Renovate strategically, for an easier sale
Over the last few years there has been a massive influx of new homes into the market, which has shifted power from sellers to buyers and and slowly brought the market to equilibrium.
This was not the result of weaker demand, but rather a dramatic increase in supply. So in today’s market, sellers need to find ways to make their homes stand out from the crowd. Whether your house is showing its age or simply needs a bit of work to bring out its finer points, it may be worth your while to spruce it up before putting it on the market.
Target the right rooms
According to the latest RENOVA* survey conducted by the Appraisal Institute of Canada (AIC), the kitchen and bathroom are the two rooms most worth renovating. When you sell, you may recoup as much as 75% to 100% of your investment. However, be careful not to overspend! For a kitchen, invest no more than 15% of the property’s total value, and for a bathroom, no more than 5%. In addition, know that, as a general rule, any changes should fit well with the home’s original architectural profile.
Make improvements with lasting value
Another part of the house that you could consider renovating, and one that can generate a return on investment of 50% to 80%, is roofing. Replacing a few shingles or the entire roof can make a house very attractive to buyers, who will save on a major short-term expense. Furthermore, this type of work can help you avoid unpleasant surprises such as roof leaks, which can lead to additional costly repairs. Similarly, installing a new HVAC system that is more energy efficient, or because the old system is in a state of disrepair, can also give a significant payback. You could recover up from 50% to 8% of your investment, in addition to seeing immediate benefits from energy efficiency.
Freshen up the look at minimal expense
If you are looking to renovate a property on a smaller budget, repairing the interior or exterior is always an excellent option. By changing colours – preferably to neutral tones – your home can have a renewed look, and the payback may be in the range of 50% to 100%.
Avoid work that gives less ‘bang for the buck’
Unless, surprisingly, the goal really is to modernize the entire house from top to bottom before putting it on the market, no one on the verge of selling is looking to make pointless investments. According to the AIC, there is less potential payback on renovations such as to a swimming pool or to items like skylights, which offer a returns of 0% to 25%, or to a hot tub, where the likely return is in the 0% to 50% range. Redoing the landscaping or installing a home theatre are not far behind, offering a potential return on investment of 25% to 50%.
In summary, if your main goal is to renovate so you can sell your home quickly at an optimal price and true market value, the best strategy is to plan carefully!