However, by renovating strategically, you can increase your selling price enough that a significant portion of the renovation costs are passed onto the future owner.
The return on investment of any renovation is influenced by local market conditions and the quality and character of the work. Keep in mind that you’re renovating to the buyer’s tastes and not your own.
Find out which features and trends buyers are looking for in your area. Avoid the temptation of improving your home beyond the average for your neighbourhood. No matter how beautiful the result is, if it makes your home too expensive for your area, the return on investment will be low.
Fortunately, there are long term studies that can help you decide which renovations will add the most resale value. For example, Realtor magazine publishes an annual cost vs. value report that compares common remodelling projects and shows the payback homeowners can expect. They are all projects that buyers can immediately notice as opposed to structural improvements like a new furnace or insulation. Here are the Top 10 renovation projects, ranked by average payback as a percentage of cost:
1. Wood deck addition (80-85%)
2. Siding replacement (75-83%)
3. Minor kitchen remodelling (75-83%)
4. Window replacement (75-80%)
5. Bathroom remodelling (70-78%)
6. Major kitchen remodelling (70-78%)
7. Attic bedroom remodelling (65-76%)
8. Basement remodelling (65-75%)
9. Two-storey addition (65-74%)
10. Garage addition (60-70%) Another consideration is how soon you plan to sell. The more recent the renovation, the higher the return on investment. So its best to have a clear idea of your medium-term plans before you decide to renovate.
If you would like to explore how refinancing your home can help pay for your renovations, please call me today.