The renovation business is booming. Everyone is renovating, which is one of the reasons it’s so tough to find a good contractor.
Magazines and television shows inspire people to renovate. Home-improvement stores are full of great products and offer easy financing and seminars for homeowners. No wonder everyone wants to improve their home—I heard recently that about 10% of Canadian homeowners are planning a home renovation.
Since the average home renovation in this country costs about 15 thousand dollars, there’s a lot of money involved—from contractors and subtrades, to paint, tools, flooring, lumber, hardware, appliances and a ton of other building supplies.
Why Are You Renovating?
Renovations increase the value of your home, but you need to think about why you’re doing it. Is it to improve your home so you can enjoy living in it, to save money by adding energy efficient windows or insulation, or is it to make money?
A lot of people renovate for profit—and this can be a big mistake, because they often spend their budget on things like finishes and decor, and don’t even think about what holds their house together, and keeps it dry, safe and standing.
Is It a Flip?
Some houses are renovated so they can be ‘flipped’ for a profit. I love to renovate houses—I love to help people improve their houses, to make their dreams come true. And I think a lot of flips are crap.
In my experience, a lot of people who do this are only interested in how the project looks—in order to maximize their profit, they do cover ups--lipstick and mascara—and then move on, with a tidy profit, leaving the sucker who bought their house with a big problem. One they might not even know about for years.
Nobody wants their renovation to bring the value of their house down. Obviously you want your house to look good, and later when it comes time to sell it, it’s nice to make a profit. But, if you’re renovating with an eye to selling, make sure you aren’t just covering up problems. Fix what needs to be done right, take care of the basics like plumbing, electrical, HVAC, and insulation. Make the house better than it was when you bought it. Then once you’ve done that, make it look good.
Where Should You Put Your Money?
Kitchen and bathroom improvements increase the value of your house more than most renovations and offer the highest average return on investment.
The kitchen is the heart of a home—people gather and spend a lot of time there, so renovations that improve the kitchen are a good idea. Adding living space—either by finishing an unused basement or putting an addition on your home is the second most popular reason to renovate.
Exterior projects make up almost 40% of renovations and can include jobs like roofing, deck or patio installation, siding, foundation work, landscaping, fencing, garage building, exterior painting, sidewalk or driveway work, and gutters or eavestrough improvements.
With some renovations, you’ll make back what you spend on the upgrades, plus a profit when you go to sell. But that’s assuming the work is done well by a skilled contractor, using quality workmanship and materials. A bad job might reduce the value of your home.
Cosmetic or Practical?
It doesn’t make me happy, but not every renovation you do on your house will give you the same return on investment if you’re doing it to sell. You might replace your roof and windows and fix the foundation—and that’s the right thing to do. Practical renovations are smart and the best to invest in for the long term.
Unfortunately a lot of homebuyers don’t get that excited about these very important points—but a new granite countertop and stainless appliances will impress them every time.
I think that the best reason to renovate your home is to enjoy it. Your home is not just an investment. If you are renovating to sell, use quality materials and hire professional skilled people to do the job right.