Did you consider the ROI on that next renovation?
Whether you're planning on selling your home in the next 2-3 years or not for another 10-20 years, you should always consider the Return on Your Investment when doing a renovation. Typically, you don't want to spend $150,000 on a kitchen renovation if your house is only worth $375,000! You will never see an ROI on that kind of renovation.
Now I should qualify the information you read in this post. ROI should always be a priority. However, if you are planning on staying in your home for 10+ years, I always tell our clients that the renovation should reflect your needs and wants, and although ROI should be a consideration, make the home the way you want it to be.
The example I gave above with the $150,000 kitchen renovation was a true story! Our clients lived in a home that at the time was worth about $375,000. They wanted to do a massive kitchen renovation which included removal of two load bearing walls, new tile flooring throughout the entire main floor, tripling the size of the kitchen by expanding it into their dining room and breakfast area, installing two stoves, two ovens, 3 sinks, two bar fridges and a wine cooler.
This was a HUGE renovation with a high price tag! They would never see an ROI on this project. We politely made them aware of this but then had a discussion about their long term plans in the house and why they were considering this kind of renovation. Our clients planned to stay in the home for at least another 15 years or more.
They entertained business clients a lot and needed to create a space that would accommodate this. With their son moving out to attend university, it was the perfect time to make the main floor into an entertainment haven. They weren't at all concerned about ROI. They just needed a space that would fill their current needs.
About fads and trends
The two best areas to invest money for renovation project are the kitchen and bathrooms. You will get 75%-100% ROI on those projects. Stay away from fads and trends that won't last in order to ensure your renovation won't have to be re-done again in 7 years because it's already out of date.
For example, grey kitchen cabinets are a trendy thing right now but they likely will already be out of style 5 years from now. Stay with white cabinets and then decorate your kitchen in whatever colours you prefer.
Upgrading your flooring will also provide about a 70% ROI. Make sure you select flooring that's durable and neutral. Hardwood flooring can provide you with an 80% ROI.
Outdoor living renovations can yield a high return on your investment. In almost all areas, exterior renovations have an excellent ROI. An outdoor kitchen can return 100 to 200 percent, while new patio stones or a new deck return about 60 to 75 percent.
Surprisingly a relatively inexpensive renovation plan can yield high results. If you're planning on selling within 6 months - 1 year, putting a fresh coat of paint throughout your home can yield 50%-80% ROI. Talk to the experts at paint stores such as Sherwin Williams to find out what the best choices of neutral colours are for your home.
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