Which renovations and repairs get the greatest return is one of the most asked questions from clients who have decided to list their home. Of course, visions of chef inspired kitchens and spa-like bathrooms most likely dance through an owner’s head, but when it comes to appealing to a market of buyers, it’s the essentials that buyers want to be able to take for granted, and that includes the exterior as well as the interior!
When appraisers are assessing renovations and repairs, the payback is measured in one of three ways:
1. Maintaining your property’s worth
2. Increasing the selling price of your property
3. The value attached to enjoying the renovated space
For the sake of this article, we will look at numbers 1 and 2, since we’re talking return at resale.
If you plan to sell your home “one day,” then it’s important that you prioritize your remodelling and repair budget accordingly. While a well-groomed and landscaped yard may yield tremendous personal enjoyment, it will only see a 25-50% return on your investment, and only to those buyers that consider landscaping to be a priority.
If you apply the same cost and effort to maintaining the mechanics of your home, it isn’t just the return on your investment that will increase, you will also be a more appealing property to potential buyers because you will have eliminated significant points of concern for them that could potentially be used in negotiations. Roof/shingle replacement, updating the heating/cooling system, replacing windows and doors, updating your electrical panel and addressing any structural defects are all things that will provide you greater return on your investment; in fact, the return can be over 90%. That’s money well spent!
The ultimate return on your investment comes when looking at renovations that will not only pay you back at sale time, but also attract potential buyers. Major remodelling on kitchens and bathrooms can see up to a 100% return on your investment. Details as simple as replacing knobs and hardware or painting the interior and/or exterior will bring the same return. The quality of the materials used and workmanship provided should be in line with the home itself and also with the neighbourhood in which it resides.
Before you go busting out the colour swatches and tile samples, it’s worth your time to meet with a member of the GorleyLalonde team who can assess your home and refer a tradesperson or contractor who has a positive track record with our agents and our past clients. Contact us today and we will be happy to share our portfolio of trusted trades people and contractors with you!
*Please note that above figures and statements are a “best estimate” based on the most typical remodeling projects. The maximum time between renovations and resale must not exceed 5 years. AICanada.ca provided reference for how appraisers measure value.