Where does your renovation dollar give the best return in terms of payback? Consider these figures:
|Average potential payback for renovations when a house is sold|
|Main floor, family room addition||55%|
|Central air conditioning||52%|
|New heating system||50%|
|Finishing the basement||49%|
|Energy efficient features||33%|
As the above figures show, the renovation dollar with the most smarts is usually spent in the kitchen or the bathroom. Keep in mind that the average potential buyer will be more concerned with the state of the kitchen than any other room. A home that boasts a bright, clean and functional kitchen will be a home that sells well.
The next most important room is the bathroom. Even simple and inexpensive renovations can work wonders for resale value. Common wisdom dictates that a kitchen should be renovated if it is older than 20 years. Likewise, a bathroom should be renovated if it is older than 40 years.
Now lets take a look at renovations that offer little (or sometimes negative) payback value:
- Pools and spas
- An improperly executed renovation
- renovations in small homes that are overly luxurious
If you are thinking about selling your house and are concerned about how your renovation plans will affect the resale value of your home, arrange a free consultation with a Coldwell Banker Rhodes & Company Sales Representatives.
Ten Steps to Successful Renovation:
Renovating your home is an exciting and rewarding process. Whether you are making modest changes in one or two rooms, or you are transforming the entire house into the dream of a lifetime, the process can be pleasant and smooth, if you take the time to plan your project carefully.
Professional renovators suggest that homeowners are well on their way to a successful renovation if they follow the ten steps outlined below.
- Do your homework: Advance research is the key to getting what you really want. Study magazines and books to get an idea of the “look” you want. Visit home shows and display rooms to find out what products are available.
- Find out how much you can afford: Once you have a firm idea of the kind of renovation you would like to undertake, it is time to decide how you are going to pay for it. Discuss your borrowing needs and options with your lender. There are many financing possibilities to consider, from personal loans and line of credit to home equity loans and homeowner’s mortgages.
- Look for a professional renovator: For appropriate services and high-quality results, hire a professional renovator. Call the Ottawa-Carleton Home Builders’ Association for a list of member-renovators in your area. Ask a local building supply store to suggest a good renovator, or visit home shows to meet the professionals in your community.
- Get estimates: Get two or three different bids; more are usually not required. Make sure that you provide all the renovators with the same detailed information. It is important that they bid on the same job, or you will not be able to compare estimates. For estimates involving major structural changes, such as additions or moving walls, renovators may also need a set of plans that includes site and floor plans, elevations, and detail drawings.Be honest and open about your budget. The renovator will be able to make suggestions that will help you stay within your budget or provide alternative ideas to stretch your dollars further.
- Check references: Don’t omit this step just because your are too busy or “he/she seems like the right person for the job”. Call the Ottawa-Carleton Home Builders’ Association, previous clients, the Better Business Bureau, the bank and the building supply store to ensure that you are, in fact, making the right choice.
- Work out a contract: Don’t automatically take the lowest bid, unless you are certain that the renovator has properly understood what you want. Sometimes low bids turn out to be the most expensive in the end.If you accept the renovator’s offer, make sure a written contract is prepared. Even the simplest of jobs should be outlined in writing. The contract is the basis of understanding between you and your renovator.
- Plan how you will live during the renovation: Careful planning can greatly minimize the inconvenience of living in the midst of renovation. Talk to your renovator about the schedule of work to be done and how your daily routine might be affected. Discuss your expectations of the work crew and determine the work environment. The crew needs access to washroom facilities, telephones, water and electricity. Decide which areas of the house are off limits.
- Establish a good working relationship with your renovator: Renovators and homeowners agree that a good working relationship is a vital ingredient in successful renovation projects. Mutual trust is essential. Keep lines of communication open at all times. Expect a brief report on the progress of your job at regular intervals, if not every evening. Be available to make decisions when they are needed so work is not held up. Don’t hesitate to bring your concerns to the attention of the renovator.
- Try to stick with your first choices: Once work is underway, changes should be kept to a minimum. The details of your project, described in the contract, down to the finishing touches, forms the basis of both the price and the scheduling of your job. Changes could affect both significantly.
- Be prepared to enjoy the results: Research, good planning, a professional work crew and open communication and trust…a recipe for renovation that you will enjoy for years to come!
1 Data source: Ontario Association Appraisal Institute of Canada
2 Source: Ottawa-Carleton Home Builders’ Association