7 Home Renovations That Add the Most Value | Plus 2 That Won’t
Planning to renovate your home?
As a homeowner or real estate investor, you should always budget the costs and benefits before starting any home renovation or replacement project.
While most home improvements add value to your home, some renovations can actually decrease your resale value.
To help you get the most bang for your buck, this article shows you the top 7 home renos to increase your home value - and 2 that you might want to avoid.
Home Renovations That Add Serious Value
1. Replace Your Doors
Replacing your doors is one of the easiest ways to add value to your home.
When a guest arrives at your house, the first thing they look at is probably going to be your front door.
As the main point of entry, our eyes are naturally drawn towards doors, so they make an important first impression.
A new door gives your home more “curb appeal,” which refers to how attractive your property is to potential buyers from your sidewalk.
Good doors also keep your house well insulated from outside temperature changes and make your home safer against intruders.
Garage door replacement
Replacing the garage door will cost around $4,600 and is the best bang for your buck home improvement you can possibly make. You can expect to recover over 97.5% of your initial investment after a garage door replacement.
If you want the latest technology everywhere in your house, smart garage systems integrate with apps like myQ to show you if the garage door is open or closed.
Front door replacement
According to the data, upgrading your main entry door should cost between $1,500 to $2,000 and is considered one of the top ways to spend your renovation money. You’ll recoup around 78 - 83% of the cost when you sell.
On top of that, new doors are well insulated and help reduce your home’s energy footprint. If your door is still new, consider a fresh coat of paint or varnish instead.
2. Minor Kitchen Remodel - A Home Improvement You’ll Use Everyday
As the source of food, drinks, and often entertainment, a kitchen remodel is one of the best possible upgrades for your house - especially if you can’t stand your kitchen today.
You recoup most of your renovation budget when you sell and in the meantime, you get to enjoy using your brand new kitchen.
Minor kitchen remodelling includes things like adding a tile backsplash, upgrading your sink, resurfacing cabinets, and adding new knobs & drawer pulls. This can cost anywhere from $10,000 to $20,000, depending on the size of your kitchen.
Major kitchen remodelling includes upgrading almost everything: kitchen appliances, new state-of-the-art cooking surfaces, lighting fixtures, wood cabinetry, quartz countertops, veneer, and everything mentioned above. This can cost between $50,000 to $70,000.
If you’re planning to sell, pick designs that are not overly bold or tacky - you don’t want your kitchen remodel to scare off any potential buyers and lower the resale value of your home.
Return on Investment
The famous home renovation expert and TV personality “Mike Holmes” suggests you can recoup up to 80% of the cost of a kitchen upgrade worth $20,000 to $50,000, making it one of the highest return home improvement projects.
According to a 2018 study of Canadian homeowners by Royal LePage, kitchen remodeling can increase home value by over 12.5%, which translates into a $100,000 increase in your resale price for a home worth $800,000.
3. Bathroom Remodel
There are a lot of good reasons to remodel your bathroom space. First of all, bathrooms that are showing serious wear and tear might scare off some buyers completely. Secondly, you’re going to use it every day - and you deserve a bathroom that’s worth coming home to. Besides the aesthetics, upgrading older bathrooms with poor ventilation can improve air quality and help eliminate mold - especially if you live in a humid climate. Third, remodelling old bathrooms is also one of the best home renovation projects to add resale value to your house, and doesn’t have to cost a ton of money.
Depending on what you replace, bathroom remodels can cost anywhere from $5,000 for a cosmetic makeover to $40,000 for a full remodel. The major expenses are replacing the sink, bathtub, shower, and toilet. If your plumbing fixtures are already in good shape, consider updating the wood cabinetry, paint, tiling, countertops, mirror, and towel racks.
We recommend avoiding overly bold design choices which can be off putting for some home buyers and real estate investors.
Return on Investment
The average cost of a bathroom remodel is around $10,000, and is said to increase home value by 2.5% to 12.5% - this adds up to a lot of money when home buyers come knocking.
4. Finished Basement
If you have an unfinished basement that’s acting as a below ground storage space, renovating it is one of the most valuable house improvements in the eyes of potential buyers. For minor projects, drywall, vinyl, paint, and light fixtures might be all that’s required. One of the best parts about remodeling an unfinished basement is you can turn it into almost anything you want: a living room, entertainment room, office, exercise room, or a separate rental suite to appeal to investors seeking dollar value by square footage.
Return on Investment
If you remodel a 1,000 square foot basement and install new flooring, you can expect an average cost of $15,000. Some experts suggest you can recover around 70 percent of the costs of a basement upgrade project.
Surveys in Canada estimate that a finished basement can increase home value by 2.5% to 12.5% ($20,000 to $100,000 for an $800,000 home).
5. Insulation & Eco Upgrades - Instant Return on Investment
Energy-intensive heating and cooling systems create one of the biggest ongoing expenses for homeowners. The looming threat of global warming and its associated carbon taxes means we can all expect to see higher power prices over the next decade.
If you care about saving money in the long run, projects that optimize your building envelope are crucial upgrades - especially if you live in an older home.
