Have you always dreamed of adding a sauna room to your house? Or perhaps you’ve imagined yourself soaking up the sun on your rooftop patio? There are dreams and then there is reality. Before starting any home improvement, homeowners should evaluate the return on investment (ROI). Ask yourself what renovations will boost the resale value of the house. Here are three renovations that pay off.
Replacement of flooring:
Return on Investment: 50% to 75%
Pulling out that shag carpet and replacing it with wood flooring will definitely increase the resale value of your home. Even if you don’t plan on selling soon, hardwood floors generally last longer than other flooring options. Be warned, you’ll have to dig deep in your pockets to pay for wood floors. Oak, hard maple and birch floors are pricey, but they offer a high return on investment. According to the Appraisal Institute of Canada, the ROI on floor upgrades ranges from 50% to 75%. That means if you spend $5,000 redoing your floors, you can expect to recoup anywhere from $2,500 to $3,800 of your costs. If you’re a handy person, you can save yourself a few hundred dollars by installing the floors yourself.
Kitchen and bathroom renovations
Return on Investment: 75% - 100%
It’s no surprise that the two most functional rooms in your house – the kitchen and the bathroom – are the two spaces that add the most value to home. Whether it’s new cabinetry, counters, fixtures or appliances, expect a high return when renovating the kitchen or bathroom.
Replacement of windows
Return on Investment: 50% to 75%
Not all home improvements are done for aesthetic or lifestyle reasons. Maintenance and repair renovations are done when things, such as doors and windows, are not working properly. And since poorly functioning doors and windows are a major contributor to energy loss, up to 20% according to some estimates, the return on investment is high. Don’t balk at the initial, upfront costs. Anything you can do to improve the energy efficiency of your house will pay off over time.
To calculate the value of variety of other home improvements or create a worksheet, click here to use the Appraisal Institute of Canada’s RENOVA online guide.
Photo courtesy of Flickr, Creative Commons, NancyHugoCKD.com
