WATCH ABOVE: Two real estate experts reveal what renovations will give you the most return.
Want to spruce up your home but aren’t sure where to start? Let’s look at what experts believe will add the most value.
“Kitchen, income suites, bathrooms, flooring and fixtures — those five items are a pretty much guarantee to give you a great return on investment,” says Scott McGillivray, HGTV host and author of How To Add Value To Your Home.
He’s found that the first two — kitchens and income suites — have consistently proven to have the highest return over the couple years. And builders in cities like Edmonton and Saskatoon are now even putting income suites into new developments “because it’s such an easy way to sell the properties.”
“Having an income suite produces a secondary source of income…it [also] opens up that house to a broader market and therefore forces the value up,” McGillivray says.
When it comes to the other big one (kitchen renos), McGillivray says that if you don’t have a ton of money to work with, just upgrading your appliances can make a big difference in taking that space to the next level. After that, he breaks a kitchen renovation down to three possible tiers.
1) “The Facelift”
When to do it: If your kitchen looks a little “tired” and “old” but the layout is fine.
What it entails: Painting the cabinets and changing out the cabinets, backsplash, appliances and hardware (i.e. faucets).
“These are the most inexpensive and efficient ways to upgrade a kitchen and have a huge impact. This is where your return on investment is highest in a kitchen,” says McGillivray.
Estimated cost: $1,200 to $1,800 (not including appliances)
When to do it: Your cabinets are worn out and past the point of painting. Or maybe you just really hate the doors because they’re so out of style that even a paint job couldn’t save them.
What it entails: New doors.
Estimated cost: $3,000 to $3,500
3) The Full Monty
When to do it: When layout changes are needed and cabinets are at the end of their lifespan.
What it entails: This is when you open up walls, as well as move around plumbing and electrical.
Estimated cost: “If you can stay within five per cent of the total price of the home, then you’re staying well within the range to get great returns,” McGillivray says. “So on a half a million dollar house, a $25,000 kitchen isn’t necessarily unreasonable.”
A good kitchen should last 25 years, he adds. It may need a little upgrade after 10 to 15 years.
“You still can get a great return on investment if you’re smart, unless if you’ve got really a high-end [home]…you can buy a fantastic custom-looking kitchen using standard cabinetry.”
Painting any room is going to help — it’s also one of the cheapest renos you can do, so that’s a plus.
Curb appeal is important, as well. And what’s one of the first things people see? Your front door.
“A few years ago it was ranked as the highest renovation return on investment,” McGillivray says. “And this was across North America.”
The more sweat equity you put in (by doing the work yourself), the higher your returns will be…in theory.
“There’s a fine line between getting sweat equity and screwing up your house,” McGillivray cautions.
“If you don’t know what you’re doing and you try to take on something that requires a professional — if you do go to sell your house in the future and a home inspection reveals the work wasn’t done properly — you’re going to chip away at any equity you thought you built.”
WATCH: The most shocking DIY disaster HGTV’s Bryan Baeumler has seen? “A house that was literally held up by a single two-by-four.”
Two of the other biggest mistakes McGillivray sees when it comes to renos: over-improving for an area and over-customizing.
For condos, he explains that “if you’re not the standard or just a smidge above, you’re not going to get a return on your investment.”
So if you’re a “serial renovator”: stop. You can only renovate the kitchen or the bathroom so many times before you start diminishing your return, McGillivray warns.
As for you “emotional” renovators who overcustomize (you know, putting in ornate moulding, clouds on the ceiling, etc), you’re definitely not helping your resale value.
“It feels almost invasive for buyers,” says McGillivray. “It kind of feels like you’re not buying something fresh or new for you, it’s like you’re buying a used car.”
WATCH: More from McGillivray
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