The renovation business is booming. Everyone is remodelling, which is one of the reasons it's so tough to find a good contractor.
Magazines and television shows inspire people to update. Big-box stores are full of great home-renovation products and offer easy financing and seminars for homeowners. No wonder everyone wants to improve their residence - I heard recently that about 10 per cent of Canadian homeowners are planning to make changes to their houses.
Since the average home renovation in this country costs about $15,000, there's a lot of money involved - to pay contractors and subtrades, and buy paint, tools, flooring, lumber, hardware, appliances and a ton of other supplies.
Why are you renovating?
Renovations increase the value of your home, but you need to think about why you're doing it. Is it to improve your home so you can enjoy living in it, to save money by adding energy-efficient windows and insulation, or to make money?
A lot of people are in the last category - and they can be making a big mistake because they often spend their entire budget on things such as finishes and decor, and don't think about what holds their house together, and keeps it dry, safe and standing.
IS IT A FLIP?
Some houses are renovated so they can be "flipped" for a profit. I love to renovate houses - I love to help people improve their homes, to make their dreams come true. And I think a lot of flips are crap.
In my experience, many people who do this are only interested in how the project looks. In order to maximize their profit, they do cover-ups - lipstick and mascara - and then move on, leaving the sucker who bought their house with a big problem - one that might not be discovered for years.
Nobody wants their renovation to bring the value of their house down. Obviously, you want your house to look good, and when it comes time to sell it, it's nice to make a profit. But, if you're renovating with an eye to selling, make sure you aren't just covering up problems. Fix what needs to be done right; take care of the basics - plumbing, electrical, insulation, and heating ventilation and air conditioning. Make the house better than it was when you bought it. Then once you've done that, make it look good.
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WHERE TO PUT YOUR MONEY
Kitchen and bathroom improvements increase the value of your house more than most renovations and offer the highest average return on investment.
The kitchen is the heart of a home - people gather and spend a lot of time there, so renovations that improve that room are a good idea.
Adding living space - either by finishing an unused basement or putting an addition on your home - is the second most popular reason to renovate.
Exterior projects make up almost 40 per cent of renovations and can include installing siding, a roof, deck or patio; improving the foundation; landscaping; fencing; building a garage; painting the exterior; sidewalk or driveway work, and making improvements to the gutters or eavestroughs.
With some renovations, you'll make back what you spend on the upgrades, plus a profit when you go to sell. But that's assuming the work is done well by a skilled contractor, using quality materials. A bad job might reduce the value of your home.
COSMETIC OR PRACTICAL?
Not every renovation you do on your house will give you the same return on investment if you're doing it to sell. You might replace your roof and windows and fix the foundation - and that's the right thing to do.
Practical renovations are smart and worth the investment in the long term.
Unfortunately, a lot of home buyers don't get that excited about these very important points - but a new granite countertop and stainless-steel appliances will impress them every time.
I think that the best reason to renovate your home is to enjoy it. Your home is not just an investment. But if you are renovating to sell, use quality materials and hire professional, skilled people to do the job right.
Mike Holmes is the host of Holmes on Homes on HGTV.