Blog by Kevin Martin

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Home Renovation Tips!

Check out these tips on renovations that have the highest return on investment!

Renovations with High ROI

December 9th, 2010

There are two main reasons why people choose to renovate their home: to improve their quality of living while they reside in the home and to increase the value of the property so that they can make more money when it comes time to sell. The ideal circumstance is to get the best return on investment that you can whenever you choose to renovate your home. Some renovations can add value to your home as soon as they’re completed, while others may take years to recoup the investment. There is a lot of conflicting advice on which renovations provide the highest returns (often depending on which building contractors you talk to), an example of this would be the true benefit of green building projects. To help you cut through the noise, here are some general tips to help you choose renovations with the best return on investment.

Home Renovation Considerations
Before committing to any home building plans, it’s a great idea to consider these questions:

1. How will the renovation affect the appraised value of the home?
2. How many years will you reside in the home?
3. How strong is the resale market in your location?

One great example of a renovation that is worthwhile over the long term is installing energy efficient lighting, heating and insulation. Even with government tax rebates, the work can initially be quite expensive, but the savings year over year will eventually pay for the renovation entirely within 5 to 10 years.

Home Appraisal Renovations
If you’re looking to raise the appraised value of your home, it helps to understand that an appraiser isn’t necessarily interested in the types of appliances or the color of the paint used in the living room. They look at the prices of comparable homes in the neighborhood that have sold recently, and they also measure your home against the standards established in other local homes. If your neighborhood has mostly three-bedroom homes with 2.5 bathrooms and your home has only one bathroom and two bedrooms — your property will be appraised lower.

In this case, adding another bathroom or bedroom could significantly increase the worth of your home if it brings it up to the neighborhood standard. However, renovations to the basement, while attractive to home owners and prospective buyers, are often disregarded by appraisers because the basement isn’t included as living space square footage.

Tried-and-True Renovations
Kitchen and bathroom renovations are almost always at the top of the list for return on investment. Not only are they among the busiest rooms in the home, they also have plenty of fixtures and cabinets that can be updated to add value to the home. There is a dizzying variety of home fixtures at big box hardware stores that can significantly improve the appeal of almost any kitchen or bathroom.

One of the most effective renovations when it comes time to sell does not require any extensive planning or expensive equipment rentals: simply remove the clutter from your home. This makes each room of the house more spacious and inviting, greatly improving the odds of getting your desired selling price without costing you anything!

 

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