RETURN ON INVESTMENT for YOUR HOME RENOVATION
According to the Appraisal Institute of Canada’s Home Renovation Survey, the top three (3) renovations that return the most money when selling are:
|3.||Interior & Exterior Painting||50-100%|
When a seller is renovating in order to sell, the changes must be acceptable to the majority of potential buyers for that home and they must also reflect current market trends. An Avenue Realty Inc., Brokerage sales representative helps our sellers determine who the potential buyer is, thus what changes will suit the potential buyers of the home.
Other renovations and their average rate of return, or the value they add to the resale of the house compared to what they cost, include:
|•||Replacing roof shingles||50–80%|
|•||Replacing the furnace/heating system||50-80%|
|•||Renovating the basement||50–75%|
|•||Adding a room (ie family room addition)||50-75%|
|•||Installing a fireplace||50-75%|
|•||Building a garage||50-75%|
|•||Replacing windows and doors||50-75%|
|•||Building a deck||50-75%|
|•||Installing central air||25-75%|
It is important to understand that while some of these items do not return substantial returns, they may reduce the time that it takes for your home to sell, and therefore can have a positive effect on the resale value.
It is crucial that sellers consult with a sales representative prior to making any decisions and committing to renovation or construction contracts, so that current market conditions are considered. This will ensure that you maximise your return on investment.
According to AIC, homeowners must also consider the following:
- Renovations adding features to a home that brings the home up to the same standard as other homes in the neighbourhood have a higher recovery rate than adding features not seen in similar homes. Simply stated – don’t over-improve your home.
- Renovations on homes having a lower market value than others in the neighbourhood provide a higher return than renovations done on a home in the same neighbourhood with a higher market value. Again, do not over-improve your home.
- Poorly done renovations will have NO positive effect and will actually reduce the value of a home.
- Renovations done on a home which has maintenance problems will not increase the resale price of the home. It is essential to maintain your home in good repair.
Contact an Avenue Realty Inc., Brokerage Realtor to learn how we can help.