Making the right renovation decisions
Experts agree kitchen renos offer the greatest potential to increase a property’s value
Patti Ross is a full-time professional Realtor® and home improvement expert helping people buy, sell and improve their homes in HRM for more than 10 years.
In a recent cross-canada poll (Royal Lepage Home Improvement Survey) of more than 750 Royal Lepage real estate professionals, it was determined that updating or renovating the kitchen is the best option for increasing a property’s value, with the potential to boost the property’s value by more than 12.5 per cent.
In a tie for second place was an updated bathroom and a finished basement. According to the survey, each of these renovations has to potential to increase the homes value by an additional 2.5 per cent to 12.5 per cent, depending on the upgrades. These figures are dependent on several factors such as the value of the home and neighbourhood, as well as the age of the property.
The poll showed that in Canada, adding a pool does not increase the value of a property as it would in warmer climates. In fact, the experts say it only increases the value a maximum of 2.5 per cent. In some cases, buyers may even disregard a property that has a pool because of safety concerns or costs associated with maintenance and upkeep.
The poll revealed that most sellers expect to spend some money on upgrades to prepare their home to list. On average, most are willing to spend less than 2.5 per cent of the home’s value, an investment of up to $15,138 on a property valued at $605,512 (Source for the Canadian (National Home Price Aggregate, Royal Lepage House
Price Composite, Q1 2018) ) — the current median home price in Canada. In the Halifax area, where the current average sale price is $307,821 (Paragon MLS for YTD Ending July 10, 2018), it would be an investment in upgrades of about $7,695.
According to the survey, baby boomers are the demographic most likely to embark on renovations to increase their home’s value. This is for a couple of reasons. First, baby boomers are already thinking about selling and downsizing, and second, they tend to have the available funds to pay for renovations.
Making the right renovation decisions can help sell your house quickly and for more money. If you are planning to sell, you will want to appeal to the largest number of potential buyers. So keep that in mind when you’re deciding on finishes and colours. Don’t select anything too bold or personal. Consider talking to a professional stager or real estate professional prior to starting your upgrades.
Since an up-to-date kitchen helps entice homebuyers, money spent in this room can usually be expected to have a good return on the investment. Having said that, ensure the cost of the upgrades is in keeping with the value of your home. Potential buyers shopping in a mid-price range will expect more than entry-level cabinets and countertops. Making appropriate selections will ensure you will see a good return on your investment.
A word of caution — don’t get too caught up in the excitement and over-renovate for your house and neighbourhood. If you are already one of the most expensive homes in your area, it may be hard to add more value. To be sure you are spending your money wisely, consult your real estate professional. They can provide you with what comparable homes have sold for with particular updates and provide valuable advice.
Even small, low-cost improvement projects can have a big impact. All that your kitchen may need is a bit of a facelift. Replacing a dated countertop, swapping out old hardware, installing a new faucet, updating light fixtures or adding a contemporary backsplash may be all you need to do. Also, with the recent trend in painted cabinets, a fresh paint job may give the appearance of an entirely new kitchen without the hefty price tag.
But before you start ripping out your entire kitchen, consider if it’s worth the effort. If you have a home that you know will require a lot of renovations, it may not be worth the time, effort and money to invest in specific upgrades. It may be better to market and sell your home “as is” and let the new owners do the renovations to suit their own tastes.
Finally, always hire licensed professionals for any home improvement projects you decide to take on. If you happen to have the skills to take on projects yourself, you can save money on labour costs. However, if you do not, and the project looks like it was done by an amateur, it could actually turn off potential buyers. So leave it to the professionals. In my experience, hiring a professional will save you time, money and a lot frustration.