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From The Boomer & Echo Mailbag: Renovating For Resale

From the questions we are receiving, it seems that some of our readers are on the move. They want to get the best bang for their buck when selling their residences.

Q. Which home improvements have the highest return on resale value?
Q. We are in the process of selling our “starter” house and moving up to a larger home. What can we do to maximize our sale price?
Q. What is the impact of landscaping and curb appeal on resale/selling prices?

A. How much you spend on improvements should largely depend on how long you plan to live in your home. If you are thinking of selling your home in the near future, it’s useful to consider any remodelling project from a buyer’s perspective.

It’s difficult to imagine spending thousands of dollars on a home-improvement project that will not be reflected in the home’s value when it comes time to sell. But, prospective buyers look at a home very differently than the homeowners do.

Related: Our shocking basement renovation bill

There is no simple equation for determining which projects will garner the highest return. But, a reasonable buyer should appropriately value these improvements:

  1. Kitchen remodel. This is considered by many to be the best boost to your home’s value – upgrade counters, cabinets and appliances, or redesign for efficient work-flow.
  2. Bathroom remodel. Bathrooms are considered the most effective rooms to update. Especially popular are improvements to master ensuites such as large, walk-in showers which have replaced whirlpool tubs as desirable. If your home has only one bathroom, consider adding another one instead of remodelling the existing.
  3. Increased living space. Adding outdoor living space such as a sun room, deck or patio increases the value of your house. Finishing a basement converts it to a functional area that can significantly add to the livable square footage in your home, especially one that can be converted to a suite or accommodate large families.
  4. Landscaping and curb appeal. A buyer gets their first impression from the exterior of your home. Money spent on landscaping can add a significant amount to the resale value of your home, 7 – 15 % of a home’s value according to HGTV’s Carson Arthur. Don’t over-landscape, though. Maintain a green and healthy lawn and neatly trimmed shrubbery. Mature trees can enhance property values 20%.
  5. Other. Hardwood flooring is the most sought after flooring by home buyers. Add more storage – options to consider include built-ins and garage shelving.

Every home owner’s first priority is maintenance. If you’re renovating with an eye to selling, make sure you’re not just covering up problems. Take care of the “boring” basics, especially in an older home – replace an aging roof and siding, update the heating/cooling system, replace windows and doors to be more energy efficient as they near the end of life expectancy.

Related: Singing the home renovation blues

Don’t spend your money on an extensive kitchen remodel when your roof is two layers of shingles and 30 years old. For a buyer, knowing the roof needs to be replaced is a bigger issue than a functional – but dated – kitchen, no matter how awesome the remodel is.

Renovating for resale

If you are selling soon and your renovation budget is limited, try these small projects:

Small budget projects (>$2,000):

  • New fixtures and hardware can have a big impact on the look of a space. Consider upgrading the hardware on bathroom and kitchen cabinets as well as towel racks and faucets. Caulk the tub and re-grout tile. Change the backsplash.
  • Update light fixtures and opt for new window coverings.
  • Changing and refreshing the wall colours can completely transform a space. It’s one of the simplest and most affordable renovations to do. You don’t necessarily have to paint the entire house, just high traffic areas and any brightly painted rooms. Use neutral colours – gray, putty, beige.
  • Nothing drives away would-be-buyers faster than grime and weird smells in a messy home. Take care of minor repairs. Do major decluttering and a thorough cleaning. Consider home staging.

Final thoughts

To appeal to a wider number of prospective buyers, ensure your renovations blend in with the overall style and design or your home. Don’t “over-improve” and price yourself too high for your location. Make sure the cost is in keeping with your neighbourhood or you will not get value.

Ensure workmanship is of good quality and materials are consistent with other homes in the area.

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4 Comments

  1. Laurie on April 29, 2016 at 8:23 am

    The returns in the ‘cost recouped’ table suggest one should not bother with upgrades!

    • boomer on April 29, 2016 at 9:51 am

      @Laurie. In my opinion major upgrades should be more about your own enjoyment rather than trying to recoup all the costs at resale but it depends on your area. In a hot real estate market it could make a lot of difference.

  2. Cool Koshur on April 29, 2016 at 6:33 pm

    If you are selling, your best bet is getting a fresh coat of paint in light neutral color. It gives 100% ROI. It helps you sell your home fast as well.

    I wouldn’t waste money on re modelling the home to prepare it for sale. Each buyer is different and have different taste. My 2 cents

  3. Peter Crisp on April 29, 2016 at 8:38 pm

    It’s very interesting to me that so many ‘flippers’ are out there. I know that many are successful, but I think it’s like Vegas – no one ever boasts about their losses and they always seem to work in rising markets – where you see a boost just by waiting.

    My own view is a mix – home renovations should be about enjoyment, but there are some cases where a flipper can add real value by increasing the functionality of a home beyond what most people want to take on – so the market of interested buyers for the house is larger. But you really have to know what you are doing in that game. If the TV shows were right, we’d all be ripping our houses apart because we’d gain instant equity – and I just don’t buy it.

    I’m not counting single-family or multi-family income properties in these comments – there, you can gain by reducing costs or increasing rents and you can’t do this in a flip.

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