AIC’s How to Value Your Renovations

Expected returns calculator no longer available

AIC, The Appraisal Institute of Canada, used to have an expected return on investment calculator on their website called Renovo. It gave a suggested range of percentage return on a variety of renovations, such as building a deck, renovating a kitchen, replacing flooring and much more. No longer is the calculator available, citing that it requires revision and updating.

AIC’s New Booklet on Return on Renovations

AIC recently published a booklet called, “How to Value Your Renovations.” Though the booklet does not actually offer specific percentages on recoup values for reno’s, it does offer insight for three types of upgrades:

  1. Reno’s that offer the highest return,
  2. Improvements that offer the highest enjoyment, and
  3. Replacements that maintain your home’s value.

The publication suggests the top 5 upgrades in each of these categories. In the highest return on investment, the projects depend on how long you intend to live in the home. If short term, they recommend repainting and updating decor such as lighting and plumbing fixtures. They also suggest decluttering; it’s inexpensive and provides a good return on investment. Costly investments like kitchen and bathroom renovations also offer a good return on investment but are more long term.

Cost vs. Value Report 2016

So how does the above compare with the 2016 Cost vs. Value Report’s national averages from the U.S.?

-A major kitchen reno recoups 64.90% on average, while a minor kitchen reno recoups 83.10%.

-Remodelling a bathroom returns 65.70% on average, while a bathroom addition recoups 56.20%. It further suggests that the more upscale upgrades return less.

While the Cost vs. Value report does not mention repainting, replacing lighting or plumbing fixtures, it does reflect that small investments return more of your investment dollars. For instance, a steel entry door replacement recoups an average of 91.10%. In more general terms, AIC’s booklet concurs. 

Enjoyment Value

AIC’s top 5 reno’s with the highest enjoyment value are finishing a basement, landscaping and adding garages, sunrooms and decks/fences. Cost vs. Value gives basement remodel a 70.40% return and a wood deck 75%. Landscaping, garages and sunrooms are not mentioned.

Maintaining the Worth of Your Home

AIC’s top 5 in this category are replacing roofing, heating/cooling, windows and doors, updating electrical and repairing structural defects. Yet Cost vs. Value suggests a 71.7% return on roofing, and 73.3% on vinyl windows.

To maximize your return, reno’s need to be well done, appeal to the wide number of buyers and add to the overall value of your home.   

Eugene Pilato

Eugene Pilato

Broker of Record
CENTURY 21 Today Realty Ltd., Brokerage*
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