3 Home Renovations With A Big Spend & Little ROI

 

While home renovations will increase the value of your home, it’s important to note that you may not always see a 100% return on investment. Before taking on any major home renovation, it’s important to talk to a professional to see what the projected increase value in your home will be in comparison to the spend. If you plan to be in your home long-term then getting all of your money back, and then some, might not be on the top of your list. However, if you are looking at moving in the next 5 years, there are some renovations that you may not see a full return on. Here are 3 examples:

 

Expensive Kitchen Renovations & Remodels

Now, more than ever, the kitchen is becoming the heart of the home. Many buyers desire an open concept, updated home with a functional, spacious kitchen. With that being said, you would think that this home renovation would yield a full return on investment. In reality, the ROI is only about 50%.

 

If a kitchen renovation is on your to-do list, it’s important to consider your budget as well as finishes so that you can maximize impact without breaking the bank. Unless you live in a luxury home, there is no need to spend $60,000 on a kitchen renovation. Easy ways to bring down your budget (without sacrificing style) are to go with granite alternatives, swap out custom cabinetry for stock, and even consider painting your cupboards vs. replacing them altogether (if they are in good condition). By keeping your budget in check, you are more likely to see a high ROI than if you go for top-of-the-line everything.

 

Installing An Inground Swimming Pool

Everyone loves the thought of a pool. However, in reality, they can be incredibly expensive to install and maintain and they have often been considered a liability.

 

Before moving forward with a pool install, it’s important to understand that you likely will not recoup all the money that you put into it. Especially in a climate like we have in Ontario, with seasonal limitations on when this can be enjoyed, and the opening/closing process can be seen as a potential headache for some buyers. If you are thinking about being in your home long-term, then this might be the perfect investment from an enjoyment perspective, but if you are thinking solely on home value then you would be better off with a bathroom renovation.

 

Adding On With An Addition

Let’s preface this next section with a disclaimer. Deciding whether or not to go forward with an addition can largely depend on the neighbourhood you are in. For example; if you live somewhere like Seagrave or another community on Lake Scugog, you may have noticed a large portion of your neighbours adding onto the square footage of their homes. Many of these homes started out as cottages and are now being converted into four-season family dwellings. In this case, you will likely get the ROI on your renovation costs, with all homes collectively driving up the value together.

 

Now, to the cautious side of adding onto your home with an addition. If you live in a neighbourhood of all 1,200 square ft. starter homes, adding square footage to your home might just be a lost cause. You don’t want your home to stick out like a sore thumb. In this case, you would be better off by renovating the inside of your home and even consider making some layout changes to maximize the space and make it more functional.

 

Home Renovation Recap

Going big with home renovations isn’t always the best thing for your home. Before you start any large renovation, we recommend chatting with a real estate professional, having your home appraised and evaluating what price point will get you the best value for your home, and most importantly, return on your investment. It is also really important to make and stick to your home renovation budget.