Smart Renovations: Improvements that Pay
Selling your home is an involved process that affects your family and your future. Before you begin this process, you'll want to ensure that you have the most up-to-date information. When should you sell? How do you get the best price? What kinds of renovations should be made prior to the sale?
1. The kitchen
Kitchen renos usually offer the best return of any major improvement. Just make sure you’re keeping your update in line with the rest of the house and with other homes in the neighborhood. If you put a $60,000 kitchen into a $200,000 house, you don’t have much of a chance of recouping your costs.
Don’t have major bucks to sink into your kitchen? Sometimes a small facelift like new hardware, freshly painted cabinets or new appliances can make a big difference – to both your resale value and your own appreciation of the space.
2. The bathroom
Buyers like bathrooms that are up-to-date and stylish. Despite being one of the most expensive renos you can undertake (second only to kitchens) updating an existing bathroom or adding a new one can really boost the value of your home. If your home only has one bathroom, adding a second one is always a good idea. Or, if you live in a neighborhood where everyone else has three bathrooms and you only have two, keeping up with the Joneses can keep your property values up, too.
3. The basement
Finishing your basement (or your attic or any other unfinished area) can increase the value of your home tremendously. Adding living space almost always pays for itself. Plus, it’s more cost-effective than building an addition.
A well-constructed addition usually offers a good return at resale. Improvements that increase functional space (rather than just making your home look better) hold their value longer. Just be careful not to add on so much that there’s no space left on the outside; a yard that’s too small may not appeal to buyers.
5. Hardwood floors
Wood floors are elegant, durable and easy to keep clean. Stick with light or medium wood; dark wood looks formal and isn’t to everyone’s taste. It’s a pricey update, but you can usually recoup a good portion of what you pay for new floors – as long as your buyer doesn’t prefer wall-to-wall.
6. New paint (interior and exterior)
Painting your home is inexpensive, easy, and is one of the few investments you can make that will likely see a significant profit. Stay away from intense or unusual colors that won’t appeal to most buyers – tasteful, current neutrals are best. If you’re painting the outside, keep colors in line with other homes on your street.
7. New deck
An attractive, well-designed deck is a cost-efficient way to add usable square footage to your home, and offers excellent payback.
8. General improvements
These may seem boring, but overall, fixing the small stuff may increase the value of your home the most. Before you spend money putting in a Jacuzzi tub, first see if any structural or mechanical fixes take priority (like roof repairs, fixing a leaky basement, repairing doors that stick, dripping faucets, etc.) The Jacuzzi isn’t going to impress anyone if the toilet doesn’t work.
Improvements that DON’T pay
There are some fixes that simply don’t provide a good return on your investment.
An in-ground swimming pool
Since many buyers don’t want the maintenance and responsibility that goes with having a pool, installing one can actually detract from the value of your home.
If it looks like it will require a lot of work and money to keep up, it generally won’t appeal to buyers, no matter how nice it looks.
Replacing heating or A/C
You may make half of your money back at resale.
Replacing windows and doors
If they’re old and drafty, you’ll need to replace them, but it’s an expensive repair that you won’t likely see reflected in your sale price.
Whatever improvements you decide to make to your home, don’t cut corners to save money. A poorly done reno will detract from the value of your home, especially if buyers decide they need to redo it.
Want to see exactly what return you can get on your investment?
The Appraisal Institute of Canada (http://www.aicanada.ca/cmsPage.aspx?id=70) has a handy tool that lets you input how much you’re planning to spend on an improvement, then calculates your return.
Callout: “If you’re renoing your house with an eye to upping resale value, focus your dollars on projects that will give you the best return.”