John Lam
 
          Renovating with an eye on resale value         
Before spending thousands of dollars on renovations, itís a good idea to find out whether youíll recover the cost when you sell your home. Start by consulting a knowledgeable local realtor to determine what types of renovations are likely to offer a good "return on investment" in your neighborhood.

Average Potential Payback of Home Renovations
Interior Painting and Decorating 73%
Kitchen Renovation 72%
Bathroom Renovation 68%
Exterior Painting 65%
Flooring Upgrades 62%
Window/Door Replacement 57%
Addition of Main Floor Family Room 51%
Fireplace Addition 50%
Basement Renovation 49%
New Furnace/Heating System 48%
Source: The Appraisal Institute of Canada,
 

Here are some tips for choosing a contractor to renovate your home.

Many Realtors suggest following these guidelines if you want to renovate not just for comfort and style, but for enhanced resale value:

  1. Donít "out-renovate" for your neighborhood. Housing prices are largely driven by location. If you live in a moderately priced neighborhood and renovate your home with a luxurious spa bathroom and upscale gourmet kitchen, you are not likely to recover your costs. Compare your home to others in your neighborhood, and donít renovate far beyond the area standard. The proverbial "best home on the block" is often the hardest to sell.


  2. Stick to classic styles and avoid trendy renovations. In the 1970s the popular style was wall-to-wall shag rugs and avocado green appliances, in the Ď80s it was mirrored walls, chrome track lighting and pastel colors. Both types of interiors that are now very hard to sell! Your best bet for resale value is timeless interior finishing Ė neutral carpets or hardwood floors, classic wood cabinetry, and white appliances.


  3. Investigate zoning bylaws and permit requirements. For major renovations such as adding a deck or garage, or converting a basement to an in-law suite, you will need a building permit from your municipal city hall. Some types of renovations may be restricted depending on the zoning for your property. Renovations completed without proper permits can cause serious problems when it comes time to sell your home.


  4. Expensive doesnít mean better. Sometimes the most expensive renovations are the ones that pay off the least. Swimming pools and hot tubs require a lot of maintenance and take up a lot of space Ė these can sometimes detract from resale value. Air conditioning and central vacuum systems are expensive to install and often donít pay off as much as cheap renovations such as fresh exterior and interior paint, new carpets and new kitchen cabinets.


  5. Get the job done right! The quality of the renovation work directly impacts your resale value. Buyers are increasingly knowledgeable and will look closely at workmanship and the quality of materials, in addition to having an inspector examine the home from top to bottom. Unless you are a very skilled handyperson, donít take on major projects such as upgrading plumbing and electrical systems.


  6. Do your homework. Before starting any renovation project, carefully investigate material costs and product options, suppliers and professional contractors. Check references for all contractors and get all agreements in writing. The Internet is a great resource when you start planning.

         


 
Copyright 2007, John MK Lam - RE/MAX - City Realty. All rights reserved