Which Home Renovations Bring the Highest ROI
We are often asked which home renovations add the most value and will bring you the biggest return on your investment. While each real estate market is different, when you are prioritizing home renovations for the Greater Victoria market, there are certain updates and renovations that will bring you a better return when you sell your home in Victoria, Oak Bay, Saanich or Sidney.
According to the 2019 CIBC Home Renovations Poll, 49% of Canadians plan to renovate their homes in the next year. Among those who completed recent renovations, 39% went over budget – which is another reason why planning and prioritizing renovations is so important.
Whether you are looking to create more space for a growing family, wanting to update a kitchen or bathroom, or build your dream master suite – knowing which renovation or remodel projects will give you the best return on your investment is important if you are going to spend your home improvement budget wisely.
According to The Appraisal Institute of Canada (AIC), homeowners should consider the following five renovations that offer the best return on investment (ROI) in the long run:
Upgrades such as quartz, granite or marble countertops, stainless steel appliances, new fixtures, lighting or other minor aesthetic modifications can make a large difference. According to AIC’s calculations, kitchen refurbishments typically pay back about 75% to 100% of their cost, making them the most valuable home renovation investment.
Even without replacing a shower or tub entirely, small changes like a contemporary showerhead, faucets, and other minor renovations really make a difference in the long run. Similar to kitchen renos, bathroom renovations typically provide a 75% to 100% return on investment.
Replacing aging tile, carpet or laminate with beautiful hardwood floor can give your home a newly polished feel. AIC confirms that you can expect a payback of approximately 50% to 75% when you replace old or outdated flooring.
The layout, design and size of a closet are all variable costs that make it difficult to determine an exact return – nonetheless, potential buyers consider closet space when touring a home. A well-designed, organized closet with ample storage space and other unique features is a great selling point and can allow you to recoup 50% to 75% of the cost when you go to sell.
6. Energy upgrades
Whether you’re considering new energy-efficient windows, a new furnace, or hydro improvements, sustainable energy upgrades are a hot trend in home building and renovations. Generally, energy upgrades warrant between 50% to 75% return upon resale; this is in addition to any cost savings you realize from reduced utility bills while living in the home.
Renovations to the exterior of a home can also add value and go a long way to improve your home’s curb appeal, especially on Vancouver Island and in Victoria , which is known for its temperate climate and long patio season.
1. Garage door replacement
A new and improved garage door not only improves the value and aesthetic appeal of your home, but greatly improves a home’s functionality and safety.
2. Deck addition
Increasing a home’s usable living space will always increase its overall market value. A new and improved patio or deck creates a strong connection to the outdoors which is a significant feature for most home buyers
3. Deferred Exterior Maintenance projects
Door and window frames that need a fresh coat of paint, an aging roof, or dangling eavestroughs can send a signal to potential buyers that a home has not been maintained. By dealing with these projects you can mitigate the chance of water damage and they will go a long way to improve the overall aesthetic of your home.
Calculating the ROI on landscaping can be difficult as professional landscaping costs can be expensive and potential buyers often underestimate the value. However, landscaping the front of a house can up the curb appeal of a home significantly – making your home rise above the competition. One needs to be cautious with investing too heavily in landscaping if the plan is to re-sell the property, as some buyers will shy away from a home with extensive gardens as they will be concerned about the amount of work needed to maintain them.
There are generally two primary reasons for renovating. First, to improve your current home based on personal needs, which allows you and your family to enjoy the home more fully in the coming years. The second reason is to add value and increase the selling price of the home. However, in most instances, you do not recoup 100% of the money you spend on home renovations. With that being said, prioritizing where you are going to spend your home improvement budget is vital to saving money and stress in the future. According to the MoneySense article, “How to Make Smart Home Renovation Investments,” homeowners should follow these four general tips when renovating:
Choose improvements with long life expectancy
Focus on renovations that increase the market appeal and resale value and do not depreciate quickly.
Invest in modern updates, particularly in high traffic areas
Kitchen and bathroom renovations offer the best return. Investing in these high-traffic areas greatly increase a home’s value and overall beauty and marketability when you go to sell your home.
Don’t overlook (or underestimate) the more inexpensive remodel jobs
Small projects that add great value, visual appeal and don’t induce financial strain can be a great way to improve the market price of your home. Removing carpet and installing hardwood, updating lighting fixtures, or giving a home a fresh coat of paint go a long way to increasing your home’s appeal to potential buyers.
Consider energy efficiency
According to a variety of appraisal sources, energy efficient renovations are considered to have one of the highest returns, relative to cost. For instance, replacing old windows with energy efficient vinyl models will not only lower your utility bills, but it will entice potential buyers-.
If you have more questions about prioritizing home improvement projects that will improve the value of your home and live in the Greater Victoria area, contact us at Decter & Poole and we would be happy to answer any questions you might have about the current value of your home and which home improvement projects will garner the greatest returns.
TOGETHER, Hal Decter, LL.B. and Audra Poole bring a unique level of knowledge, experience and service that is hard to find.
For eleven years, Hal was a practicing real estate lawyer and partner with one of Canada’s top law firms. His client experience ranges from some of the country’s largest corporations to individuals and couples starting their first businesses or buying their first homes.
Audra brings her research acumen and luxury marketing and sales talents to the team. She is a highly respected marketing and public relations executive with more than twenty years of local, regional and international experience.
Whether you are looking to buy or sell a home in Victoria, Oak Bay, Sidney or Saanich – we’ll be on your side and make the process as stress free and seamless as possible.
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