High Return on Investment for Renovations
What are the most valuable and worthwhile home improvements?
Homeowners wanting to maximize the value of their home should start thinking about their outside space a little more. Even though your typical kitchen, bathroom and other interior renovations will have a positive effect on value, the Canadian Appraisal Institute says that certain outdoor improvement projects will have a larger benefit when taking into consideration the time, cost and labor of your hard work.
The most recent data compiled from the Canadian Appraisal Institute shows that home renovations focused on the exterior of your home, rather than the interior, are most likely to create a positive cost to value ratio. While some interior renovations have the potential to increase value, not all home improvement projects provide a full return on your investment and they are not always worth the initial cost when you resell your home.
Remodeling Magazines most recent cost vs. value report said that the home improvements with the highest potential and the highest expected return on your investment include:
It is also important to remember that the longer you stay in your home, the greater opportunity you will have for potential return on your investments. In many cases it may be better to hold off on major renovations if you are not certain as to how long you will remain in your home.
Regardless of cost, some home improvement projects can be worthwhile simply because they can improve the quality of your life. Sellers should also consider how they can make their home stand out from others in the neighbourhood.
However, projects that take a home significantly beyond community standards are often not worth the price they cost in a resale situation. They certainly may benefit a homeowner’s quality of life, but if they don’t match what’s standard in a community, they’ll be considered excessive and may offer a very low return on investment.
Are “Green” Renovations a Good Idea?
Some green renovations, such as adding Energy Star appliances and extra insulation, or new multi paned windows, are likely to pay the you back in lowered utility bills, and relatively quickly. These lower utility costs can also be appealing to potential homebuyers in a resale situation. The amount a potential purchaser is willing to pay for these green upgrades is up to each individual home buyer.
These items are also sometimes considered for value increases by appraisers in a quality adjustment. By purchasing an energy-efficient product or renewable energy system for a home, the owner can also be eligible for federal tax credits.