How do you know which home improvements can be recouped in the listing price when you sell your home? It's a prudent question, particularly if you're deciding between spending a little or a lot on upgrades.
If you've tried to research this topic, you know that it's not easy to get a clear answer. That's largely because the amount of money you invest in your home and your ability to recoup or even profit from those upgrades depends on a variety of variables.
Your neighbourhood, the age of the house, cost of the upgrades, types of improvements and even the style and colours selected all play an important role in determining how likely it is that you will see this money back when you sell.
If your goal in your DIY project is to make a profit on the upgrades, the Appraisal Institute of Canada (AIC) recommends four areas that offer the highest return on investment.
Kitchens & Bathrooms
Updating or renovating a kitchen or bathroom with a quality of materials and workmanship consistent with the neighbourhood is the most likely to lift the sale price of a home, according to the AIC. How much to invest will also depend on the present condition of the home and on how long you plan to live there. AIC suggests you can avoid over-improvement by ensuring that the renovation aligns with the overall style and design of your home. Remember to keep your potential buyer audience in mind while you're deciding on what to upgrade and which colours to choose. Investing a great deal of money in finishes or cabinets that will likely appeal to few consumers may not add value at all.
Choosing a more neutral texture or appearance such as taupes and beiges will broaden your buyer audience when the time comes to sell.Further, beware of overspending on kitchen or bathroom enhancements in smaller or older homes. The amount invested should be aligned with the overall price of the property, so be sure to evaluate what you plan to spend compared with how much the house can likely fetch in the sale price.
A coat of paint is an inexpensive way to create a fresh, new look that buyers will find attractive. Ensure you select neutral tones and good quality paint to attract the broadest possible audience. If you can, spend a few more dollars and have a professional do the job.Small details like paint near floorboards and ceilings can be noticed by buyers, leading them to draw either positive or negative conclusions about pride of ownership.
Remember to consider the exterior of the home, as well. What buyers consider an otherwise near-perfect home can be quickly marred by even a small area of peeling paint on the outside of the house.We want to believe that buyers would be able to see past these little imperfections, but the truth is that buying a home is more emotional than rational. Don't give potential buyers any reason to draw negative conclusions about how well you cared for the home.
AIC suggests that updating decor is a good way of adding solid value while keeping costs under control.
Lighting and plumbing fixtures, counter tops, replacing worn flooring or refinishing hardwood floors can go a long way towards enhancing the look and feel of a home.Don't underestimate the impact of choosing just one item from the list. A new kitchen faucet implies luxury and cleanliness to a buyer and can be purchased and installed for just a few hundred dollars. Cabinet hardware is easily and inexpensively replaced and can give a modern, sharp look to an otherwise dated kitchen.
Further, innovations in the flooring industry have led to a much wider variety of cost-effective options that home sellers can leverage in lifting the sale price of a home.
AIC recommends decluttering to best showcase the features of your home. Removing all excess items from the various rooms in the house adds a feeling of spaciousness and neatness to a buyer's first impression.Depersonalize where possible. Removing family photos from walls and shelves before your showings begin will allow your buyer to more easily imagine themselves living in the space.
Hire professionals to help you as you venture down the home-improvement path. AIC suggests hiring interior designers, architects or contractors as needed, and budgeting these costs in with your anticipated investment for upgrades to ensure you don't overspend.
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