Before your real estate agent plants the "For Sale" sign on your lawn, it's likely that you'll need to undertake some repairs and improvements. The question is, what repairs should you focus on? Should you address larger items or consider a total upgrade, or do you hope these issues go unnoticed?
- New
- Just replaced
- Upgraded.
Such sweet music to any buyers ears!
A home in move-in condition holds more appeal for prospective buyers. It's a fundamental rule in real estate that a well-maintained house sells more quickly than one requiring upgrades. If your home is in good shape and presents well, you're likely to attract multiple offers, potentially driving up the price, especially in a hot market.
Homes needing extensive work may be less attractive to certain buyers, as not everyone has the time, resources, or inclination to tackle significant repairs. First-time buyers and those leading busy lives often prefer a home that is maintenance-free.
When considering repairs, factor in the current market conditions and the characteristics of your community. In a seller's market, minimal work may be necessary, while in a buyer's market, completing repairs and upgrades becomes essential for securing the best possible price.
It's crucial not to get carried away with renovations. Not all home improvements provide a dollar-for-dollar increase in your home's value. The impact depends on the cost and type of improvement. For instance, spending $30,000 on an elaborate backyard setup might not instantly add the same value to your property. Similarly, investing $25,000 in Italian marble for your bathroom may not significantly increase your home's value by the same amount.
When contemplating renovations, consider both the cost and the community. Choose upgrades that align with your budget, avoiding over-improvements that exceed the norm for your locality. When buying a home, people often seek the least expensive property in the priciest community they can afford. Over-improving your home may place it at the higher end of the local market, potentially making it challenging to secure the best price. A longer time on the market may lead to price reductions to facilitate a sale where you may not get paid back for your investment.
Prepping your house for sale can often require an investment to bring it up to current standards and help it compete in the hot real estate market. Especially if you’ve lived in the house for several decades, you may be blind to your home’s shortcomings. Here, we examine the top home renovations to ensure your return on investment.
RE/MAX 2021 Renovation Investment Report outlines the following upgrades and cost recovery.
Paint
Painting is probably the most under-appreciated home improvement and was chosen as one of the top three renovations for return on investment in 18 of the 31 housing markets in a RE/MAX study, including in Toronto. It provides a high return for a relatively low investment and minimal effort. Painting is a very easy way to freshen your home, cover up blemishes on the wall, and it can be done yourself. The end result: a home that looks and feels like new.
When putting your home on the market, consider a professional painter. Choose one who can help select the right palette, skim the walls, seal trim and repair minor damage before applying top-quality paint that’s appropriate for each surface (matte for living areas, egg shell or semi-gloss for trims and doors and proper ceiling paint.) It doesn’t seem like the most glamorous of renovations or promise the most dramatic before-and-after, but it instills freshness and can flatter your home in ways you’ve never imagined. It’s like dressing for your body type; a colour expert can help select the perfect shades to work with the lighting in your home and ensure it puts its best face forward!
ROI: A fresh coat of paint typically garners a 60% return on your investment.
By the Numbers: Budget for a 2,000-sq.-ft. home: approximately $10,000-$15,000
Good “Bones”
When contemplating a profitable renovation, nothing “sinks” a sale price quicker than a house that’s taking on water. Especially in this market, where strong sale prices are being paid for homes with “good bones,” ensuring that the roof and windows are in good shape, gutters and drains are functioning properly and the foundation is dry is crucial to realizing the potential value in a home. Consider items like vinyl windows, a new roof or even waterproofing the foundation. Buyers are wise to structural issues, and learning that a homeowner has done their homework and made the proper investments to prevent flooding and leaks will go a long way in a buyer’s eyes (and offer!).
ROI: Renovations that will save home owners money in the long run will draw a higher return, around 75 per cent, depending on the scale of the reno.
By the Numbers:
All new, good quality vinyl windows for a 2,000-sq.-ft. home: approximately $15,000
Stripping and replacing the roof with quality asphalt shingles: $8,000 to $10,000
Proper waterproofing of the exterior of a foundation: approximately $60-$80/linear foot
Doors & Hardware
Investing in new interior doors and hardware; replacing the front door and adding a quality lock-set; and adding baseboard, door trim, crown mouldings and wainscoting are all examples of relatively inexpensive and non-invasive improvements that can immediately punch up the appeal of a home. It really comes down to the quality of the finish though. This is not a time to skimp on materials or workmanship. Hire someone you know and trust, or ask for referrals from friends who you know share similar standards.
ROI: Smaller projects that have less of a “wow” factor, and may even go unnoticed in an open house, draw a smaller return, around 50 per cent of your initial investment.
By the Numbers:
Solid wood front door with quality lock-set: $2,500
Solid core interior doors with hardware: $250/per door
Countertops
Kitchen renovations like counter upgrades rank among the top three renovations with the highest return on investment in 27 of the 31 housing markets in the RE/MAX study. Since kitchen renovations can easily snowball, consider a quick countertop refresh and appliance-swap as options for a great return on investment. Instead of shelling out upwards of $25-50,000, expect to pay about $3,000 for a quality stone, like granite or quartz, and between $5-10,000 for quality slide-in or a stand-alone set of kitchen appliances with a pro-look like stainless steel. While you’re at it, switch out your cabinets or put a coat of paint on your existing cabinetry to complete the kitchen refresh.
ROI: Kitchen renovations have the best return on investment, typically garnering a 75-100% return.
Bathroom
A bathroom makeover is one of the best renovations to do before selling since it has a high return on investment and is one of the main things buyers look for in a home. According to the RE/MAX study, it was one of the top three renovations for return on investment in 17 housing markets, including both Toronto and Vancouver.
Creating one luxury space in a home can have a great effect and return on investment. Focus your attention to on items like a frameless glass shower enclosure, marble-topped vanity or a gorgeous tile backsplash. Analyze your bathroom, pinpoint its strengths and weaknesses and ask yourself, “Where is my eye drawn when I enter this room?” Is the bathtub the focal point? The vanity? A window? This is where your renovations should begin.
ROI: Bathroom renovations, when done well, have a return of 62%, on average.
By the Numbers: Budgets vary but typically range between $5,000 to $15,000
Flooring
Flooring is the hardest-wearing element in any home and for many homeowners, replacing aging flooring is a must. New flooring was one of the top three renovations for return on investment in 14 of the housing market in the RE/MAX study. Therefore, it pays to look at the floor you walk on and invest in materials and installation that is done well.
The quality of the installation is essential. Expensive hardwood floors can look terrible if they are lifting or there are gaps between planks, while inexpensive laminate from a big box store can look great when laid properly. Carpeting, however, is rarely a good idea, especially when you’re planning to sell. While some people love the warmth and feel of carpeting in a bedroom or basement, buyers will see carpet and think one thing: carpet cleaners, STAT! Carpets tend to lovingly hold on to memories of previous homeowners, memories that buyers would sooner rather forget. Spare buyers the cleaning fee, or worse, all-out removal, and skip carpeting, or remove it yourself.
ROI: Depending on the flooring you choose, the return is generally 100-150% of your investment.
By the Numbers:
Typical hardwood floor: $4 to $6 per sq. ft., plus $2 installation fee per sq. ft.
Typical laminate floor: $1 to $3 per sq. ft., plus $1.50 installation fee per sq. ft.
Even though you might not be thinking about selling your home in the near future, it pays to perform renovations with a high return on investment. By updating various areas of your home, you can live more comfortably and rest easy, knowing that if the time comes to sell, you will be in a better position in the seller’s market.