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How much does a home renovation cost and will I recoup my money when I decide to sell my home? These are common questions that homeowners face when deciding to partake in a home renovation. Luckily for us, Remodelling Magazine puts together some data to help answer these questions. With the 2015 numbers just released, we can shed some light on whether or not those renovations make sense for you and your home.
But we live in Canada and this information is from the United States.
Although the information from the 2015 Cost vs Value report is based on our neighbours to the south, a lot of the national information does parallel what is happening here in Canada. Of course, developing your attic into livable space may not gain the same kind of returns here in Edmonton, as it would in various places in the US, but for the most part, the numbers presented offer a good ballpark figure to start with, after all they are just averages.
Looking at the numbers, it appears that most projects won’t net a 100% Return on Investment. Does this mean it’s worth it to remodel my home?
Absolutely. There are factors that the cost vs value report doesn’t address. These factors can change whether or not a home renovation makes sense. Here are a few that we think are important to help make a decision whether or not to renovate.
By in large maintenance is just that and we should make our homes nice environments to live in. That said, even though maintenance is a necessity, doing so probably won’t add any extra value to your homes net worth. However lack of maintenance will definitely have a negative effect on the value of your home.
Real Estate Market
If you’re planning to sell your home, a recent renovation will add some value to the asking price, and it could also make your home more marketable depending on what the general public is prepared to spend on extras. The trend with home buying is that people want to move into a home that doesn’t require extensive remodelling. In slower real estate markets, an out-of-date kitchen or bathroom may mean a tougher time selling your home.
Location and property value
Doing an extensive kitchen remodel on a small home won’t give you as great return on investment as it would with a larger home in a nicer neighbourhood. The size and location of your home will dictate how much value you’ll see out of a renovation.
Cost vs Value numbers don’t apply if your plan is to do the renovation for your own use. Instead you should focus on Cost of the Renovation vs. The Somewhat Tangible Happiness and Enjoyment Value. In other words, if it’s affordable and you plan on living in your home for years to come, you should renovate. And in our opinion, this is the best reason of all to renovate. After all, why spend money on a fabulous renovation for someone else to enjoy?
If I am going to renovate to bring value to my home for resale value, what renovations should I be doing?
The data presented in this year’s report continues, for the most part, to reflect what has been happening for the previous couple of years: smaller projects that update the look of your home give you a bigger bang for your buck than larger remodels. A new front entry door, a window replacement, or a new wood deck are great ways to add value to your home. An often overlooked project is replacing an ageing garage door. Try focusing on the renovations that have broad appeal and avoid the ones that don’t.
I’m still a little unsure whether I should do “x” in my home? Where else can I find out more?
Luckily for you, there are many publications, both online and offline that discuss home renovations. Magazines, websites, and blogs (such as this one) offer a lot of advice on going about the business of renovating your home. You can also get some great ideas for renovations and trends by checking out a few show homes. They offer the latest designs and trends in homes, and you may see something that would work great in your home.