Kitchen and Bathroom Renos ROI

It’s been said before: We are the generation of renovation, and with an expected ROI of 75% to 100% on a major kitchen remodel or extension (Appraisal Institute of Canada) – who can blame us?

There are two main reasons for renovating. The first is to improve your current home based on your own personal needs (not wants, needs). This is the primary reason to justify expensive projects, such as adding a second-story addition, finishing the basement, or extending the kitchen. It’s a renovation that will require a lot of work, money, and inconvenience, but will allow you and your family to enjoy the home more fully in the upcoming years.

The second reason people use to justify a renovation is that they are adding value to their home. This is a problem. Evidence shows that it’s a lot easier to rationalize spending money if you think you’re getting a rebate—and convincing yourself that your $15,000 bathroom remodel will add $20,000 in value to your home is the psychological version of a rebate. The big problem with this is that people will then use these mental gymnastics to warrant financing a renovation.

The kitchen and bathrooms are key areas that hold their value if the finishes are contemporary and neutral. However, an entire renovation isn’t always required. For instance, wooden kitchen cabinets can be easily updated by resurfacing the doors and changing the hardware. You can also modernize and update the look of your kitchen by changing the countertop and replacing lighting and plumbing fixtures. However, if your kitchen or bathroom layout just doesn’t work or your cabinets are beyond the point of resurfacing, it may be time to consider a full renovation.

We do need to point out that even the most well-thought out and contemporary remodel today will look dated in 15 years, so don’t bank on a dollar-for-dollar return on your remodel budget if you don’t plan on selling for a few decades. Still, if you’re renovating with your own family in mind, you can develop a smart plan by asking for features that are easy to update when it comes time to sell.

Source: Homeservice Club of Canada