Thinking about renovating? Here are some improvements that could increase the value of your home.
Buying your home was a big investment. Depending on the work you have in mind, you’ll probably end up spending a little (or a lot) more money. To make your investment worthwhile, it’s best to put your money where it’s needed most, while considering the impact your improvements will have on your home’s value.
A few questions to ask yourself before you begin
Careful planning, a realistic budget and, above all, a great deal of patience are some of the key elements of a successful project. You need to take the time to clearly identify your needs as well. Answering the questions below will help you understand the reasons why you are renovating.
- Are you planning on owning your home and enjoying the renovations for years to come?
- Or are you thinking shorter term? Do you intend to sell your home in the not-too-distant future? If so, more neutral renovations might appeal to a wider range of tastes.
- Do you know how much the other houses in your neighbourhood are worth? If you’re planning to fix up your house in order to sell it, there’s no need to do too much. It’s important to consider the other properties in your area, because an expensive project could work against you. For example, in a market where property values rarely exceed $200,000, spending $65,000 on your basement may not get you the best return on your investment, according to the Appraisal Institute of Canada.1
Most profitable renovations
Whatever your reasons for renovating, you gain the most by aiming for maximum payback. So here are the most profitable improvements you could make in each case, according to the Appraisal Institute of Canada:1
Be sure to get the proper permits and deal only with professionals
Before you start, check with city officials if the work you are planning requires a building permit. You will need one for major work, such as adding a room, changing inside walls or installing an in-ground pool, whereas changing kitchen cupboards, for instance, does not usually require a permit.3 Always hire professionals who are qualified in the type of work you are doing.
Notify your broker
Regardless of your renovation project, it is important you tell your insurance broker about it. Your broker can check whether you still have the right coverage, and if the amount of your insurance still reflects the actual value of your home post-renovation. Your insurance premium might vary based on the improvements you’ve made. Some renovations might even result in a lower premium, e.g., having your roof redone, in certain cases.
To find out more, talk to your broker. He is your best advisor.
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