There’s no denying that home renovations can increase the value of your home. According to the Canadian Home Renovation Survey a kitchen or bathroom renovation can be expected to nearly double the amount you invest. $10,000 spent will increase your home’s value by $17,500 – $20,000. To look at another example, for every $1.00 you spend to paint, inside or out, expect to get $1.50 – $2.00 back.
Bathroom renovation 75-100%
Kitchen renovation 75-100%
Interior painting 50-100%
Exterior painting 50-100%
Roof shingle replacement 50-80%
Furnace/heating system 50-80%
Basement renovation 50-75%
Recreation room addition 50-75%
Installing a fireplace 50-75%
Constructing a garage 50-75%
Window/door replacement 50-75%
Building a deck 50-75%
Central air conditioning 25-75%
Interlocking paving 25-50%
Building a fence 25-50%
Asphalt paving 20-50%
Adding a swimming pool 10-40%
Installing a skylight 0-25%
The survey listed the top 20 most-frequently performed renovation projects, along with the expected return each. (See table.) It’s clear that renovating adds value.
However, the survey warns that expected returns are dependent on many factors such as property location and quality of workmanship. Ill-conceived or poorly built renovations can actually decrease a home’s value.
The Value of Housing Characteristics report by the National Assocation of Realtors in the USA, shows that an above-ground swimming pool or basement laundry fall into this category of “features that can decrease value”.
If you’re looking to increase the value of your home via renovation before selling, experts suggest following a few common-sense guidelines.
Build for good returns. Sticking with the projects that are most likely to increase your investment gives you a good margin of safety in case things don’t go as planned. When in doubt, leave it out.
Build to similar quality as the rest of your home and the homes surrounding it. Improvements that are “over-built” will not realize full value.
Build for your location. Don’t add air conditioning if you only need it for 2 days in August.
Renovation and Home Purchase Report (CMHC 2012)