Here's a great article from the Toronto Star discussing the difference between a renovation in your home for you to enjoy vs a specific project to improve the value of your home. Thinking about selling in the next 3-5 years? If so, be careful about the money you're putting into your home now. Don't over improve as you'll won't see the return in such a short period of time!
Will help you sell:
- Kitchen, bathroom renos; powder room
- An extra bedroom
- Hardwood floors
- Finished basement
- Landscaped yard
Won’t help you sell:
- Sound systemss
- Laminate flooring
- Removing walls; eliminating a bedroom
- Sauna; Jacuzzi.
Not only does every street in Toronto seem to be under construction, but at least a few houses on every street also seem to under renovation.
When we work with clients on a renovation project, our job is always to marry the architecture of the house, with the client’s goals and budget to make the whole thing come to life. One of the questions we always ask is, “How long do you plan to live in this house?” The idea of resale weighs heavy, but not all renovations will yield a return. Some are actually a detriment to the sale price but might make you happy while you live in the home.
Five to seven years is a great rule of thumb when you’re thinking about resale. Seven years ago, who would have imagined heating and cooling systems, security and sound systems that could be operated from your smart phone? Almost every must-have, anyone-would-want-this item is going to be outdated in seven years’ time. It’s wiser to make yourself happy for the next five to seven years and let the next owner add the must-haves.
If you’re renovating with a return in mind, then the usual suspects are still important. Kitchens and bathrooms provide the biggest bang-for-buck in house sales. They are the most expensive rooms to renovate which is, perhaps, why a prospective buyer appreciates having them done.
The style of kitchen you choose may determine the buyer who will look at your house. A modern kitchen in glass or high-gloss makes a house feel very different than a more traditional painted kitchen. The best advice here is to suit the style of the kitchen to the architectural style of the house. A loft space is more suited to a very modern kitchen where as a traditional home in High Park with a modern kitchen is more a matter of taste.
People often make the mistake of buying professional series appliances for the kitchen which will not provide a return. While buyers may understand that cache of the brand, it won’t necessarily increase the sale price to equal your investment. If you decide to invest in those appliances, just know that you are doing it to satisfy your internal chef.
Bathrooms on every level of the house will provide you with a decent return as well, but don’t go crazy. The opulent bathroom with lovely finishes is always going to impress a potential buyer. But the addition of another bathroom will be more valuable than putting in the best tiles and most expensive fixtures in just one. If you’re in the process of renovating, you’d be well-advised to put in a powder room on the main floor. The same is true for an ensuite washroom, which will also yield a return.
Yet, if a powder room means squeezing it in and creating an awkward kitchen, you’ve made a mistake. The same is true upstairs. But don’t eliminate an entire bedroom to accommodate a larger bathroom on the second floor, and an added ensuite. Remember: buyers are looking for a number of bedrooms and will rarely exchange that bedroom for a second bathroom.
You might be better to leave out the ensuite bathroom completely and add another bedroom; it will pay a much larger dividend than any bathroom addition could bring. Now, you’re faced with deciding whether the resale outweighs your desires — or vice versa.
It is also a little weird when you see a space with the open-concept bedroom/bathroom combination. I have experienced a few hotel rooms around the world where it was successful, but that design requires a great deal of skill, planning and added expense to achieve. Taking down walls to accommodate a bathroom, with a curtain for a door, is just a mistake and will turn off buyers. A proper door, or an ensuite with a toilet, sink and smaller shower, will yield a better return than taking out the walls.
Don’t forget the basement. Lower-level living is a feature that people look for. For many buyers, this can be a source of income, provide space for a nanny or room for the kids to play. I wouldn’t advise making a huge investment in the basement with features like theatres — you may be doing that just for you.
Smaller renovations can also make a big difference to buyers. Simply installing hardwood floors can increase your home’s value. There are choices to be made, whether engineered hardwood or three-quarter-inch hardwood, along with stain, colour and finish. But the addition of the floor is what’s important, while colour, style and board widths matter less.
The addition of inexpensive laminate flooring tends to be a deterrent when selling. The same is true of peel-and-stick tiles that find themselves in bathrooms and kitchens when sellers are in a hurry. They may be an acceptable choice for your life, but they are not going to yield a return.
Curb appeal also helps. If you’re going to invest in your property with the aim of a higher return, then kick the idea of curb appeal up a notch and do some landscaping. Adding a bricked driveway will yield a return greater than your investment. Consider hiring a professional to work on your plantings, retaining walls and stepped gardens. You’ll love it and a future buyer will pay you for your efforts.
The same is true at the back of the house. A landscaped yard that accommodates entertaining, outdoor kitchens, sitting areas and fire pits are always appealing. Everyone loves the idea of extending the living area of the house outside during the summer months. Gardens that are low maintenance, landscape lighting and privacy will always give you a return.
Assess your enjoyment of the property versus the return on investment. Elements like a sauna may make you happy but it won’t appeal to many others. The same is true of elaborate sound systems — they can cost a huge amount of money and bring you hours of joy, but buyers don’t care about them enough to provide a return on your investment.
Glen Peloso appears every two weeks in New in Homes & Condos. He is principal designer of Peloso Alexander Interiors, national design editor of Canadian Home Trends magazine and a design expert on the Marilyn Denis Show on CTV. Contact him at pelosoalexander.com, follow on Twitter at @peloso1 or @glenandjamie, and on Facebook.