If you’re looking to renovate as an investment, RTA Contracting in Calgary shares these tips:
1. Remember that kitchens and bathrooms are valuable.The two main renovations that are most attractive to home buyers are kitchens and bathrooms, especially kitchens. You can recover over 80 percent of your kitchen renovation, according to this report. That renovation can literally add thousands of dollars to the value of your home. There is also value in marketability. A home with a stunning kitchen will stand out in a crowd of so-so kitchens on the market.
A bathroom renovation, or adding a bathroom where there wasn’t one before, can also be a smart investment. Buyers typically want homes with two or more bathrooms. A master ensuite is always a plus. If you have the space for a bathroom addition in your one-bathroom home, it might be worth the cost to build.
2. Don’t over-renovate for your market.Think about your target market. If you live in what would be considered a ‘starter home’, be careful not to over renovate it. Splurging on expensive natural stone countertops and other high-end features might not be worth it if every other home in that target market is selling fine without them. No one will pay $400,000 for a house in a $300,000 market, even if it has marble countertops. Make sure you don’t renovate yourself out of your specific market.
Look at other homes for sale in your neighborhood. What kind of renovations have they done? How much are they selling for? This can give you a good idea of how to be a strong competitor in your market without overdoing it with unnecessary spending.
3. Set a reasonable budget and stick to it.Not having a clear budget can lead to overspending. Overspending will lower your return on investment on any home renovation. Think about the purchase price of your home, the total cost of the renovation and the price you might sell your home for in the future. How much can you spend and still make a profit on the sale of your home? What kind of renovation can you do with that amount?
The biggest mistake novice renovators make is to underestimate costs and go over budget. When you work with a full-service renovation company, they will help you put together a budget that includes the things you want. Your cost-estimate should include everything from materials and labour to inspections and permits.