How Renovations Can Pay Off and Bring You Joy
As we head into the May long weekend, if you’re trying to decide whether to renovate or sell, you’re probably weighing a few different factors. The financial benefits of renovations will pay off one way or the other - either immediately in your level of enjoyment or in the longer term when you choose to sell.
In a seller’s market, there are more buyers than homes for sale, so technically you don’t need to renovate to turn that For Sale sign to Sold. However, the right renovations can help sellers secure a homebuyer faster, and potentially for a higher price. On the buying side, renovating a fixer-upper may allow buyers to get into their neighbourhood of choice at a lower price. Meanwhile, for homeowners who aren’t quite sold on moving or who find themselves challenged given limited inventory of listings, renovations have become a way to get a bigger, better home without having to tackle this competitive market.
A Little Change Can Bring Lots of Joy
There’s a significant level of pride that comes from owning a home. That’s because it’s a space that truly belongs to you.
A recent survey of real estate brokers shows that more than half of Canadians renovated their home for personal enjoyment. According to a survey, three in 10 Canadians renovated to enhance their lifestyle, such as recreation and entertainment projects, while another three in 10 renovated to maintain their home. Last but certainly not least, 16 per cent of Canadians said they renovated to increase the market value of their home in order to sell within the next one to three years.
Regardless of their reasons for renovating, 59 per cent of Canadians said they always consider the return on investment that a renovation will have on their home’s market value. So, which home renovations pay off on resale? Here are the top renovations that give home sellers the biggest payouts.
8 Home Renovations for Maximum Resale Benefit
#1 Kitchen – kitchen renovations give the best return on investment, including new or updated cabinets, countertops and appliances. This can be attributed to the scale, cost and the general inconvenience (albeit a temporary one) of a kitchen renovation. Yes, renovating the kitchen yourself once you take possession of the home will be cheaper, however many homebuyers simply don’t want to put themselves through it – especially if they just completed a kitchen renovation on the home they are selling. The “move-in ready” factor is significant.
#2 Bathroom – bathroom renovations as a great high-return renovation. By the same logic as the kitchen renovation, homebuyers who want move-in ready homes with all the bells and whistles generally don’t want to take on expensive, time-consuming and inconvenient renovations, such as bathroom.
#3 Paint –a fresh coat of paint is the simplest and cheapest investment, and it pays off on the resale market. Aside from giving the home an instant refresh, home stagers also recommend light and neutral paint colours to make a home appear bigger, brighter and cleaner.
#4 Flooring – new flooring is a popular upgrade among homebuyers. Homebuyers largely prefer hardwood or tile over wall-to-wall carpets, which tend to trap stains and odours, and can really show a home’s age. This is a must, and if the seller is lucky, tearing up that old carpet could even reveal a hardwood floor underneath that just needs some tender loving care to bring it to its former glory.
#5 Finished basement – finished basements are a great selling feature on the resale market. In fact, any renovations that add liveable square footage to a home are always in demand. A lower-level family room, home office, an extra bedroom or bathroom in the basement can all give your listing a significant boost at the offer table.
#6 Outdoors/landscaping – outdoor projects can provide good ROI. As a result of the pandemic, people have been spending more time at home and thus, large years, pools and hot tubs, decks and patios, and landscaping are all appealing on the resale market. Depending on the scope of the project, this could be one of those low-investment, high-return upgrades that pay off on resale.
#7 Roof – roofing was a good option to invest some renovation dollars before listing a home for sale. New roof tied in sixth place with outdoor projects and landscaping.
#8 Open-concept floor plan – redesigning a home with an open-concept floor plan can pay off. This isn’t a small or inexpensive project by any means, but removing wasteful walls and halls can instantly modernize an older home and make it live larger than its actual square footage would otherwise allow.
Bottom Line
Deciding whether to renovate or sell is a personal decision. The financial benefits are critical, but don’t overlook the emotional impact renovations can have for you or future buyers. If you choose to sell, let’s connect to discuss your next steps.
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