When it comes to home renovations that provide a good return on investment, the first things that often come to mind are kitchens and bathrooms. But renovating these areas of your home won’t always return a dollar for dollar increase in sales price. While turning your old, dated kitchen into a glossy and bright centerpiece of your home will certainly improve your enjoyment of your home, it’s not always clear whether you should invest tens of thousands of dollars in a kitchen renovation just before listing.
Before you dive into a home renovation to boost the selling price of your Toronto townhouse, condo, or detached home, be sure to do your research. Check out our tips below.
Did Your Neighbours Renovate?
The first step in planning a home renovation right before selling is to consider what’s typical for comparable homes in your neighbourhood. You can get a feel for the average home in your neighbourhood by researching real estate listings for homes of a similar age and square footage. If you’re already working with a real estate listing agent, they can also provide you with comparable sales information for other homes that have sold in the area. Ideally, you’d find one or two that have renovated kitchens and one or two with older, more lived in kitchens. Compare their listing or selling prices to the listing price you have in mind.
Based on this research, determine (with the help of a real estate agent) if your home will appreciate in value after the renovation, or if it will seem over-priced relative to other homes in your neighbourhood.
Don’t Over Improve
While your initial research may support the idea of renovating your kitchen, it’s important not to over-improve your home. Don’t invest in granite if the houses in your neighbourhood have butcher block countertops. Don’t spring for a double wide gas range with pot filler if the homes around you have builder basic stainless steel. These improvements won’t translate into dollars on the sale price, and will likely blow any hope you had of seeing a return on your investment.
Go for Mass Appeal
Keep in mind that renovating a kitchen for resale is very different from a home renovation for your personal enjoyment. The point of this renovation is to appeal to a wide variety of potential buyers, so it’s important to stick to choices that will appeal to the mass market. Choices like cabinet colour, appliance finishes, and flooring will make or break your ROI. If you choose something unpopular, like oak cabinets over white, or laminate flooring instead of ceramic, you could end up turning buyers off more than a dated kitchen that they can imagine renovating to their unique tastes.
Related Read: How to Profit From a House Flip
Small Projects, Big Impact
Contrary to what some television shows would suggest, home renovations don’t have to be “go big or go home”. If you don’t have the budget for a big reno or your market research suggests a full-scale remodel might not be the best idea, you can still improve the selling price of your home by doing small-scale updates. Smaller projects like refacing your kitchen cabinets or adding a subway tile backsplash may have the transformative effect you’re hoping for without the big price tag.
Focus on Cosmetic Improvements
If you’re sure that upgrading your kitchen or bathroom is an important part of your selling strategy, make sure to focus on cosmetic improvements. These are the improvements the homeowner is sure to notice, and this is what will drive the increased price. Improvements such replacing old linoleum flooring, upgrading appliances from white to stainless steel and painting the walls are a good place to start.
Avoid rearranging the kitchen’s layout as the cost of rerouting power and plumbing is expensive and may not even be noticed by potential buyers. Only make these types of changes if there are serious issues with the existing layout that could affect your sale.
Consider Spending Elsewhere
No matter what your research tells you, investing thousands of dollars into a home renovation right before selling your home is a risky proposition. You’ll have to choose finishes and appliances to appeal to a broad audience, and at the end of the day, there’s no guarantee you’ll get your investment back. That said, there are other ways to improve your home that will almost certainly help your home fetch top dollar.
These renovations include painting the whole house with neutral, buyer-friendly colours, changing out old gold light fixtures and door handles, and updating light switches to bright white instead of almond. These small changes will make your home more buyer-friendly without costing you tens of thousands of dollars.
