Almost any renovation will add to, or at least protect, the equity in your home but kitchen and bathroom renovations and painting top the list.
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Be clear about your renovation expectations. Learn when to draw the line between what’s desirable and what’s essential.
Everyone has a different reason for wanting to renovate. Sometimes it’s the simple need for a change. Other times, the motivation is more practical. If you wake up one day with a puddle in the basement and a water-stained ceiling, you know you have to act fast.
In general, there are three types of renovation: lifestyle, retrofit, and maintenance and repair.
– Lifestyle renovations improve your home and your way of life. They might involve building a sun room for pleasure, or converting unused attic space into living quarters to meet your changing needs.
– Retrofit projects usually focus on your home’s shell or mechanical systems. Examples are upgrading your insulation, replacing your furnace, or putting on new siding.
– Maintenance and repair renovations protect the investment you have made in your house through activities such as caulking windows, reshingling your roof, or replacing your eavestroughs.
While maintenance renovations aren’t really a choice — they’re part of owning a home and protecting your investment — lifestyle renovations and even some retrofit plans may not be practical or do-able.
Be clear about your expectations. Learn when to draw the line between what’s desirable and what’s essential.
Almost any renovation will add to, or at least protect, the equity in your home, but kitchen and bathroom renovations and painting normally provide the greatest payback when you sell. If your property taxes and insurance premiums go up, the increase is usually small.
Over time, the money you save on heat, light and water by making your home more energy efficient may actually pay for the upgrades. Safety also pays. Insurance companies often decrease premiums when you improve wiring or fire prevention and improve or add a security system.
On the other hand, you can overdo a good thing. If you plan to move within a few years, is the renovation worth it? Will it pay to put on an expensive new addition when your house is in an area of more modest homes?
The Appraisal Institute of Canada has developed RENOVA, an interactive web-based guide to the value of home improvements.
RENOVA is designed to give consumers a better idea of the return on investment they can expect for a variety of home improvements. Homeowners can choose from among the 20 most popular renovation improvements, identified by a survey of AIC members.
Consumers should be aware that RENOVA is a guide, which provides ranges. Home values and returns on renovation investments are dependent on so many factors such as the location of the property, i.e. province, rural/urban, the neighbourhood and notably important is the quality of workmanship and materials.
An AIC valuator can identify the value of your home prior to the renovations being undertaken and provide a projected valuation based on your anticipated renovation plans.
Homeowners could save themselves a lot of time, expense and heartache by calling an appraiser first, even before the designer, contractor and architect.
CMHC offers an extensive library of valuable information for home renovators. Visit www.cmhc.ca and click on the Consumers section.
To find out more about RENOVA visit the Appraisal Institute of Canada’s website at www.aicanada.com and click on Resource Centre.
