Enhance your house so the money comes back
By Vivian Astroff
It often happens at a “home” show in the dead of winter. Wandering among displays of upscale bathroom spas, we’re bitten by the renovation bug. While driving home, we daydream of lounging in our own bubbling Jacuzzi tub or taking a soothing steam shower surrounded by earthy tiles and rich wood. We feel the warm glow from the spa fireplace and imagine sipping on a glass of cool Merlot. Is this an over-the-top fantasy? Or the blueprint for a sensible renovation project that will give us real pleasure every day while boosting the resale value of our house?
Residential designer Suzanne Martin, owner of Reno by Design, says there are three main reasons for renovating: updating a house, improving functionality, and creating more space. “Most of my clients renovate for the long term to make their home healthier, more efficient and enhance their lifestyle, and not so much for resale,” she comments.
In the industry, a “small” renovation indicates a job under $30,000; while a medium-sized project could range from $30,000 to $150,000. So with the cost of even a modest bathroom renovation running over $10,000, deciding what to spend becomes a complicated process.
Is a renovation truly an “investment” you can recoup one day, either in part or in full, when you sell your house?
A realtor can be very helpful in sizing up the many factors that determine the price of a house, including competition, time of the year, and the local housing market in general. So before raiding your bank account, look at the resale values of other houses in your neighbourhood as a guide, counsels Eric Vani, a real estate agent with Sutton Group Realty. If there are new developments in the area, tour the model homes to see how yours compares.
“Think of a baseline standard,” Vani advises. “You can easily get into super-improvement for your neighbourhood. If you over-improve, you may never get your money back.”
Ottawa renovation expert Mike Martin, the owner of Luxury Renovations, says that if you have a limited budget, first deal with basics like an efficient furnace, good quality windows and doors, a sound roof, cement parging on the exterior where needed and other “housekeeping” items that ensure your home is in good shape overall. Then think about how long you expect to live in the house.
According to conventional wisdom, money is well spent remodeling a kitchen or bathroom to reflect current trends, which typically change every five years.
“They say you can get back 75 to 100 per cent of the cost of a new kitchen and almost the same on a bathroom renovation in five or six years,” Martin says.
Other desirable features that can add value are fireplaces, stainless steel European appliances and finished basements, he adds. However, whatever projects you undertake, make sure the workmanship is first rate. Consumers schooled by TV reno experts won’t tolerate “quick and dirty” jobs, Martin warns.
“Your best selling feature is quality work –well finished trim, smooth drywall, quality paint that doesn’t show finger marks, and for cabinetry, hardware like pewter handles and brushed nickel hinges.”
Interior designer Linda Nolan, whose experience spans 37 years working on new homes and renovations, observes that hardwood floors and granite countertops are two of the most popular upgrades because Canadians love the warmth of natural materials. As well, high quality finishes have a timeless quality.
“Hardwood flooring is a great investment,” she adds. “You will cover your cost and maybe even realize a premium in a resale.”
However, wood isn’t suitable for every situation, so Nolan suggests homeowners carefully examine all flooring options in the marketplace, including less conventional products like leather tile, bamboo and cork.
“The flooring is probably the most important, expensive investment in your renovation, so you want to make the right decision,” she says.
Whatever the features, if you have resale in mind, it’s best to go neutral, experts say. Outlandish colours or designs will have limited appeal. The more mainstream your taste, the better. For example, Nolan says the current preference is for the California look of whites and beiges, with medium contrast in flooring shades.
Now why is it that the real estate pages these days rarely have an ad offering to sell a “handyman special?” Because unlike several generations ago, few people have the time or skills to undertake major renovation work themselves.
In fact, buyers will often pay a premium for a “turn-key” situation, says realtor Patrick Morris of Royal Lepage, who speaks from almost 40 years’ experience selling homes in long-established neighbourhoods like the Glebe and Westboro.
“Young families busy with childcare responsibilities and careers don’t want to deal with renovation contractors. They want to move in and go out for dinner the same day.”
Kitchens and bathrooms are the magnets of any property and should be updated regularly, Morris points out. He advises using quality products. Many high-end materials like granite and quartz have come down in price somewhat because of increased demand and even if used sparingly, add a luxurious touch.
In older houses, finished basements are popular because they increase the living space. But forget about the drafty or overheated rec-room of your childhood.
“The space is totally insulated with perfect heating and cooling,” says Morris, and many basement renos include wine cellars and luxurious home theatres. While adding space to your home is a sound investment, you won’t likely get your money back on building a wine cellar, sauna or swimming pool. These goodies may appeal to your family, but may not be attractions for others.
According to realtors, double-paned, energy-efficient windows are high on the list of renovation must-do’s, and you can expect to get back at least 80 per cent of your cost. But don’t skimp on quality, they warn.
Dave Sprung, sales manager at Ottawa Windows and Doors, often sees the results of installing cheaper products in new housing developments. For example, cheap windows show premature signs of failure, sometimes within only a few years. They may not open and close properly, the thermal pane seals may have failed, allowing condensation to collect between the two panes, and there may be signs of mold.
In his 12 years in the business, Sprung says he’s seen wooden window frames rotted like mush, and five-year-old vinyl frames with more ice buildup inside than outside.
“It’s really a combination of current building practices and lower manufacturing standards in recent years in an intensely competitive industry,” he says. “Logic tells me that you shouldn’t have to replace the windows and doors in a newly-built house for well over 20 years, but in some new housing developments with poorer quality products, windows have a five- to 10-year life expectancy.”
On the other hand, he points out that most houses from the 1960s in neighbourhoods like Alta Vista have windows with wood frames that are still in sound condition after 50 years.
“The frames are made of solid lengths of wood rather than with multiple pieces of wood, a practice that the industry adopted in the late 80s for cost reasons.” The latter type of construction allows moisture to seep in, he explains.
Today vinyl frames represent about 75 per cent of the windows sold and those at the low end are simply cheap plastic, Sprung says. It’s common to believe that “a window is a window,” but whether the frames are wood or vinyl, both come in a range of qualities, reflected in their price.
The cost to replace all the windows in a house can run between $15,000 and $20,000, although they may not all need replacement at the same time. Sprung believes that any reputable firm should walk around with you to examine each window, advising you of their actual condition.
As in making any major purchase, he advises prospective buyers to look for a company with a solid track record, a high rating with the local Better Business Bureau and in-house rather than subcontracted labour.
Finally, curb appeal is something to keep in mind when planning a renovation, especially if resale is on the horizon. Although you may not recoup your expenses directly, good looks always count.
Features that add to curb appeal are a tasteful door and entranceway, a well-kept lawn and attractive landscaping, fresh paint inside and out, new carpeting and if you need them, new appliances.
So now it’s time for a reality check. After compiling your renovation wish list and working out detailed project costs and time-lines, you have a sinking feeling and a massive headache. The so-called investment is about half the current value of your house.
But then again, you imagine the pleasure of lounging in your home spa. It’s hard to put a price tag on that.