To renovate or to relocate?
By: Beverly Allen - March 30th, 2007
Home renovation is fast becoming Canadians’ favourite past-time. According to a recent survey by the Royal Bank, 70 per cent of homeowners plan renovations or home improvements over the next two years, while two in three Canadian homeowners have renovated their homes in the past two years.
Many homeowners would rather renovate than move; the same survey indicates that 80 per cent of Canadian homeowners would choose renovating the home they already own over selling and moving. Still, most homeowners give some thought to what kind of resale return they’ll get on improvement projects.
Even if you have no intention of moving, it’s a good idea to do some cost-benefit calculations on changes you plan to make. You can help some help with this from the Appraisal Institute of Canada has a very useful interactive guide called Renova that gives information about the value of certain home renovations.
You can either pick a renovation category, says, redo a kitchen, add the amount you want to spend on it, and you’ll get an average range of return on that investment.
You can also pick from 20 of the most popular categories and get basic information about the return, as well as good tips. It can also raise warning flags about certain projects, such as above-ground swimming pools, which rarely add value and can even have a negative effect.
The AIC’s 2004 survey identifies roof shingle replacement, kitchen and bathroom renos and interior or exterior painting as having good ROI. Some of the renos with the least favourable ROI include landscaping, asphalt paving and adding a skylight.
Before you make any big decisions about doing renos before a sale, it’s a good idea to talk to realtor.
If you do decide to do a renovation before selling, keep in mind that when it’s finished, the new room should be consistent with the overall condition and style of the house. If you have a dazzling professional kitchen in a house that has sagging floors and whose roof needs repair, you’re not going to get all the return back.
Be objective in your choices. You’re not building your dream room, but the dream room of a buyer. Currently, hot trends include main floor laundry room and/or floor office, garages that are designed as extended living space, exercise area or workshop, outdoor kitchens and low or no-maintenance landscaping.
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