Your building envelope refers to every piece of building material separating your interior from the outside elements. This includes your windows, doors, exterior walls, vinyl siding, paint, foundation material, and roofing. Improving your building envelope with effective insulation is one of the best projects to increase your home value because you’ll start saving money on your utility bill right away.
This can include roof replacement or new roof material, new attic fill, vinyl siding, fiber cement siding, and improving sealing around vents, doors, light fixtures, & windows.
Windows are one of the biggest contributors to a home’s temperature loss. Most windows lose about 10 to 20 times more heat compared to a section of exterior wall that’s the same size. New window technologies like electrochromic and thermochromic help you save energy by automatically darkening your windows when the sun gets stronger.
HVAC & Water Heating
Your water heater and HVAC system (furnace & air conditioner) contribute to more than half of your home’s total energy use. Modern appliances and HVAC systems and appliances can save you anywhere from 20 to 50% on electricity compared to running equipment built in the 1970s.
Upgrading your energy recovery ventilator system (ERV) is another great way to lower your utility bill in the long run, while smart home technologies like thermostat controls and smart lighting help you use less energy while you’re away from home or sleeping.
Return on Investment
Your investment into energy efficient upgrades starts to pay off as soon as you get your next utility bill, but you can expect your home selling price to increase by less than 10 percent.
If you’re eligible, you can recoup some of your expenses using programs like the Canada Greener Homes Grant for energy efficient and smart home upgrades.
6. Outdoor Deck
An outdoor deck is an excellent renovation project if it is designed properly, well built, and doesn’t take up all of your yard space. You’ll get a fresh new outdoor space for entertaining, cooking, or relaxing in the sun.
If you already have a deck, a new layer of paint or a fresh stain improves aesthetics and makes it more durable against the elements.
In Canada, building a cedar wood deck costs between $60 to $85 per square foot.
A 20x20 foot design should cost between $8,000 to $16,000, but you’ll also need to budget some funds for outdoor patio furniture, a lighting install, and a patio heater or gas fire pit.
If you build a great deck costing around $10,000, Bob Vila suggests you can recover about 76% of costs, but according to the Royal Lepage survey, they add less than 2.5% to a home's average price.
7. Manufactured Stone Veneer (Maybe)
Manufactured stone veneer (MSV) is a composite material made of cement and natural aggregates. According to remodeling magazine’s 2019 cost vs value report, MSV is one of the top ways to add value to a property. It costs between $6 to $9 per square foot and lasts anywhere from 20 to 75 years.
We list this as a “maybe” because home trends change over time. If you remember that bottle-dash stucco was once in vogue for BC home exteriors, you should also consider that homeowners might not like MSV in 10 years.
If you’re planning to sell fast, stone veneer is definitely on trend for 2021 to 2022, - but keep in mind that jagged rock edges might not be suitable for buyers with small children.
Return on Investment
Remodeling magazine suggests you can recoup 92.1% of the cost of MSV, making this one of the most valuable renovations on our list.
Home Renovations That Don’t Always Add Value to Your Home
1. Swimming Pools
There are a lot of great reasons to own a pool, but not all potential homebuyers want a pool.
This may seem counterintuitive in the Okanagan, but the ongoing costs and liabilities of owning a pool can really add up.
You’ll either be paying a pool professional or doing a lot of hard work to keep your home pool equipment in working order.
You’ll purchase chemicals like chlorine on a routine basis, replace your vinyl pool liner every 10 years for $5,000, and get a new solar pool cover every few years for $400.
If you own a pool in Canada, you’ll also spend more money on home insurance. Annual pool costs can be up to $4,000 dollars.
Owning a pool also restricts how you can use your yard. In British Columbia, Canada, you must have a protective fence or controlled access barrier around your pool or yard to, “restrict access, minimize contamination of water by foreign materials, and reduce the risk of drowning, especially for young children(1),”
If there are ever any diving or swimming accidents in your pool, you may have some legal liability to deal with.
The average cost of a new inground swimming pool is between $40,000 and $70,000, but you’ll only get up to a 2.5% increase in home value and recover up to 25% of the costs when you sell.
Unless you love your pool and plan to use it for many summers to come, there are probably better ways to invest your budget.
2. The Sunroom
According to several sources like Remodeling Magazine, the Sunroom is the absolute worst way to spend your money and might actually lower your curb appeal.
If you build a sunroom with floor-to-ceiling windows, you also diminish your home’s heat envelope and end up paying more for heating & cooling in the long run.
Hardcore horticulturalists might swoon over a sunroom, but most buyers will see it as a window-washing chore and a waste of precious square footage that could be a bedroom, office, or living room space.
When you sell your home with a sunroom, which can cost up to $500 per square foot, you can expect an average cost recovery of 45 - 50%.
If you’re concerned with real estate return on investment and impressing home buyers, these are the most valuable home renovation and remodeling projects:
Minor kitchen remodel
Basement remodeling projects
Energy efficient building insulation, appliances, & smart home upgrades
Outdoor deck space
Manufactured stone veneer
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