Oakville Real Estate News

Which renovations offer the best return on investment?

Blog by Joette Fielding | July 26th, 2013

Home RenovationsNot all home renovations are created equally!  Before beginning a costly home improvement project, consider how much of a return you will realize from that investment when you sell your home.  This will help you to determine whether or not you wish to proceed.  

If you are renovating strictly to sell your home, spend your money on projects that can potentially increase the value of your home by the amount that you invest.  Although many people choose their home improvements strictly for their own enjoyment, most people prefer to know that they will receive a high return for their investment dollars.

According to the Canadian Housing and Mortgage Corporation, 37 per cent of homeowner households renovated their homes in 2011, with the majority of these homeowners renovating to update, add value, or prepare to sell. The most popular renovations were room remodels, followed by painting or wallpapering, then renovations involving plumbing fixtures and equipment. But according to the statistics, do these renovations have good return on investment?

The Appraisal Institute of Canada estimates that the following percentages are recovered upon resale for each of these major renovation projects:

Kitchen upgrade: 75% to 100%
Bathroom upgrade: 75% to 100%
Interior painting: 50% to 100%
Roof replacement: 50% to 80%
Replacement of furnace or heating system: 50% to 80%
Expansion (addition of family room): 50% to 75%
Doors and windows: 50% to 75%
Deck: 50% to 75%
Installation of hardwood floor: 50% to 75%
Construction of a garage: 50% to 75%
Fireplace (wood or gas): 50% to 75%
Central air conditioning: 50% to 75%
Finished basement: 50% to 75%
Wood fence: 25% to 50%
Interlocking paving stones on driveway: 25% to 50%
Landscaping: 25% to 50%
Asphalt driveway: 20% to 50
Pool: 10% to 40%
Skylights: 0% to 25%

Research shows that year-after-year, new or improved kitchens and bathrooms are at the top of the payback list with most or all of the expenses being recovered at resale.  When contemplating any major renovation, it is important to understand that the amount you invest into a renovation project needs to be relative to the value of your home.  In other words, don’t over-renovate to become the most expensive house on the street!

The Fielding Team

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For all your real estate needs, call The Fielding Team at 905-338-9000 or visit our website at: http://www.thefieldingteam.com/