Renovations Which Have a Big Payoff
According to the Appraisal Institute of Canada (AIC), the top four renovations with the highest return on investment (ROI) include:
· Updated kitchen - the kitchen provides the best return on renovation investments. Make sure that the project is appropriate and fits in with style and quality of the rest of the neighbourhood.
· Updated bathroom - bathroom renovations are second best when it comes to boosting value.
· Fresh paint – a coat of paint maybe all that it takes. This has an excellent payback and it’s almost always worthwhile.
· Trim, Finishes and decor - updating lighting and plumbing fixtures, counter tops, and replacing worn flooring or refinishing hardwood floors are worthwhile.
According to the AIC, it is important to remember to maintain the house. This means repairing or replacing the roof, updating heating/cooling systems and replacing the windows/doors when required.
The AIC also lists finishing the basement, garage improvements, sun rooms and other additions, decks and fences, and landscaping as the top renovations that generally offer the highest enjoyment value.
It is noteworthy that this applies most of the time and in most circumstances. However, there are a good deal of exceptions, and if you fall within one of the exceptions this can cost hundreds of thousands of dollars. This might just be money down the drain.
The AIC plan works in a new suburb in the 905 area, provided you have a regular house on a regular lot.
It may not apply at all in certain areas in the 416. Here, the land prices have increased exponentially.
So, what do we have in the 416? Little houses, built just after the Second World War, sometimes earlier, on big lots. The lot value exceeds the combination value of the building plus the lot. The building has in fact become a liability.
The prospective purchaser is either a Builder or a Buyer who wants to build. They are not interested at all, in your recent $100,000.00 in improvements.
In fact, you can take them with you if you wish. And, the rest of the house while you’re at it.
Brian Madigan LL.B., Broker