I want to renovate my home! How much return will I get on my investment?

February 13, 2008 · 9 comments

It seems that nowadays everyone wants to upgrade their home. With the recent advent of home flipping shows and renovating TV specials, homeowners are looking to add some value to their homes by investing a little money and a little labour. It also helps that Brampton has two brand new Lowes stores in addition to the existing Home Depot and Rona warehouses. It almost seems too easy to venture a few steps and bring home some building supplies!

The Brampton real estate market is an accurate image of the Canadian real estate market. According to surveys, nearly two thirds of homeowners intend to undertake renovation projects this year alone! If you’re looking to make some additions or changes to your home, you’re probably wondering what you can do to get the most back when you sell your home. Well, below is a general guide to how much you can expect to get back on your renovation investments. Refurbished kitchens and bathrooms are still the best intermediate investments, while a fresh coat of paint is still the most inexpensive way to boost the value of your home.

This list is only a guide! Consult experts if you intend on making renovations and do your homework.

Installation of hardwood floors – 50% to 80% return
Interior painting – 50% to 100% return
Roof replacement – 50% to 80% return
Additional room (ie. family room) – 50% to 75% return
Skylights – 0% to 25% return
Kitchen upgrade – 75% to 100% return
Doors and windows – 50% to 75% return
Wood fence – 25% to 50% return
Pool – 10% to 40% return
Deck – 50% to 75% return
Fireplace (wood or gas) – 50% to 75% return
Central air conditioning – 50% to 75% return
Landscaping – 25% to 50 % return
Replace furnace or heating system – 50% to 80% return
Finished basement – 50% to 75% return
Bathroom upgrade – 75% to 100% return
Asphalt driveway – 20% to 50% return
Interlocking stone driveway – 25% to 50% return

There you have it. Keep in mind that any renovations you do undertake should be relative to the value of the home. It wouldn’t make any sense to add a $30,000 kitchen to a $100,000 home. Also, avoid projects that will set your house apart from other properties in your neighbourhood. The Appraisal Institute of Canada warns that: “If the value of your house exceeds the average market value in your neighbourhood, your renovations will not yield much return. But if your house value is below the average, you can recover a larger part of the renovation costs.”

Happy renovating!

Tagged as: bathroom, brampton, buy, condo, hardwood, home, kitchen, real Estate, renovate, sell, tiles

This post has 9 comments

Tania
We bought our house almost 2 years ago for $385,000 and are considering a kitchen renovation. We've been quoted at $45,000 for the reno that we want and are curious what percentage of the overall home value we should invest in a kitchen renovation?

lang
Hi Misty Washrooms are actually quite important in terms of the presentation of the home. If you don't mind, email me about the neighbourhood your house is in, and I can try to tell you more. It's difficult for me to answer your questions without knowing a little bit more about the neighbourhood. Cheers, Lang

{ 9 comments… read them below or add one }

1 Lake Blue Ridge Homes For Sale February 14, 2008 at 6:34 am: What a great list I have never seen a list like this but I will use it for a reference. How does the saying go if you own the worst house on the block okay to invest in upgrades. If you own the best house on the block do not invest in upgrades unless you plan to live there forever and don’t expect a return on your investment.

I love the list though very helpful!
2 Blue Ridge Georgia Cabin Rentals February 15, 2008 at 8:24 am: I think adding new wood floors along with a kitchen and bath upgrade are the three most important upgrades that will show your return when you go to sell and will have your proud to enter your home and enjoy with friends and family.

The wood floors open up a place and give a look of elegance. The remodel kitchen brings it up to current appeal with granite. People want retreat bathrooms with marble tiles and glass shower surrounds and tubs. Even if the other rooms are small in house these three alone will make the house look new.
3 Real Estate In North Georgia Mountains February 20, 2008 at 7:55 am: It would make sense to get a CMA current market analysis of the property and comparables in the area as to make an informed decision to renovate and how much to invest to recoup at time of sale. The list is a wonderful guide to a renovating project and can be the basis for a projected investment.
4 Replacement Windows Tacoma December 16, 2008 at 12:22 am: Nice, very in-depth guide!
5 Stan January 31, 2009 at 5:07 pm: average in my neighborhood is 265000 without a basement,would a basement apartment with it’s own heating system and kitchen an laundry room an high speed internet recessed lights an a large full bartroom add how much value?
6 lang February 3, 2009 at 3:46 pm: Hi Stan

Of course, any additions and renovations to a home will add some value to the home. However, the average price in your neighbourhood can be influenced by many things, including the type and the extent of the renovations, the activity level in the neighbourhood, the activity level in the marketplace, the inventory, and many other factors. If you’re thinking of selling and would like to determine a more precise value on your home, let me know and I will be glad to help.

Lang
7 Misty July 15, 2009 at 8:39 am: We bought our house last yearfor $215,000. It was listed for $245,000 but needed some major rennovations. The city office had it listed at a value of $295,000. The pool was unusable and in need of new concrete and tiles and the kitchen was a disaster. It was carpet wall to wall. So we fixed the pool @ $11,000. The we put in a custom kitchen with beautiful cabinets, a built in pantry, wood floors, stainless steel appliances, quartz countertops and a custom island. The island has quartz also. We also put new wood in the butlers pantry/utility room that is just off of the kitchen and new wood in the den. The kitchen was about $50,000 and the wood floors were $6,000. We ripped all of the carpet up in the rest of the house because it there was original hardwood beneath it. The next step is to paint. My trouble is this… While we have done all of this work the 2 of the 3.5 baths are original and ugly. They are totally functional just ugly tile. We really can’t afford to invest much more than paint now. We want to sell it but need to sell it for at least $335-$350. We don’t have to but if we could then we could buy another house that is cheaper and pretty much be debt free. Do you think that return is unrealistic?
8 lang July 20, 2009 at 2:10 pm: Hi Misty

Washrooms are actually quite important in terms of the presentation of the home. If you don’t mind, email me about the neighbourhood your house is in, and I can try to tell you more. It’s difficult for me to answer your questions without knowing a little bit more about the neighbourhood.

Cheers,

Lang
9 Tania September 16, 2009 at 5:04 pm: We bought our house almost 2 years ago for $385,000 and are considering a kitchen renovation. We’ve been quoted at $45,000 for the reno that we want and are curious what percentage of the overall home value we should invest in a kitchen renovation?