Learn Which Home Renovations Give You the Best Return

It’s time to sell, and you want to get as much value from your Spruce Grove, Stony Plain, Parkland County or Edmonton area home as possible. What home improvements will make that happen?

Most people buying a home want to move into a property that looks new. If you’ve been thinking of selling your home, you’ve probably heard the following advice. Before you put your home on the real estate market, make all necessary minor repairs. Fix that dripping faucet, oil that creaky kitchen cupboard hinge, tack down that loose carpet edge. Give your home a thorough cleaning inside and out. Wash the floors and walls (including the insides of all cupboards and closets), get the carpets cleaned, shine all the windows and mirrors, and, above all, get rid of clutter so that your home looks as spacious and welcoming as possible.

But these are mostly cosmetic touches, much like a woman’s eye shadow and lipstick when she goes out for the evening. What if your property needs the real estate equivalent of Botox injections or, worse, open heart surgery to bring it back to its brand new appearance and structure? If you invest the money to do major repairs, such as reshingling the roof, or to do major updates, like remodeling that ugly old bathroom, will you get your money back through a higher selling price?

The truth is – maybe, but more likely not. Renovating just before you sell is a risky proposition. Any improvements you make to your property may make it more attractive to buyers which may result in a faster sale – or even determine whether it sells at all. You may get a higher selling price than you would have before the renovations. But it turns out that most renovations will not increase the value of the property by 100% of the retail cost of professionally done renovations, with a couple of exceptions.

Ergil & Jackson Appraisals Ltd. (formerly Henderson & Butt) in their Home Renovation Guide include an extensive list of renovations together with the approximate cost, and the possible returns on investment in both percentages and dollar amounts. Their calculations are based on a hypothetical 1200 square foot bungalow located in the city of Edmonton and hiring out the work.

According to this guide, most renovation projects, small or large, will net you a return of only 50 to 75% of your investment.

New cedar shake shingles for your roof? Expect to lay out between $10,400 and $18,200. The return? Anywhere from 50 to 70%, or $5,200 to $12,740. Depending on the condition of the roof, it might be better to simply disclose to prospective buyers that the roof needs repair.

You’ve probably heard that kitchens and bathrooms sell homes. A bathroom remodel, using standard quality new fixtures, flooring and ceramic tile, might set you back between $10,000 and $16,000. But you’ll get that back when you sell, won’t you? Not according to the guide, which says this type of renovation will bring you a return of just 60 to 80%, or between $6,000 and $12,800. Doesn’t seem worth it, does it?

And it gets worse, with some renovations giving you as low as a 0 to 10% return (adding a skylight, installing an alarm system, putting in a garburator or air conditioning). Some renovations, such as adding a sauna or an outdoor hot tub or swimming pool, might even make your property harder to sell!

So which renovations are the best compromise between making your home look its best and giving you a high return on your investment? Improvements that give you a return of at least 70% include:

•  Exterior siding of artificial masonry brick: 70 to 100%
• New roof shingles (asphalt, rubber or metal): 70 to 90%
• Average quality kitchen remodel: 70 to 85%
• New furnace: 75 to 90%
• In-suite laundry added to condominium: 95 to 100%
• Electrical service upgrade: at least 90%
• Garage: 70 to 100%

Saving the best for last:
There is one renovation that will give you your money back, and then some. Good old-fashioned paint, one of the easiest and cheapest renovation projects, especially if you do it yourself, could give you back up to 110% of your investment. Watch for painting instructions and tips in future blog entries.

Check out Ergil & Jackson’s other suggestions and advice.

***A word of caution about renovations in general: Remember that, whether you hire someone or do it yourself, the finished product must always look as though a professional did the work. If you are thinking about renovating before you sell, talk to your realtor about the kind of return you can expect for all your hard work.

For more tips on selling your home, visit the Sellers Guide section of my website.

Comments or questions are always welcome! Email me at barry@barryt.ca, call me at 780-910-9669 or contact me here.

With the popularity of all sorts of home renovation shows, people in Spruce Grove, Stony Plain, Parkland County, the Edmonton region and elsewhere are experimenting with home decorating home improvement, and home flipping at unprecedented levels.

I have to admit I watch a lot of these programs myself. We humans are drawn to watching other people work. It is amazing how easy some professionals make things like framing, dry walling, painting, decorating, etc, look. The key word here is professional. I often say to people you can do any improvement yourself and save the labour cost (about 60% of the cost of the improvement); however, the end result has to look like a professional did the job.

I understand the motivation to want to do the work yourself. First off it doesn’t look that hard to do. Second you don’t have the extra money to hire someone to do the work, we have all been there. But one day (statistically within 5 years) you will be trying to sell your home and the improvements in it to someone else. Even unsophisticated buyers, people who have never owned their own home, recognize poor or amateurish work. If a home has a number of areas where a home owner has done home improvements poorly, a potential buyer may perceive negatively.

Here’s how perception works

Perception is a buyer’s belief system.  Whether right or wrong, what buyers perceive they believe. A buyer’s perception can extend beyond any poor work done by you or someone else.  It could be perceived that most of the improvements in your home were done amateurishly or cheaply. I cannot overemphasize the importance of making your home improvement projects look like they were done by a professional. Here are a few hints:

1. Do some research before you take on a project. The internet is a great source. Be careful to select the right tools for the job. For instance when painting, not all brushes, rollers or paint are the same. They are all designed for different purposes and applications. Also if painting, make sure you learn to cut in properly. Roller hit marks on the ceiling are a trademark sign of a home improvement project gone bad.
2. Sign up for home improvement seminars at your local building supply centre, Home Depot, Rona, etc.
3. Find someone who is handy at doing their own home improvements and offer free labour to help them take on a home improvement that you feel most comfortable with.
4. Start in an area that is less visible, like a bedroom (preferably down stairs), closet, or storage room.
5. Be prepared to invest time. It will probably take you 2 to 3 times longer the first time you tackle a renovation, compared to someone experienced at it. If it doesn’t go right the first time you do it, be prepared to re-do it. Remember that by learning to do it right you are accumulating cumulative knowledge that will come in handy the next time you need to use it.

Although you feel you are doing the improvement for yourself, remember that when you decide to put your house up for sale, you are now trying to sell the improvement to someone else.

If you do decide to do home improvements on your own, either by necessity or desire, take it slow. Do the research, take your time, make sure you select universally appealing colours, and do the job well. It can be rewarding, both financially and emotionally. But remember:  whatever improvements you do to your home should look like a professional did it. Enjoy the savings and the added value of your home.

Looking for more information about Spruce Grove real estate?  Call me at 780-910-9669, email me at barry@barryt.ca, or contact me here.