Corner Financial Partners
Bill - Gord - Mike - Clint
Safeguarding your family’s financial future
Does it pay to renovate?
One spouse wants to modernize the kitchen with a quartz-topped island, sleek push-open cabinets and built-in appliances. But the other spouse wants to make the basement into a home theatre with a state-of-the-art projection system, surround sound and reclining theatre-style seats. If this couple had to choose one renovation based on adding value to their home, the new kitchen wins. According to the Appraisal Institute of Canada, renovating the kitchen brings the highest return on investment, followed by renovating the bathroom, then repainting the home’s exterior or interior.
The financial reality
No matter what renovation project you choose, there’s one key factor to recognize – any boost in your home’s value will likely be less than the cost of the renovation. However, the Appraisal Institute cites that kitchen and bathroom renovations can typically recover 75% to 100% of their cost. So, generally speaking, you should renovate because you want to enjoy the transformed space, not to turn a profit on the upgrade when selling your home.
Difference makers
Determining whether a renovation pays is different when you create a new living space or improve the livability of existing rooms. Making a basement into a rental unit will pay for itself and continue to produce ongoing income. A new living space could be created for an elderly parent who can’t manage independently. Homeowners who develop mobility issues may renovate their homes to increase accessibility, such as adding amenities that enable them to live on one floor. In these cases, renovations are worthwhile in ways beyond adding value to a home.
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