Not All Renos Have A Positive ROI

Home RenovationsHomeowners plan renovations for different reasons. Sometimes it’s because they’ve seen a friend’s new kitchen or something on a design show that sparked their imagination. Other times it could start with a repair that turns into a complete makeover. But by the time the renovation is finished, most homeowners will want to know how much that reno has increased the value of their home.

But value is a tricky subject. Let me give you a scenario: A homeowner decides to renovate their bathroom. They want the kind of bathroom that would be in a million-dollar home — but their house is actually worth closer to $500,000. The bathroom ends up costing $40,000. Has the value of the house increased by $40,000. No. At most, probably just $15,000. Click here to view the full article.

 

Many renovations cost more than the value they add to the home. The classic example is an outdoor pool. At best, the effect of a pool on value is neutral (i.e., it adds no value), and many buyers just see it as a costly fill-in project. For someone planning to sell their home, it’s even more important to pay attention to the value that’s being added versus the cost of the improvement. The biggest returns come from: fixing anything that’s broken; repainting in neutral colours; improving the “curb appeal”; staging the home professionally; and, in general, looking for low cost improvements that have a big impact on appearance, especially in the kitchen & bathrooms.