How cost-effective renos can increase the value of your house

Renovating is expensive, and getting more expensive by the day, with soaring building material costs. But all is not lost: renos generally boost property values. Here are some tips from the Appraisal Institute of Canada on how to turn your renos into a worthwhile investment.
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Create a roadmap

Although your kitchen countertop has been embarrassing you for ages, you can't embark on any major reno without a minimum of planning, brainstorming, evaluation, guidance, tests, verification, and so on. Let’s face it – there are no shortcuts.

Get an accurate estimate of your house’s value

Get a qualified appraiser to give you an independent and impartial estimate of your house’s current market value.

Checking the selling price of similar properties in your neighbourhood will give you a good idea of how much potential buyers are willing to pay for the same type of residence in the same area.

The appraiser may also analyze previous transactions or expand their search to other neighbourhoods if there are no good current “comparables.” These qualified professionals have access to data that helps them accurately estimate property values.

Renos = needs

This key equation is easy to unpack. Here are a few questions to help you determine the real reasons why you're renovating.

When do you want to sell your house?

If the answer is quite soon, there’s no need to go overboard. It’s better to do neutral renovations that are more likely to suit the tastes of most buyers.

What’s your reno budget?

Here again it's a question of time: if you plan to live in your house for many years, you can undertake major renos. On the other hand, small improvements will still make a big difference if you’re thinking of selling in the short term.

You also need to avoid overdoing things to prevent being out of step with the rest of the neighbourhood. Remember: property values are based on neighbourhood comparables. If you spend more than $70,000 to renovate your basement, but your house is in a neighbourhood where property values typically don't exceed $225,000, you're not going to recoup all that value when you sell.

How free are you to coordinate the work?

Avoid busy personal and professional times like children going back to school, new work responsibilities, the birth of a baby, etc. Schedule the work for warm weather, when you can open windows for ventilation because some carpentry chemicals have nasty smells. For major renos, you’ll also have to co-ordinate with the contractor’s availability.

Opt for the most cost-effective renos

It’s not advisable to skimp on reno quality. If you have a tight budget, focus on smaller, less expensive jobs like painting, lighting, landscaping, and replacing door handles and countertops. Use professionals for the best advice and quality  work within your budget.

According to the Appraisal Institute of Canada, the most cost-effective improvements are:

To increase the appeal of your property and potentially its sale price:

  1. Renovate the kitchen
  2. Renovate the bathroom
  3. Repaint the house interior and exterior
  4. Update the decor (e.g., lighting, plumbing accessories, floors, etc.)
  5. De-clutter spaces as much as possible

To maintain the value of your property and save money:

  1. Replace the roof
  2. Upgrade heating and cooling systems
  3. Replace windows and doors
  4. Upgrade the electrical fittings (panel, wiring, outlets, lighting fixtures)
  5. Repair structural defects
  6. Consider energy-efficient renos for more cost savings
  7. Periodically maintain the property

To get the most out of the improvements, the following features add value that can influence a buyer's choice between two similarly-priced houses:

  1. Finished basement
  2. Garage
  3. Solariums or extensions 
  4. Patio or fence
  5. Landscaping

Renovate according to regulations and use professionals

To avoid unpleasant surprises, check with your municipality to see if the proposed work requires a building permit. Major renovations like adding a room, moving interior walls or installing an in-ground pool require a permit. However, replacing kitchen cabinets, for example, usually doesn’t require one. And to ensure the work is done properly, always use qualified professionals.

Notify your insurance representative before beginning the work

This is essential for at least three reasons! First, your representative will make sure your coverage is still adequate based on the current value of your home. Second, they will adjust your insurance policy based on any new additions like a swimming pool, a garage, a room or an extension. They might even lower your home insurance premium because you had work done on the roof or installed an alarm system.

This website provides general information only. Your insurance policy contract takes precedence at all times.

Protect your renos with the right home insurance!

Get a quote

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