One of the biggest questions that homeowners have is whether a renovation they are thinking of doing will pay for itself in the form of a higher sale price when they look to sell the house down the road. It becomes even more critical if despite the best of intentions, that reno didn’t take place until shortly before you put the house on the market. At that point, you are really concerned about whether it will add value as you may still have the balance sitting on a credit card!
While every renovation and home situation is a little different, below are some payback ranges of typical renovations, provided by the Appraisal Insti
tute of Canada in 2006. Keep in mind it is a range and don’t assume you will see the top of that range before you make your decision. If you plan on only recouping the lower end of the range, anything higher can come as a pleasant surprise.
A final thought to consider is that certain renovations add features to a home that mean you can attract interest from a buyer who would not have even considered your house before. Many buyers don’t even want to see houses without central air conditioning, and a master bathroom with a shower instead of a bath is not appealing to most women. Renovations such as this may cause offers to show up that may not have otherwise and may even allow you to be in the position of reviewing multiple offers. Make sure you take a hard look at your house and what features it may lack and consider whether renovating to address that is affordable.
Payback Range of Typical Renovations
- Bathroom renovation (75 – 100%)
- Kitchen renovation (75 – 100%)
- Interior painting (50 – 100%)
- Exterior painting (50 – 100%)
- Roof shingle replacement (50 – 80%)
- Furnace/heating system (50 – 80%)
- Basement renovation (50 – 75%)
- Recreation room addition (50 – 75%)
- Installing a fireplace (50 – 75%)
- Flooring (50 – 75%)
- Constructing a garage (50 – 75%)
- Window/door replacement (50 – 75%)
- Building a deck (50 – 75%)
- Central air conditioning (25 – 75%)
Information provided by the Appraisal Institute of Canada, 2006.