Improvements to the home can be rather expensive, but an increase in value has the potential to be substantially more profitable in the sale. It’s important to know which renovations will give you the best increases in value. It’s wise to research the type of improvements, because if you can comfortably by yourself we highly recommend that as some renovations aren’t that difficult, but can be costly to utilize a professional. Sometimes a professional is required, always for structural and electrical work. Always operate within your comfort zone, don’t do tasks that are too daunting by yourself know when to use a professional and when to do it on your own. Be aware of your finances, renovations can be expensive so ensure that you budget accordingly. Focus on one room or project at a time, as you can easily overwhelm yourself if you’re inexperienced. If this is a do-it-yourself project, get guidance on how to proceed from established professionals.
In our interview with Scott McGillivray of HGTV’s Income Property (which you can read here) stated “…sometimes it’s the smallest fixes that will have the best returns… some of my best flips have been super simple. It’s about securing the right property in the right market, cleaning it up. Honestly, you won’t see this on my shows. You won’t see me buy a property, throw all the furniture in the garbage, paint it, mop the floor, replace the appliances and put it back on the market because there’s not enough content there for a TV show. But you can make $20 – 40 grand on a property doing that and there’s nothing wrong with it. And so realistically, take on something that’s within your comfort zone. You don’t need massive renovations in order to make good returns. So you’re either going to do the bare bones, which is the buy, clean it up, stage it and sell it. That’s sort of the simpler way or you’re gonna go full on you’re going to rip it apart restructure it. That’s where you have to make your decision. And a lot of the times they say try simple things first, don’t go gangbusters on one small change. Maybe you’re painting the whole house, ripping out the carpets, sanding the hardwood. Pick something that’s not going to put you in a precarious situation where you’re running out of time, where you’re running out of money.”
Renovating your home for your own personal tastes is very different from renovating to increase its value for a flip. Installing an inground pool because your family can enjoy it for years has its own value, but when it comes to selling you may not get back your investment; as not all people want a pool due to the maintenance work and cost. If you are considering doing renovations to increase value, this is our list of 5 top things that will help you focus on the necessary sections:
- Income Suite: The biggest and most effective way to add value to your home is to build an income suite within the property. Consider converting your basement into a rental and advertise your home as an investment property. Ensure that your neighbourhood has demand for this type of offering before you proceed and that it abides by all zoning laws. A consistent income stream is the most appealing to homeowners who want to increase their wealth. This project requires the most amount of work, but it can be the most beneficial to increasing sales price.
- Kitchen: This is the most important room when it comes to valuation and it can make a significant impact on the value of the property. When considering a renovation, think modern and fresh. Update your cabinetry, install under cabinet lighting and install new appliances. To save on costs, look at options like Ikea as opposed to custom cabinetry.
- Bathrooms: The second most important room(s) when it comes to valuation. Upgrading cabinets, counter tops and hardware for a fresh and modern look will increase your home’s marketability. If you can add an additional bathroom where there is dead space it will increase your home’s value even more. Do not sacrifice useful bedroom space for a bathroom.
- Flooring: You will see an immediate increase in your value by installing hardwood floors. For cheaper fixes, consider refinishing existing hardwood floor or removing carpet and adding engineered laminate flooring throughout. In the bathroom, you’ll always see higher demand for tile over laminate.
- Fixtures: If you can’t change the cabinets in the kitchen and bathrooms, consider updating the cabinet hardware, light fixtures, counter tops, faucets and even just handles or door knobs. This gives the appearance that a full renovation has been completed, this can change the look and feel of your home.
Bonus Tip: Believe it or not, the biggest return on your investment in terms of can be a simple paint job, it’s the most cost effective and provide the biggest return.