Home Renovation Tips for Homeowners: Adding Value to Your Home
“Fix it up and Flip it” has become a popular household phrase in the recent boom of DIY and home renovation programs. However, the phrase has always been relevant in real estate investing.
The idea behind the phrase is that by completing a few remodeling projects the value of a home will increase significantly. Keeping this in mind, many homeowners take on major renovation projects based on their personal beliefs and preferences and expect these projects to return large value on their investment. The reality is many of these upgrade fail to add the expected value and most of the time fail to pay for themselves.
Read on to discover strategic renovations proven to add value to your investment.
Investors vs. Owners
If you are investing in real estate, chances are you already have a sound strategy for which remodeling projects have the highest return on investment, for the least amount of effort and cost. You also know that in order to appeal to a variety of potential buyers you have to be very careful not to over improve the home and somewhat simple when selecting your decor; you know you are trying to appeal to more than one potential buyer and you don’t want to price the home over the neighbourhood.
Owners, on the other hand tend to take a much less strategic and a more personal approach when fixing up their home to sell it. This can result in the home appealing to less potential buyers and leaving them losing money on their investment.
To help guide your renovation decisions here are 4 tips to consider when renovating your home, regardless of if you plan to stay for while and sell or to fix it up and sell quickly.
1. Common-Sense items
These are basic items that buyers expect when they purchase a home. Some examples include: a solid foundation and structure, a dry basement, a roof that doesn’t leak, eavestroughs and downspouts that drain, fresh paint job, and a good, working furnace.
Adding these items to a home that lacks them won’t add value; but it will bring the property up to the standard level of the rest of the homes in the neighbourhood. Money spent on these items is unlikely to be fully recovered, but should at least result in ensuring that the home sells for a price that is comparable to other homes in the area.
2. Curb Appeal
This is the aesthetic charm of a house when first seen from the road. It is the first impression potential buyers will have when coming to see your home. Much like the common sense items, projects such as a nicely maintained lawn and an appealing landscape may not add considerable monetary value, they will certainly help the property sell faster, and it won’t give the potential buyers any ammunition when looking to negotiate the price.
Much like a nicely staged house and a fresh baked apple pie, positive curb appeal will make potential buyers immediately comfortable and interested in your home.
3. Major Projects That Have Resale Value
If you are looking to invest money outside of the first 2 tips into your property, the remodeling projects that offer the most return on their investment are: kitchens, bathrooms, new windows, decks and additions to the living space.
According to the Appraisal Institute of Canada, kitchen and bathroom renovations are guaranteed a return of 75 to 100 percent on your investment when you sell your house.
4. Personal Preference
These are the projects that you may enjoy are considered essential to a home, but this is where you have to realize that amenities such as swimming pools, hot tubs, wine cellars, exotic hardwood floors and tile, ponds and game rooms may not appeal to certain buyers. There is no harm in adding such items, but don’t expect the majority of buyers to pay a premium for them.