Renovating to Improve Your Home's Equity

To most, buying a home goes beyond buying a place for you and your family to live in. Homeowners see their homes as long-term investments in the housing market. People are investing thousands of dollars into their home renovation projects to improve their quality of life, but they should also be considering the value these projects yield, just in case they want to sell. By updating the home with high-return renovations, you can help to improve the ultimate return on investment (ROI) for your home. Some features are more valuable to market-goers, and for these, they will pay much more for.

Kitchen & Bathroom Renovations

The home renovations that most commonly yield the highest return are found within the kitchen and bathroom. As essential parts of the home, homebuyers pay particular attention to these spaces. The key to yielding a high ROI on these renovations is to keep them within good taste by sticking to universally appealing trends. Another thing to keep in mind is to make these renovations appropriate for the rest of the house. You wouldn’t commonly find a modern kitchen fit for a million dollar home in a 10 year old, traditional townhouse. Kitchen investments should be funnelled into upgraded appliances, high quality countertops, and to opening up space in the kitchen (eg. taking out a wall to open the room to the living room, or converting to an L-shaped rather than U-shaped kitchen). Bathroom investments can either be used to spruce up existing bathrooms or add another bathroom where you have extra space. You can also invest in revamping sinks, toilets, and tubs with new fittings and caulking. Homebuyers also look for good lighting in the bathroom. Creating a window for natural light, and/or updating light fixtures to create ambient light that mimics the glow of natural light could achieve this.

Walls, Floors and Roof

A simple home improvement that has been cited for increasing home value is the simple paint job. The key to painting the house for high a ROI is to use neutrals colours like beige, creams, and soft yellows. This is especially important for those who anticipate selling the home in the near future since these are colours most often recommended for staging the home for buyers.

Floors can show the wear and tear of the home, and for this reason, upgrading them can yield a high return in the future. Hardwood floors or engineered hardwood are good choices to improve home equity. Installing carpets is not recommended because of how they trap dirt and allergens over time, thus making them unattractive to buyers.

The roof is often neglected, but it is a good place to allocate renovation dollars to for a good ROI. In Canada, roofs are subject to severe weather, so maintaining the roof is very important. Buyers look for roofs that are in recent good shape because it is one less renovation they have to worry about when they move in.

Additions

Many Canadian homeowners are opting for a “staycation”, and for this reason, are investing in large decks to enjoy the backyard during the warmer months. Decks and porches have shown to yield a good ROI because of this demand. It is a good idea to make the deck large enough to accommodate a barbecue, dining set, and lounge chairs. A reasonable amount of perennial landscaping is a smart investment as well because they add to the overall appeal of the deck area. To many a surprise, outdoor pool additions have been shown to not yield the return that homeowners expect. This is because of the maintenance that is required for a pool, and due to the Canadian climate. Finally, real estate agents are recommending homeowners to not convert rooms from their original purpose if they want to achieve a high ROI on their renovation dollars. This means keeping the bedrooms in a state that allows them to remain bedrooms (avoid making structural changes to these rooms). Another example of this is to keep garages as fully functional garages by not converting them to recreation rooms.

The return on investment is a key concept to keep in mind when you are thinking of renovating your house. Your renovations should serve your anticipated needs above all, but it is wise to satisfy these needs in a way that also increases the value of your home. These tips are not limited to those who are renovating their existing house. If you have decided to customize the build of your home, it may be a good idea to incorporate these elements into your design to yield a higher return in the future.

What else would make a home more valuable to you if you were in the buyer’s position?