Not all upgrades are equal
If you're like most Canadians, your home is probably your biggest investment. You want that investment to perform as well as possible, so if you think you may sell your home some time soon, it makes sense to do as much as you can to boost its value.
Depending upon your situation, this can mean doing some home renovations so your house becomes more attractive to potential buyers.
But, while upgrades can boost your home price and help your home sell faster, not all renovations have an equal impact on what your home is worth. To ensure you're making renovations that will actually pay off, read on to find out some upgrades that give you the most bang for your buck.
1. Budget-friendly kitchen remodels
The kitchen is the heart of the home, for this reason it is an instant selling point when it has been improved from any dated state.
Most experts agree a kitchen is key to improving a home's value and I would advised that if you only have enough money to renovate one room, the kitchen is the room to pick. Kitchens are the focal point of almost every home showing and an impressive kitchen will almost always make the difference between an average offer and the maximum.
Investing in the kitchen makes a lot of sense, as studies have shown as many as 80% of homebuyers list the kitchen as their favorite room. When your kitchen is updated, buyers may also be more forgiving of other outdated areas. Many people will tolerate a dated bathroom vs dated kitchen.
You don't have to spend a fortune to make a big improvement in your kitchen, either. In fact, while a major kitchen remodel returns only around 80% on your investment, a minor remodel has an 87% return. A minor face-lift for your kitchen could include painting cabinets or getting new cabinet doors, installing new appliances (you don’t have to break the bank), upgrading countertops, or switching out cabinet hardware. New doors, handles and stainless steel appliances make a world of difference!
2. Bathroom remodel
If your bathrooms are outdated, this is another room where updates could make a big impact. Next to kitchen, bathrooms are the 2nd biggest selling point in a home. Get this improvement right and you’ll have more success at the negotiations table.
Studies have shown a minor bathroom remodel can provide a 102% return on investment, and you don't have to spend a fortune to make big upgrades.
Consider re-grouting tile; remove and replace caulk around the shower, tub, and toilet areas; and maybe it is time to replace the toilet for a more efficient and modern look. Add custom glass doors to a traditional tub, new vanity/pedestal sink, mirror and light fixture too.
If you have a bigger budget you can replace the tub to a tile shower. When a potential buyer is comparing similar priced homes, this is huge. While converting a standard five-foot tub into a tile shower can cost around $3,000 to $6,000, you may get back as much as 84% of the money when you sell your home.
3. A new coat of paint
One of the cheapest updates you can make also has one of the best returns on your investment: painting your home's interior. It could cost $200-$300 per room if you do it yourself or we can recommend a professional who could do it as low as $2 per sqft.
It cannot be underestimated the effect that a clean coat of new paint has on a property. Most sellers don’t realize how much abuse walls take during ownership until that fresh coat of paint has been applied. New paint lightens rooms, hides visual defects and instantly makes a space feel fresh and clean.
Painting an interior can produce a 109% return on investment, but could benefit you even more if your home's colors are unusual. The goal is to appeal to the widest audience possible. Sometimes this means ditching the personal touch and going more neutral. Try Benjamin Moore Gray Owl. It goes with every other color out there -- it’s clean and just dark enough to contrast with white borders and make them pop.
4. Sprucing up your exterior
You only get one chance to make a first impression when a buyer pulls up to your home. That's why Holden Lewis, home analyst at NerdWallet believes the best bang for your buck comes from projects that enhance curb appeal.
I can attest to the importance of a first impression and you don’t get 2nd chances. Pulling up to the house could sometimes make or break the deal.
Making changes to your home's exterior doesn't have to cost a fortune. Curb appeal can be improved by some basic efforts such as power washing the home’s exterior & driveway. Alternatively, painting the home's front door could have a positive impact as well for only $200.
Improvements to landscaping are also recommended. Front and backyards. Think about refreshing mulch, trimming shrubs/grass, and planting seasonal colorful plants. These small investments create value when selling a home and you'll likely get more than a 100% return on investment for money spent on landscaping.
Making more major upgrades to your home's exterior can also pay off. Studies have shown you can recoup around 93% of the costs of adding stone veneer, around 91% of the costs of a new garage door, and around 91% of the costs of a new entry door.
5. Improving energy efficiency
While most homeowners think upgrades that improve the look of their home will pay off, improving your home's efficiency may actually make a bigger difference. In fact, a Remodeling.com survey found homeowners can recoup 116% of the costs of attic insulation. And attic insulation is just one of many upgrades that improve efficiency.
“While renovating the kitchen and updating the bathrooms are both great improvements that can increase property value, making energy efficient upgrades will give you more bang for your buck,” according to Sacha Ferrandi, founder of Source Capital Funding, Inc. a real estate finance company. “As the number of energy efficient homes continues to rise, first time buyers and renters are beginning to favor these upgraded homes over traditional homes due to the potential long-term savings.”
Ferrandi recommends upgrading HVAC, water heaters, and windows -- these changes cost less than solar panels and are more likely to provide a positive return on investment when the time comes to sell. When you sell, you can recoup around 73% of the costs of upgrading 10 old windows with new ones, and your energy bills will be lower in the time before your move.
If you make energy efficient upgrades, make sure your realtor markets your home appropriately. You can even consider providing copies of your utility bills to potential buyers so they can see how low ongoing costs will be.
Upgrade your home the right way
Ultimately, the market where you live is going to have the biggest impact on the upgrades you should make. Working with a local experts can help you to decide what upgrades it makes sense to invest in so your home meets the expectations of buyers in your market.
You'll also want to make sure upgrades and updates you do in anticipation of selling your home are neutral and designed to appeal to many buyers, as upgrades that buyers don't like won't add any value at all.
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