Spring 2004
"So What" are Your 5 Best Home Renovation Investments?

For most of us, our home is our largest asset, so it pays financially to maintain and improve its value. And of course, we all enjoy having all the modern conveniences available to homeowners today.

In recent years, Canadians have spent more on renovations than on new construction. There are more and more buyers that are willing to compromise to some degree, on the layout or condition of the home to obtain their desired location. As a result, newly purchased homes are often being renovated to better suit buyers’ styles and tastes.

Equity gains have also made a significant contribution to the surge in renovation activity, as homeowners finance their chosen improvements through the equity they have built up within their homes. In fact, a large portion of an investment in home improvements can be directly recovered through increased resale value (never mind any capital gain you might obtain!). So, these homeowners not only are gaining improved lifestyles, they are doing so at minimal, if any, long term cost.

Since 1996, household repairs and renovations have been on the upswing. According to Statistics Canada, Canadians spent $11.8 billion in terms of household repairs and renovations in 1996. By 2001, figures had climbed 72 per cent to $20.4 billion. Estimates place 2002 household repairs and renovations at $26 billion, an increase of 27 per cent over the previous year and we expect 2003 numbers to report similar results. Now we’re into 2004, with property values in the Greater Toronto Area still rising, it’s very possible these numbers will exceed $30 billion – 3 times what was invested in home improvements just 8 short years ago.

“So What” is the best financial investment in home renovations that you can make? Investments in kitchens, shingles, plumbing, windows, painting and upgrades to flooring tend to add significant resale value. Backyard pools, hot tubs, new broadloom, and removal of interior walls to create open concept living, in contrast, tend not to add to resale value - but they may be lifestyle choices you prefer.

According to Remodeling Magazine, highest return on investment for renovations include:

1. A Minor Kitchen Remodel – cost recovery on resale: 94%
2. Bathroom Remodeling – cost recovery on resale: 77%
3. Deck Addition – cost recovery on resale: 73%
4. Siding Replacement – cost recovery on resale: 71%
5. Window Replacement – cost recovery on resale: 68%

Renovation and remodeling are not the only ways to maintain and increase the value of your home:

Exterior
· Plant flowers and shrubs that add colour and brighten your lawn and landscaping
· Use outdoor stain and sealants to brighten up bleached decking and fences
· Repair lifted or severely cracked walkways and driveways

Interior
· Vacuum regularly, carpets wear out fast and unevenly
· Keep all windows, windowsills and woodwork clean
· Dust regularly and watch for cobwebs in corners and on light fixtures
· Upgrade old window treatments with new mini-blinds, vertical blinds or shutters

Kitchen
· Regularly clean all appliances, counters, backsplashes, cabinets, and floors
· Replace broken, worn or outdated knobs and hinges on cabinets
· Consider upgrading linoleum floors to new parquet, random plank or pergo

Bathrooms
· Strip out and replace old grouting and discoloured caulking
· Make sure faucets don't leak and replace any fixtures that have lost their finish
· Consider replacing tiles and shower curtains if the colours are dated

Please contact David So directly by email, visit online or call 416-410-6663 ext. 31. We’ll show you financing opportunities that can enhance your home today - and its resale value tomorrow!