Deciding whether you should renovate your existing home or purchase a new one? This is a common question and I will try to help you look at both sides. I have prepared an example of approximate costs that you are likely to recap on specific renovations.
There are many different reasons people want to renovate. People may want a lifestyle renovation like a sunroom or finishing off a basement. They may want envelope or systems projects like more insulation or upgrading your furnace, or they may just want to perform preventative maintenance on their home. Out of these we are going to focus on the lifestyle renovations.
Here is the approximate payback range of a typical renovation:
- Kitchens - 68%
- Bathroom - 64%
- Interior Painting - 64%
- Exterior Painting - 62%
- Main floor family room - 50%
We are often asked about adding an in-law suite (check your local office for city conformity) which usually has return on investment of only about 40%.
In looking at these options, you have to decide on the length of time you will be in your home compared to the cost. For mechanical additions like a heat pump you may end up paying $5,000 up front, but with the cost savings over 5 years you will probably have recapped most of the cost. In those scenarios, you can calculate your costs savings much easier then with an addition. If you are planning on moving within 3 years, you might not get the return you expected.
When comparing this to buying a home, you need to look at the local market conditions and see what the general trend is. If the market is increasing, you may need to look closer at a renovation and decide whether it’s worth it.
Contact your WorldReferrals expert for more advice about your local market and the general maintenance guidelines for your area.
Joseph Talbot, ASA
Remax Clearview Inc. brokerage
Check out more at
This article was provided by www.worldreferrals.com