As 2013 comes to a close, many homeowners will be considering undertaking home renovations in the New Year. Usually there are two reasons why renovations are done: for homeowner enjoyment, or in preparation to sell. But as a real estate broker, I recommend home owners always consider return on investment when doing home renovations, even if they aren’t planning on moving any time soon.
Remodeling Magazine recently released American statistics for average remodeling costs; resale values and the amount of the costs recouped during a sale for a number of midrange and upscale home renovation projects. While the same information isn’t provided for Canada, the numbers can be applied to any home renovations you may be considering.
For a number of years, many homeowners have been investing a great deal of money into major kitchen remodels. It’s a dream of plenty of people to have an upscale, chef-style kitchen that just isn’t created by builders, or in older homes. According to the numbers released by Remodeling Magazine, Americans spend, on average, almost $54,000 on such projects. Yet they only recuperate about 69 per cent of those costs as it only adds $37,000 worth of value to a home.
For a higher resale value, consider a minor kitchen remodel costing less than $20,000 and you’ll get 75 per cent of that back upon sale of your home.
While other popular renovations in the midrange category include various additions and remodeling the basement, home office and bathroom, the renovation with the highest return on investment is a steel entry door replacement. At an average cost of just over $1,000, you’re likely to recuperate 85 per cent of that upon sale of your home.
In the upscale projects category renovations included adding a master suite, deck and replacing windows, but it was fiber-cement siding replacement that took the top spot of recouped value at 79 per cent.
Of course that’s not to say that necessary renovations shouldn’t be completed simply because you won’t recuperate the full amount invested upon sale of your home, but it does add some caution as to how much you should spend on your projects in the new year. Consider your available budget, how necessary the project is, how long you will remain in the home to enjoy it, and make your decision from there.
If you would like to obtain a copy of the detailed renovation report please give me a call at 289-338-0767 or email me at Roxanne@ChestnutPark.com.