So, you want to speculate to accumulate. In Real Estate, there sure are dollars to be made. But, (you knew that ‘but’ was coming didn’t you?!), you need to be wise about what projects you sink your money into, to ensure you get the best possible return on your investment (ROI).
Some improvements carry a huge price tag and provide almost zero return (such as installing a swimming pool), while simple and inexpensive changes can make a big difference to resale value (for example painting walls in neutral colours).
Note: If you’re renovating your ‘forever home’, then the decision to invest should be balanced with your family’s potential enjoyment of the home, rather than simply based on ROI.
Probably the easiest yet most rewarding in terms of return on investment is painting. Why? Because erasing your stamp on a home by neutralizing the space allows potential buyers to imagine themselves living there. It’s incredible to think that $40 spent on a can of paint can potentially impact your bottom line by thousands of dollars.
In 2008 Royal Le Page published the results of a survey showing which renovations brought the best Return On Investment. You might be surprised by the results!
- Install an additional bathroom on main floor: 80-100%
- Replace knobs and hardware: 75-100%
- Paint the interior: 50-100%
- Renovate kitchen: 75-100%
- Renovate bathrooms: 75-100%
- Replace carpeting with affordable laminate: 50-75%
- Install new light fixtures: 60-70%
- Update the entryway: 50-75%
- Replace carpeting and laminate with hardwood: 50-75%
- Build a fence/deck: 50-75%
If you’re undertaking a full property reno, to get the biggest ‘bang for your buck’ it’s critical to concentrate on the cosmetic aspects of the property that buyers see. Your target market are buyers who can’t be bothered to renovate or don’t know how – and they’re looking for a house that they can move straight in without any immediate work.