ith home improvements still on the rise, it is imperative for you to know how to maximize your design dollars and get the best bang for your buck.
Before making the decision to renovate you should ask yourself what lies behind your motivation to spend your hard earned dollars on that reno. If the changes are necessary, such as plumbing or electrical work, the decision is easily reached. These are expenses that should be spent in order to maintain the integrity of the home. Perhaps you're tired of your 80's formica counter or maybe it's as simple as the need to keep up with the Jones'. Thinking about the motivation and understanding your needs are the first steps in keeping a renovation from bankrupting you.
The larger the reno, the more attention you should be paying to the ability to recoup your investment. According to Remodeling, a popular online authority on the renovation industry, an average kitchen renovation will cost you $57,215 while an upscale version is a whopping $111,794. The same Cost vs. Value Report suggests that the modest kitchen reno will recoup 72.1% of the overall cost and a 63.2% recoup for the upscale version. This valuable information reveals that bigger is not always better, at least not in terms of return on investment.
The length of time you plan to live in your home after your renovation is complete is also an important factor in determining how much you should spend and how to spend it. If your dream kitchen is coming in at six figures and you plan to enjoy it for another 15 years, you may be headed for a major financial loss. Design trends change quickly and it is a guarantee that what is stylish and hip today will be dated and ready for a revamp in 15 years. That reno should be scaled down to allow the homeowners to enjoy the benefits of the reno while having no expectation of a return in 15 years.
So what are the best ways to utilize those dollars. Here are a few guidelines that will get you headed down the right path.
Planning and Research
As the old adage goes, "failing to plan is planning to fail". This couldn't be more true than in the case of a renovation. Too often a homeowner rushes into the reno without all the information they require and are suddenly overwhelmed with the additional time and costs that are required. Renos can be cut short and dreams shattered when the money dries up and the trades move on to a new project. Make sure you know exactly what is involved including timelines and costs. Do your research before you call in the architect, designer or contractor.
Energy efficient upgrades top the list of renovations that add value to the resale value of a home according to Appraisal Institute of Canada. The upgrades have been seeing a 61% recovery rate as of late. The recovery rate is the likely increase in a home's value as a result of the improvement or reno. Topping the list of green renos are Energy Efficient windows and doors as well as HVAC (heating, venting & air conditioning) systems. Besides the savings you'll experience while living in the home, the perceived value is high with home purchasers as well.
Whether you're handy or not there are lots of things you can do to pitch in and save money. Standing in long lines waiting for approval on government permits is just one way a homeowner can get involved. Don't have your contractor or your designer driving to the opposite side of town to pick up tiles, sinks or light fixtures. Do what you can to keep the professionals on task and doing what they're good at as well as what they're being well paid for.
Avoid the "Why Not" Syndrome
Once again I have to stress the importance of planning and budgeting. Make sure you know what your budget for knobs and pulls is before you hit the store and go crazy. A $10 cupboard knob might seem reasonable until factoring in the entire kitchen. Budgets often go astray when it comes to the small details. Don't go crazy, stick to the plan. The little details can be upgraded next year when you have had time to recover from the financial shock of the reno.
Above all, it should be noted that even the most cost effective home improvement will only bring you a return on your investment if your home is priced well within your current neighbourhood. If you are sitting below market value your renovation could earn you a hefty return when you sell. Conversely, an already high priced home may not bear the cost of renovation and you may not see a penny in the end.