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 paintjob 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. With average paybacks
of 72 and 68 percent respectively, 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 .....................................
72%
- Bathroom renovation .................................
68%
- Exterior paint ...............................................
65%
- Flooring upgrades .....................................
62%
- Window/door replacement .......................
57%
- Main floor family room addition ...............
51%
- Fireplace addition ......................................
50%
- Basement renovation ................................
49%
- Furnace/heating system replacement ... 48%
According to another study (Prepare to Sell by HomeGain.com
in California) smaller changes to a home can also reap
hefty rewards. Any addition that brightens your home
(such as new light fixtures) should be returned in the
selling price by an average 84% of the cost of the renovation.
As an expert on home sales trends in
your neighbourhood, Craig Laine Realty Inc. can suggest
which areas of your home could benefit from renovation
and increase its value and salability. |
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