Pro Tips: To Reno, Or Not To Reno

Contrary to what some HGTV shows would have you believe, you don’t always increase the the value of your house proportionately to how much you spend renovating. Put in a $60,000 kitchen? Sorry, but your house didn’t just go up by $60,000. In fact, most renovations won’t give you the ROI or payback that you probably expect.

There is no exact science when it comes to determining renovation value...but there are general trends and statistics that provide a baseline to work from. According to the Appraisal Institute of Canada, most home owners can expect the following recovery rates on their renovations:

Kitchen Renovation - 75% to 100%

Bathroom Upgrade - 75% to 100%

Interior Painting - 50% to 100%

Roof Replacement: 50% to 80%

New Furnace: 50% to 80%

New Deck: 50% to 75%

Doors and Windows: 50% to 75%

Garage Construction: 50% to 75%

Installation of Hardwood Floors: 50% to 75%

Finished basement: 50% to 75%

As you can see from above, a home reno doesn’t usually net you 100% of what you put into it. Some renovations aren’t worth your investment. On the flip side, there are renovations that WILL help you sell your home even if you don’t recoup the full value of the reno. Here are some tips:

Kitchen

This is the heart of a home, where the most work takes place. The quality of the worksmanship, the style, and how the style works with the other rooms in the home are the main factors that will determine the best value.

Decor

Modern styles don’t appeal to everyone. Boho inspired updates don’t appeal to everyone. What does? Cleanliness. As long as your room refresh provides and shows off the room’s space, you can appeal to any buyer.

Paint

Fresh, neutral tones are the best colours to use. This goes hand in hand with general style, since neutral tones help to place the focus on the room and its space. Loud colours keep the eyes focused on the walls.

Shingles

If a home has poor shingles, a buyer may not even go inside. Potential leaks are a huge red flag that nobody wants to deal with.

General Maintainance & Curb Appeal

Fixing the little things in your home like loose door handles or cracked light switch covers all portray pride in ownership. Exterior: Update lighting, lawn maintenance/edging, leaves raked, trees pruned, weeds pulled, gutters cleaned, windows washed, siding pressurewashed (no cobwebs), trim painted, and add in some colourful planters or a nice door matt to welcome buyers.

Removing Walls

Certain projects can help or hinder in this area. For example, removing the wall separating two bedrooms to make one large bedroom is not a good idea. You’ve lost value, even though you increased space. Knocking out a main floor wall to create an open concept kitchen/living room/ dining room is a good idea. You gain value from this increased space since they weren’t private spaces to begin with.

Windows

Unless seals are broken just leave them. Instead, be sure that the glass and sills/trim are clean and maintained.

Please note: If you put $200k into your $500k house, and the houses on your street sell for $550k, you will have a hard time selling your house for the price you want. Every house on every street has a maximum price, no matter what’s happening inside.

If your renovation goal is for your own enjoyment, then go for it... but recognize that buyers may not see any value in the $20,000 sound system you installed, or the $5,000 hot tub on the deck.