- First attend to Maintenance and Repairs.
Buyers expect a home with solid structure and systems.
Doing a kitchen remodel when your roof is leaking is like getting a face lift when you’re needing a heart by-pass operation.
- Avoid becoming the nicest house on the block. If the value of your house exceeds the average market value in your neighbourhood, your renovations will not yield much return. But if your house value is similar to the average, you can recover a larger part of the renovation costs.
- Pay attention to your neighbourhood norms. e.g. don’t expect to get a good return on granite countertops in a neighbourhood where the norm is plastic laminate counters.
- The amount spent on renovation projects should be relative to the value of the dwelling.
- Lifestyle renovations like a swimming pool, wine cellar, sauna etc can be “gilding the lily” and overbuilding. These fare the worst from a return-on-investment point of view and may be seen as a liability by some buyers.
- Renovations are unlikely to deliver a dollar-for-dollar return on investment. You need to balance your family’s enjoyment of the home with your desire to make a wise investment decision.
The greatest return on investment is painting and decoration because they appeal to people’s emotions and home buying is a very emotional thing.
Top 5 Renovations Average Return on Investment
1. Painting and decorating 73%
2. Kitchen renovations 72%
3. Bathroom renovations 68%
4. Exterior painting 65%
5. Flooring upgrades 62%