What’s the Pay Back on That Reno?

Posted: June 12, 2012 in General Information, Home Reno's & Decor, Sellers
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To some the pounding of hammers, buzzing of saws, smell of woodchips, dust of dry walls are all staples of Canadian summer renovations. With real estate prices in a state of flux, the eager beavers have begun the stampede into Home Depot, Rona and Canadian Tire to pick up the necessaries for the upcoming home renovations in hope of increasing the property value. As you all know not all renovations are created equal and before you sink your hard-earned cash into a job worthy of Tim the toolman Taylor you should consider the revenue in renovations.
There is a neat online tool, compliments of the Appraisal Institute of Canada, to help you determine what you can expect back in revenue on the sale of  your home for each type of renovations. (The AIC is a self-regulating professional association and the largest property valuation organization in Canada, with 4,800 members in Canada and around the world.) All you have to do is choose a reno, enter the expected cost, and the system will tell you what you should expect the reno to bring back. A $2000 bathroom reno is likely to get 75 to 100 percent of that investment back.
These are general guidelines, not set in stone fast rules as what you spend will affect what you get back. Ceramic, hardwood and granite will cost more than laminate and linoleum for instance and will certainly up the value. On the same token spending $80,000 on a spa bathroom worthy of the grandest hotel,  in a  house that’s barely worth the double of that will likely never payback the investment. Choosing a renovation should certainly be more than just a return on investment after all it’s your castle and should bring  you enjoyment. But if you’re contemplating one job over another and you have plans to sell in the near future you might want to experience prudence and go for the finished basement rather than the interlocking driveway.

The blue ribbon winners in the home  upgrades are by far given to the kitchens and the bathrooms. Don’t sneer at a good coat of neutral paint as this is the close runner-up in return on investment along with basements, windows/doors replacement, rec room addition, furnace and heating systems and exterior siding.

The lowest returns come from paving, landscaping, fences, interlocking driveway and even home theatres which all return about 25-50%. The least revenue comes from skylights, swimming pools and whirlpools.

So, before you start the reno, call me and I can give you a good idea about where you should be spending to bring the highest value to  your home.

 

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