Can’t Relocate? Try These 4 Value-Adding Renovations Instead
With stubbornly high home prices and mortgage rates squeezing move-up buyers’ budgets, more homeowners are looking to renovate rather than move.
The 2024 Canadian Homeowner Renovation Report from Angus Reid and Financeit Canada found that 94% of Canadian homeowners planned to stay in their current homes in the following 12 months. A quarter of this group said they planned to undertake some form of home renovations over the same period.
Over half of those polled (53%) said they wanted to improve the functionality of their home. About one in five (21%) said they wanted to renovate to increase their home's value.
Before launching into a project, it’s critical to understand which home improvements offer the best return on investment (ROI) so your time and dollars are invested strategically.
Here are some popular home renovation projects that tend to recoup their cost in resale value while also adding to your quality of life.
1. Kitchen renovation
BACK TO TOPEstimated cost: $15,000 to $60,000
Typical ROI: up to 100%
Kitchens have a way of bringing everyone together, and renovating yours can add value while making it more functional and modern.
Kitchen remodelling costs vary depending on the amount of work you'd like to accomplish. Cosmetic updates might cost around $15,000, while mid-range renos might run closer to $60,000.
Whether you’re doing a complete rehaul or looking to do a simple refresh of outdated colors and appliances, a tastefully done kitchen remodel is a wise investment, says Curtis Mercer, president and owner of K & P Contracting in Flatrock, Newfoundland and Labrador.
The ROI on kitchen remodels is generally solid — often 75% to 100%.
Tips to maximize ROI
Focus on functionality: Invest in durable and easy-to-maintain cabinets, countertops, appliances and fixtures. Instead of choosing quartz or granite, consider solid surface alternatives, like Corian countertops, which are more affordable but still durable, Mercer suggests.
Update key fixtures: Replace outdated sinks, faucets, cabinet hardware and lighting for an instant facelift. Painting your kitchen cabinets can give the space a fresh look without the big price tag.
2. Bathroom remodel
BACK TO TOPEstimated cost: $5,500 to $40,000
Typical ROI: up to 80%
Bathrooms are another space where homeowners spend a good deal of time. That’s why bathroom remodels can add serious bang for your buck on resale.
The cost of renovating a small bathroom might start around $5,500 and reach as much as $40,000 if you're redoing an ensuite. These projects typically recoup 50% to 80% of their cost on resale, with more cost-conscious updates delivering more bang for the buck due to lower material costs.
Tips to maximize ROI
Replace outdated fixtures: Choose water-saving toilets, faucets, tubs or showers to improve efficiency and potentially cut costs on utility bills.
Choose timeless finishes: Select classic or transitional tile patterns, neutral colors and high-quality materials that might appeal to future buyers.
3. Basement finishing
BACK TO TOPEstimated cost: $65 to $100+ per square foot
Typical ROI: up to 85%
Unfinished basements have a lot of potential. Finishing this bonus space can increase your livable square footage, which adds value to your home and gives your family more room to entertain.
It's not cheap to finish a basement, with current costs ranging from $65 to more than $100 per square foot. But if you recoup 65% to 85% of what you put into it, and get good use out your new space, the outlay could be worth it.
Tips to maximize ROI
Waterproof the structure: If your basement is below ground, ask how your contractor plans to waterproof the space or address structural or moisture issues before work begins.
Create defined spaces: Map out how you plan to use the space and consider if you’ll need some areas to be walled in (if you want a guest room or home office, for example).
Focus on safety: You’ll need a fire exit and proper ventilation. Work with your contractor to ensure they follow local building guidelines and size and install egress windows properly.
4. Exterior doors and windows
BACK TO TOPAverage cost for an entry door replacement: $2,500
Average cost for window replacement: $800 per window
Typical ROI: up to 90% for doors, up to 85% for windows
New exterior doors and windows can enhance curb appeal, energy efficiency and comfort. Curtis Mercer, president and owner of K & P Contracting in Flatrock, Newfoundland, says that homeowners who plan to stay put and need to replace old windows and doors will also get a good ROI if they choose energy-efficient materials.
“Things that you can do to your home or while you’re doing other renovations or remodels that add a little bit of cost up front but decreases your annual energy consumption or your operating costs over time … [are] insulation upgrades, air sealing, better windows and doors and these types of things,” he says.
The cost of replacing an exterior door generally ranges from $1,500 to $5,000, while window replacement averages about $800 per window. The ROI for both projects can be quite high: 70% to 90% for a new door and up to 85% for new windows.
Tips to maximize ROI
Choose energy-efficient models: Windows and doors with low-emissivity (low-E) glass and Energy Star certification can make your home’s temperature more comfortable and cut down on energy bills.
Opt for durable materials: Storm-proof materials, like fibreglass or composite for doors, and vinyl or aluminum framing for windows, can withstand harsh weather conditions.
How to hire a renovation contractor
BACK TO TOPThe final cost of your home improvement projects will depend on labour charges. If you plan to hire a pro to do the work, these tips from Mercer can help you make a sound decision.
Get multiple price quotes. Compare pricing and services from at least three different contractors. If plumbing, electrical or other specialty services are required, you might need to hire those professionals separately.
Check their credentials. Contractors should have a valid business license and professional liability insurance. It’s also a good idea to read online reviews and request several references from recent clients you can personally contact.
Get a detailed contract in writing. Once you’re ready to sign a contract, make sure the contractor clearly outlines the scope of work, materials to be used, payment schedule, and timeline for completion.
Leave wiggle room in your budget. Renovation projects usually have unforeseen hiccups. Plan to budget an extra 20% for unexpected repairs. If you have money left over, you can always increase the scope or upgrade certain materials.
Ask about warranties and guarantees. Ensure the contractor’s warranty is clearly defined and you understand what it does (and doesn’t) cover. Ask if there’s a time limit (up to a year, for example).
DIVE EVEN DEEPER
Clay Jarvis
Beth Buczynski