralded as the heart of the home, a kitchen isn't just a place to cook or eat -- it's a gathering spot for family and friends, so a smart layout and general appeal are important. Granite countertops, a cooktop stove, high-end appliances and even wine coolers are the "it" items these days, but remember that styles change, so consider finishes that will have lasting appeal.
Bathroom: Updated tiles and fixtures are inexpensive ways to add interest to one of the home's most high-traffic areas. But if it's a major renovation, consider Jacuzzi-style tubs and walk-in showers. In addition, homeowners want a bathroom on the main floor, so investing in a stylish two-piece is a smart choice.
Flooring: Sometimes it's not so much about ROI, but the penalty you might face if you don't make in the investment, for example, worn carpeting can give the impression that a whole house is tired, prompting people to offer $5,000 or $10,000 below asking, when all that's really required is $2,000 in new carpeting or, better yet, hardwood flooring. Hard surfaces are all the rage, and neutral wood colours accommodate all tastes.
Windows: You don't want to neglect major maintenance, such as roof, windows and furnace, if you have to pick between them go for the windows because they're something people notice right away. They're also a great long-term investment because new windows can help reduce energy costs.
Curb appeal: You never get a second chance to make a first impression. In Remodeling Magazine's annual and highly respected "Cost vs. Value" Report, outdoor endeavours, such as replacing siding and building a fence or deck, delivered the top ROI.
Home improvement missteps
At the other end of the spectrum are swimming pools. These, along with greenhouses, tend to flounder at the bottom of the ROI lists.
However, when it comes to home improvement missteps, experts agree it's not so much what you do, but how you do it. Opt for classic rather than trendy designs and materials when it comes to things such as tiles, floors and cabinetry.
Don't completely tailor your home to you, people who turn a three-bedroom home into a huge one-bedroom master suite with a tiny office will automatically excludes families from the potential Buyers' list at resale time.
Another common mistake is over-renovating a house. You need to think about who your target Buyers are, you don't want to be the most expensive house in your neighbourhood.
Of course, renovations aren't just about resale, if you are staying in the house for 5 to 10 years, do whatever you think makes your day-to-day life more enjoyable.
I hope this information helps you to perfect your home improvement plans, but if you're still feeling unsure, always remember a fresh coat of paint is at the top of the ROI list. And if you're thinking of listing your house and don't know where to start to make your house market ready give the Dianna Mandzuk Team a call 905-433-2579. We would be happy to have a look and give you some tips. As a Real Estate agent with 24 years experience and as a certified Canadian Staging Professional I have the knowledge and practiced eye needed to help you to make sure your home is stunning when it hits the market and make sure that you get the best return on your investment!
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