Avoiding Renovation Traps
Many people renovate their home to end up with a more comfortable place to live in, and that’s perfectly fine but you have to be aware of the other goal that’s sometimes masked: To get a good return on the value of your home when you sell it in the future. The Appraisal Institute of Canada takes a survey every year on which renovations end up being the most beneficial for the value of the homes being renovated on and there are a few findings that are important to note.
1. Your renovation budget should be relative to the existing value of your home.
For example, you wouldn’t put a $50,000 improvement into a property that is worth only twice that. This point should be explained after reading the next few.
2. Don’t stand out too much.
Should the exterior or feel of your home not match your neighborhood, it will potentially be incredibly off putting to potential buyers. You don’t want your house sticking out like a sore thumb in a nice cul-de-sac.
3. Know the average value of your neighborhood.
The renovations that make the most of your investment are the ones you make if your home is slightly below the value of your area. The added value in doing a renovation will be pleasant to buyers. In contrast, the return on investment diminishes the more your property is above the average value.
4. Smart projects.
The renovations that almost always pay for themselves are bathroom and kitchen renovations as long as you don’t go too overboard. New interior paint also belongs here. Slightly down the list are renovations such as a new roof or heating system. These will probably recuperate 75 to 80% of their cost in the positive impact that they will have on your house value.