Renovating for Resale
When it comes to home renovations, one plus one does not necessarily equal two. The money invested in improving your home will not always translate into an equivalent return in the selling price of your home. However, with planning it is possible to both increase the salability of your home and even profit from your home renovations.
Renovations do not have to be extensive or expensive to earn a high rate of return. In fact, one of the cheapest and simplest improvements yields one of the highest paybacks. According to a study (1999 Renovations and Home Value Survey) by the Appraisal Institute of Canada (AIC), a fresh coat of paint on interior walls returns an average 73 percent payback. So, a $1,500 paint job could be expected to increase a home’s selling price by $2,625 (a $1,125 profit).
To maximize salability ensure that your new décor is modern and tasteful. Choose shades of white and tame versions of popular colours. Steer away from too many personal touches and custom work if you plan to re-sell. It is unlikely that your investment will be recouped and it may prevent the quick sale of your home. Also, try to keep renovations in harmony with the fashion of your neighbourhood.
The kitchen and bathroom are key areas to focus your renovation attentions. New fixtures, cabinets and tiles could be well worth the money and/or time and effort. The AIC’s study highlighted the top ten renovations and the average rate of return:
- Interior painting and décor – 73%
- Kitchen renovation – 92-102%
- Bathroom renovation – 77%
- Exterior paint – 65%
- Flooring upgrades – 62%
- Window/door replacement – 68-74%
- Main floor family room addition – 86%
- Fireplace addition – 75%
- Basement renovation – 40%
- Furnace/heating system replacement – 100%
- Install or upgrade landscaping – 30-60%