When people consider a home renovation, one of the things they consider is the value the renovation will add to their home.
So, after years of watching interior design shows and more recently, photos and videos on Pinterest, I had wild ideas of how I was going to transform my home.
I did online research and called contractors and it didn’t take long to realize that the changes I had in mind wouldn’t necessarily add the value I had hoped. If I customize my home too much, it wouldn’t appeal to as many buyers when I wanted to sell.
The recovery rate is the likely increase a renovation will have to a home’s resale value. So, a $5,000 renovation that increases a home’s value by $3,500 has a recovery rate of 70 per cent.
The non-profit personal finance web site GetSmarterAboutMoney.ca offers five types of renovations that add value to a home:
Investments in efficient use of energy (60 per cent recovery rate)
New or improved kitchens and bathrooms (75-100 per cent recovery rate)
Low-cost improvements – painting, wallpaper, etc. (50-100 per cent recovery rate)
New windows or doors (50-100 per cent recovery rate)
Basement renovation (50-75 per cent recovery rate)
While this might seem like common sense, after going through the process on my own home, I can see how easy it is to get carried away with home improvement projects, or turn a small renovation into something bigger and much more expensive than originally anticipated.
So instead of focusing on a better walk-in closet, a built-in shelving system for my kitchen and redoing my fireplace, I’ve decided to start small and spend $3,700 replacing the green shag carpet and chipped tiles with high-quality laminate flooring, ripping out a built-in desk, and giving the walls a fresh coat of paint.
My plan is to gradually work on the kitchen and bathroom – replacing tiles, counter tops, and refinishing the cabinets.
My hope is that these small improvements will increase the value of my home, without being a burden on my wallet.