Pass through virtually any neighbourhood and youre almost certain to see work vans packed with building supplies spilling from driveways, accompanied by the unmistakable clap of a nail gun and the high-pitch whine of a table saw.
Canadians are opening their wallets to renovate their homes like never before. Renovation spending hit $68-billion in 2014, compared to $20-billion spent on purchasing new homes, according to research released in July by Altus Group.
Home price appreciation is strong. Interest rates are low. And the so-call HGTV-effect has Canadians raiding hardware aisles and hiring contractors to keep pace with the latest reality TV shows.
BNN reached out to Scott McGillivray, the host and executive producer of Income Property on HGTV, and Paul Maranger, a real estate broker with Sothebys International Realty Canada who handles some of the most sought-after real estate in Toronto, to find out how to increase the value of your home and avoid the common pitfalls that turn renovation investments into sunk costs.
COLOUR ME WEALTHY
Updating a home with the latest colour pallet is by far the best value for money according to Maranger. He estimates an impressive 400 percent-plus return on investment, and even more if the homeowner is handy with a roller and brush.
Fresh paint equals cleanliness in the eyes of buyers. Buyers dont like going into a house with fingerprints and scratches. Even if a property is terribly maintained, but then freshly painted, youre going to have an incredibly large return, he said.
Maranger says being mindful of the target buyer is essential. White paint may suit an eclectic modern loft, but it tends to create an ice cold and unfriendly environment for families.
HARDWARE UPGRADES ARE EASY MONEY
Door knobs, door bells, light switches, and electrical outlet covers. These touchpoints are where a potential buyer will get up close and personal with your home. Think about greeting someone with a weak handshake -- thats the impression your house will give if you neglect these simple upgrades.
If youve got a buyer coming through, theyre going to grab the door handles and turn on the light switches. If the hardware is all old and busted, you immediately feel like this is a low-quality product that you are getting into, said McGillivray.
COOKING UP VALUE
Aprons and tea cozies help make the kitchen feel like the heart of any home. Our experts agree its the first place homeowners should look to do more serious upgrades.
Living rooms, dining rooms, family rooms are typically just walls and floors. The kitchen is really the trademark telltale of the latest and greatest of the home, said McGillivray. You might put $25,000 into a kitchen renovation, and you might get $40,000 of value. Even though its a smaller percentage return, its a higher value return.
McGillivray says refurbishing cabinets and replacing faucets, sinks, and countertops makes a big difference on price since people tend to congregate in kitchens because of the high-traffic and functionality of the space.
UPGRADE THE BASEMENT FOR INCOME
Gone are the days when the basement served as a catch-all for outdated furniture and home dcor. Canadians have upped their expectations for subterranean spaces. Buyers are looking for a place to relax that exudes the same quality as the rest of the home, according to Maranger.
Basements today have a very high return compared to previous years, he said. If your basement reads storage, you pull away from value.
Maranger says the best layouts feature a large, open media-focused room at the foot of the staircase where guests can get comfortable and enjoy a movie.
McGillivray, however, argues that converting a finished basement into an income property has been his biggest value booster, especially in urban markets. He says buyers are willing to pay more for a guaranteed monthly revenue stream, and the pool of eligible buyers is exponentially expanded when an income suite is added.
If youve got two houses side-by-side for $500,000, and one has an income suite, someone who is qualified for a $400,000 mortgage based on their income cant buy the one without the income suite. The one with the income suite may add $1,200 or $1,500 per month to their qualified income. Now they can qualify for financing on the property, he said.
KEEP YOUR CUSTOM BUILDS IN CHECK
The experts agree that the worst thing a homeowner can do is build a highly personal project and expect to recover the cost when they sell. Renovating to boost the value of your home means adding features most potential buyers will appreciate.
We saw a property a few years ago. They renovated it for three boys, ripped out the main bathroom. They created three urinals and three shower heads in oversized showers, said McGillivray. It was ludicrous. What if the buyers had daughters?
Photos courtesyof SKIT Inc.
href='http://news.google.com/news/url?sa=t&fd=R&ct2=us&usg=AFQjCNHdgq-tqwTDObI67U9-JeF8runCYA&clid=c3a7d30bb8a4878e06b80cf16b898331&ei=5MfuVYmaLo-oaKupnOAF&url=http://www.bnn.ca/News/2015/9/4/Home-renovation-money-makers-endorsed-by-the-experts.aspx' - http://news.google.com/news/url?sa=t&fd=R&ct2=us&usg=AFQjCNHdgq-tqwTDObI67U9-JeF8runCYA&clid=c3a7d30bb8a4878e06b80cf16b898331&ei=5MfuVYmaLo-oaKupnOAF&url=http://www.bnn.ca/News/2015/9/4/Home-renovation-money-makers-endorsed-by-the-experts.aspx -