11 Jul Real estate Renos: The Best Bang For Your Buck
Whether you’ve been living in your home 20 years or just moved in, renovations can be a stressful yet exciting time. However, are all renovations created equal? The answer to that question my dear friends is a big fat NO. It’s a statistical real estate fact that certain renovations will get you more money at resale or for evaluation purposes then other home improvements. I can also attest to this fact and will show you some great and recent examples of how this is true time and time again.
Ladies and gentlemen, kitchens and bathrooms will get you the most bang for your buck in the crazy world of real estate renovations. You can spend all the money you want building a Terrace, putting up wallpaper, even exposing hidden brick but at resale or evaluation you will get big money for just the mere remodelling of the family kitchen and/or bathroom.
Ah the kitchen! It’s where mom and dad cooked your favourite delicious meals, where your kids do their homework and has always been the soul of any home. Families come together in a kitchen, lovers share wine there and children run in and out of it all day. It’s for that reason that the kitchen renovation is number ONE on the list of more of value for your investment. Depending on the size of your home, a kitchen renovation can run from anywhere between $5000-$80,000 in some cases.
In today’s market there are many options and materials to choose from. The trend today for kitchens is lighter colors and open concept with either marble, quartz or granite counters, dark colored kitchens are “out”! White, pale, sunny, open concept, islands and wood flooring (yes you just read wood flooring) are “in”. According to Remodelling Magazine’s Annual Cost Versus Value Report for 2014, “kitchen projects added 82.7% of the projects cost back to home’s value”. The theory behind this fact is that would-be buyers always over estimate how much it would cost to update a kitchen.
Take a look at the example below:
These two houses in Beaconsfield are exactly the same model. Except one had a spectacular renovated kitchen and the other did not. The home with the renovated kitchen sold for $530,000 in 2014 while the neighbouring home with the outdated kitchen sold for $390,000 in 2013. That’s $190,000 difference!
It is quite clear that if the neighbour would have invested in a basic kitchen update, they would have added tens of thousands of dollars to their bottom line.
The second most important renovation homeowner should invest in is the reno of the household bathroom. The bathroom reno rate number TWO on the list of renovations that will add value to your home. Like its cousin the kitchen, the new trends for bathrooms are lighter colors and marble countertops. Today’s amazing bathrooms have all sorts of add-ons such as built-in shower spas, heated floors and towel racks, and even surround sound and flat screen TVs. People are spending more and more time in their bathroom so in investing in them is super important. Although many sellers think that money is lost when renovating a bathroom because they believe potential buyers will redo it to their own taste anyway, nothing can be further from the truth.
Let’s take another recent example in today’s real estate market of how a bathroom can affect the sale of a home or condo.
In October 2013 I sold a property in Baie d’Urfe for $518,000. This home had a fabulous kitchen and a renovated bathroom. Its neighbour and twin sold in March of this year for $334,000.
You can do the math. There are countless examples showing the huge return on investment due to kitchen and bathrooms renovations which are almost unbelievable. In fact, according to the Appraisal Institute of Canada, the largest property evaluation organization in the country, you are likely to get back 75 to 100 % of the investment you make renovating your kitchen and bathroom. Always keep in mind though that any renovation should be relative to the value of the house. For example, a $30,000 bathroom remodel should not be done in a $300,000 home.
Increasing the value of a home is the number one concern for most homeowners and a renovation project is one to achieve this. For those of you who did not know where to start with your updates, you can be secure in knowing that kitchens and bathrooms are not only a safe bet but a winning one!