How to make Money Renovating your Home
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How to make Money Renovating your Home
There are roughly 40,000 renovations and custom homes completed every year in the Greater Toronto Area. According to the Altus Group’s House Report from May 2018, Canadian residential renovation spending was estimated to be $77.4 billion in 2017. The report also noted that 1 in 16 homes need some sort of major work. Findings from the report lead us into this week’s topic about how you can make money by renovating your home. I will walk you through a simple process on how to maximize your return-on-investment by renovating.
First, you need to consider why you are renovating and set your priorities. Ask yourself, “Am I planning on selling my home?” “Am I renovating because my house needs too many repairs?” Understanding why you are renovating will ensure a successful project.
Second, set a responsible budget and stick to it. Don’t overspend on things that are above and beyond the standards of the other homes in your neighbourhood. For example, don’t install high-end appliances, expensive marble flooring or tiles, and expensive chandeliers in your kitchen if no one else in your neighbourhood has. If you overspend, then you will lose money. Whereas if you set and stick to a responsible design and budget, you will maximize your profits.
Third, work with a professional renovation contractor, like the ones from RenoMark. If you try to save money on your contractors’ services, trust me, your renovation is more likely to go wrong and you will eventually pay more. This might seem counter-intuitive, but a good contractor will save you time and money by working more efficiently and they use professional tradespeople.
The annual Remodelling Magazine’s Cost versus Value Report identifies what your return on investment is when you renovate the different areas of your home. In 2019, replacing your garage door has the best return on investment with 97.5 per cent. A minor kitchen renovation has a return of 80.5 per cent, while a major kitchen renovation has a return of 62.1 per cent. A bathroom renovation has a return of 67.2 per cent, while adding a whole new bathroom had a return of 60.6 per cent.
At the end of the day, it isn’t a guarantee that doing any renovation will make you more money. It is very important to make responsible decisions and work with professionals. The homes that are in more need of a renovation will have a higher return on investment versus a renovation for the style. It’s also important to not undervalue the other benefits like livability, or preparing your home for sale need to be taken into account when you are planning your renovation.
This week’s question comes to us from Julie of Mississauga: “We are planning to turn our basement into a rental property. Can we use the side entrance and stairs to go down to the basement and close it off to the main level of the house?”
Hello, Julie, this is a great question and something that a lot of people are considering to do something like this to their homes these days. A secondary side entrance is a great shortcut for people who own a home that was built in from the ’60s to the ’80s; these were often included for people to enter conveniently from the driveway versus the formal front entrance.
In terms of logistics, this is not a difficult thing to do. First, you should contact your municipal bylaw office to ensure that having a basement apartment is legal and allowed. Second, you need to ensure that the space complies with the building and safety codes. This means that you may need to get an architect and/or a contractor involved to identify if there is any work that needs to be done. This may include a building permit and city inspections. Lastly, for your own separation from your main floor living to the new apartment, I would suggest installing a fire and security door, this means that in the future if you want to use the basement again, it would be easy to integrate the basement back into your living space.