If you are considering a home renovation, make sure you research your project carefully to ensure you are making a wise financial decision and getting the biggest bang for the buck..
Not all renovations are what they are cracked up to be.
When deciding what type of renovation to undertake and how much to spend, consider the payback on your investment.
In general, renovations are unlikely to deliver a dollar-for-dollar return on investment, sorry but it's the truth. That's not to say that doing renovations is a waste of money, rather it is to say that you should balance your family's enjoyment of the home with your desire to make a wise investment decision.
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When determining the scope of your renovations, "keep it simple stupid". Forget about the luxuries and keep the renovations general and to projects that improve the homes appearance.
Probably the greatest return on investment is painting and decorating. Why? Because they play on people's emotions and when you play with emotions, people tend to do things they wouldn't always do. It's amazing that if carefully throughout, a can of $30.00 paint can potentially bring back hundreds and sometimes thousands of dollars.
Here's a good rule of thumb when it comes to renovations... Don't be the best on the block, you may be overpricing your home for the neighborhood. From an economic point of view, make your home no more than second best in the area.
Thinking of renovations? Here is a list of the top 10 renovations and their average return on investment as determined by the Appraisal Institute of Canada.
|
Top 10 renovations |
Average return on investment |
|
73% |
|
|
72% |
|
|
68% |
|
|
65% |
|
|
62% |
|
|
57% |
|
|
51% |
|
|
50% |
|
|
49% |
|
| Furnace/heating updating |
48% |
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