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Which Renovations Really Add Value To A Home?

For most the desire to perform renovations on their homes comes down to what they really want in their homes rather than what they truly require. The man cave in the basement just seems like a better value for the money than a second bathroom or expanding the dining room, after all think of the fun you will have in the man cave! There are some renovations that simply do not give the home owner the return on investment that they really hoped they would.

Many of us would simply love to install a pool for the kids (and Mom and Dad!) to enjoy on the hot dog days of summer and doing so can bring a lot of joy and fun into your lives, however from a re-sale perspective the addition of a pool will never allow you to recoup the investment you made to put the pool in. What additions or renovations will bring in the top dollar when considering the return on investment? The answers will surprise you.

Most people have always assumed that kitchen and bathroom renos always topped the list but they are not even in the top ten. The single best investment with the best rate of return is to re insulate the attic. You will spend on average $1,268 to do a 30×35 foot attic and will add a value of approximately $1,482 for a rate of return of 116%. Not too shabby.

The next on the list is a manufactured stone veneer on the exterior of your home which will realize a return of appx. 92.9%. This option has gained popularity considerably over the past few years, especially with homes that were originally aluminum sided to begin with. Another one that is seldom considered is to replace the garage door. This job will net you a rate of return in the 91% range typically. A steel entry door on the front of the house is another job that will net a substantial amount of return with about 91.1 % coming back into the wallet.

Others on the list are a MODEST kitchen remodel, the key word being modest. If you go all out and sink many thousands into a major kitchen remodel you may get a nice place to cook and entertain but you will not get the majority of the money you have spent back. If you spend about $20,000 you will typically get back about 83.1% which is very nice yet if you go absolutely high end everything and spend over $100,000 which is not hard to do with the top of the line appliances and counter tops and floors and such you will only get back approximately 61%.

Do your homework and find out if the job you are planning is really the best way to invest your money. You will be surprised at what you actually NEED versus what you really WANT. They are quite often two different things.

 

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Sam Seidman, CPA, CA, LPA
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Email: sam@torontoaccountant.ca

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