Planning to renovate your home?
Here’s what you need to know to maximize your return on investment.
If you’re working on a home improvement project – whether for you to enjoy, or in preparation to put your property on the market – you may be interested to know which reno’s will give you the most bang for your buck.
A kitchen renovation is the most worthwhile home improvement, and has the potential to increase the value of your property by 20%, according to a recent survey of Royal LePage experts.
“A kitchen is perceived as the gathering place and the heart of the home,” said Mike Heddle, Broker and team leader, Royal LePage State Realty. “When a potential buyer views a home for the first time, the one thing that will stand out – for better or worse – is what the kitchen looked and felt like. They may not remember the size of the bedrooms or the colour of the walls, but they will remember the kitchen.”
Highlights from the national release:
- Royal LePage professionals say, on average, bathroom renovations can increase the value of a home by 16%
- Finished basements and basement apartments have the potential to increase a home’s value by 15%, according to survey results
- Outdoor entertaining space and landscaping have the potential to increase a property’s value by an average of 10%, according to respondents
- For Canadians looking for general guidance on where to invest in their home renovation projects, 87% of surveyed experts recommend interior renovations
“During the pandemic, many Canadian homeowners used built-up savings to make improvements to their homes. Whether it’s a new kitchen or upgrading your outdoor space, home renovations are a worthwhile investment, as you and your family will enjoy the new space, in addition to the potential increase to the overall property value.”
Exterior projects such as an outdoor entertaining space or landscaping have the potential to increase a property’s value by an average of 10 per cent.
The survey showed that basement renovations ranked third (finished basement) and fourth (basement apartment). Royal LePage experts say that finished basements and basement apartments have the potential to increase a home’s value by an average of 15 per cent.
“In today’s market, investing in a basement apartment can greatly increase the value of a home, largely because it can help offset mortgage costs with a rental unit, or appeal to newcomers looking for multi generational homes,” said Heddle. “Since the onset of the pandemic, we are also noticing senior homeowners looking at multi generational opportunities to live under the same roof. Having an additional fully livable unit allows for more privacy for those families.”
According to survey respondents, window replacements can increase the value of a home by 13 per cent, and interior painting can increase the value of a home by 12 per cent, on average.
“While updating the kitchen or a bathroom can increase your sales price more significantly, minor upgrades such as interior painting can be a simple and cost-effective option to increase the value of the home.”
For Canadians looking for general guidance on where to invest in their home renovation projects, the vast majority of surveyed experts (87%) recommend interior renovations.
The majority of surveyed experts (59%) say that prospective sellers have been less inclined to renovate their homes prior to listing since the onset of the pandemic, due to sustained seller’s market conditions. Additionally, 57 per cent say that sellers may choose not to renovate, due to recent increases in the cost of construction materials and labour.
“Properties that are turnkey with modern finishes spend less time on the market,” said Heddle. “However, the time frame and logistics for delivery of goods and materials may be a deterrent for many sellers, especially with the rising costs associated with renovation projects.”
Investing in a pool is considered the least worthwhile renovation to increase a property’s value. According to the survey, a pool can increase a home’s value by an average of only six per cent.
Royal LePage Survey: Home Renovation ROI – Data chart: royal-lepage-survey_home-renovation-roi-2022
About the Home Renovation ROI Survey
A national online survey of 340 Royal LePage brokers and sales representatives in real estate markets across Canada was conducted between February 17th, 2022, and March 14th, 2022. Each respondent was asked to complete an online survey composed of seven questions pertaining to the value of popular home renovation projects.