People always ask me what are the most worthwhile home improvements they can make that will increase the market value of their home. And I start by telling them… it depends…

It depends on your goals and plans and hence, your time frame. If you’re trying to sell your property soon for the the highest possible price, your priorities are likely somewhat different that if you’re planning to stay for a few years and want to improve your family’s quality of life.

We’ll deal with the first scenario as this is the scenario that is most general for all homeowners. The second scenario is very specific to the needs of individual home owners.

If you’re selling in the near future, focus on any obvious improvements that a buyer would be most likely to undertake, not those you’re most itching to do. You might dream of putting French doors and a Juliet balcony in the master bedroom, but if your kitchen is twenty years old, you’re better off directing your home improvement dollars there. Buyers generally focus on kitchens and bathroom quality, along with overall living and storage space. Kitchen and bathroom remodelling projects are among the most disruptive undertakings, so buyers especially appreciate upgraded fixtures, appliances and decor in these rooms.

Here’s the complete top ten worthwhile home improvements projects and the percentage of cost typically recouped (“payback”) at resale (in a seller’s market).

1) PAINT, PAINT, PAINT

If you only have enough money and time to do one thing, paint. Interior/exterior painting is one of very few improvements that you will likely realize a profit. Remember to use tasteful, current neutral colours and ensure the job looks professional. Lighter intensity of colour will help to enlarge and open up the space while deeper tones will add warmth and drama. Payback: Can be as much as 300%!

2) Kitchen remodelling

Typically one of the most expensive improvement projects, and you can quickly run up a huge bill. Careful planning and shopping will help minimize costs. When remodelling the kitchen, remember to keep the project in line with the style and quality of the rest of the house an neighborhood. Just as there’s no point in putting a pricey granite countertop on dated-looking 1970s cabinets, there’s not point in installing a $50,000 kitchen in a $200,000 house. Payback: 68-128%

3) Bathroom addition

If your home has only one bathroom and is meant to house more than two people, a bathroom addition should be one of your top priorities. If most homes in your neighborhood have two, three or more bathrooms, and yours only has one or one-and-a-half, you will definitely increase your property value by adding a bath. Payback: 80-130%

4) Bathroom remodelling

Upgrading a pokey bathroom will enhance the value of your home and add to your daily comfort and enjoyment. White porcelain is the safe, timeless choice here. Payback: 65-120%

5) Finishing unfinished space

Whether it’s an attic or a basement, by finishing these spaces you add significant value to your home, increasing square footage without having to build. Payback: 50-90%

6) Window/door replacement

If your windows or doors are wasting energy or simply decrepit-looking, replacements can be an excellent use of your home improvement dollars. Stick to standard styles that suit the house; odd shapes and highly customized arrangements do little for resale value. Payback: 50-90%

7) Deck addition/improvement/expansion

Decks are one of the few exterior improvements with any significant return, apart from painting. Payback: 65-90%

Additions of bedrooms, family rooms, sunrooms, conservatories, garages, etc.

Increasing square footage is almost always an excellent use of remodelling dollars, but don’t expand your home so much that there’s little outdoor space left. Payback: 50-83%

9) Home office remodelling

This project is becoming increasingly popular. Be sure to plan for plenty of electrical and cable outlets to accommodate all the required machines and gadgets. Payback: 60-73%

10) Energy efficient retrofits

If your primary concern is return on investment, proceed with caution. Some retrofits, like better insulation and high efficiency furnaces, pay for themselves relatively quickly. Others, like solar panels, heat recovery ventilators, and tankless water heaters, may take years to pay for themselves. Payback: highly variable

Two projects that are unlikely to pay off at resale are: swimming pools (which may even adversely affect your property value) and excessive landscaping (buyers may admire it but few will pay extra tens of thousands even if that’s what you spent to improve the grounds). And remember that badly done remodelling/renovation projects will cost you in two ways. You won’t pay just for labour and materials; you’ll pay when buyers see a project that has to be redone.

Source: HGTV.ca.

For more information on renovation ROI according to the Appraiser’s Institute of Canada (AIO), visit AIC All-in-one Worksheet for a worksheet that will help you determine your renovation return on investment.

Oil on canvas.

Oil on canvas.

Oil on canvas.

Original oil on canvas.

Oil on canvas.

So how do you see past the bad decor, horrid paint colours, clutter and all the other repairs that need doing…

Well, if these are the only things that need addressing, then you’re in luck. The ideal fixer-uppers are those that require mostly cosmetic improvements – paint touch ups, drywall repairs, floor refinishing – which generally cost much less than what they return in market value. New lighting fixtures, doors, window shutters and siding, as well as updated kitchens and bathrooms, are also lucrative improvements.

Falling in between structural and cosmetic renovations are major additions needed to bring the house in line with its neighbors, such as a family room or third bedroom in a community of three bedroom homes. Such projects usually cost as much or more than they return in market value (the exception to this is adding a bathroom, which can be worth twice as much as its cost).

Sometimes it’s possible to fold cosmetic improvements into a structural repair to increase the value of a fixer-upper. If you’re replacing the roof, for example, you could add a skylight at the same time. Or you could install a bay window where there was dry rot in a wall. But you also don’t want to “overimprove”: For maximum resale value, remodeling investments should not raise the value of your house more than 10-15% above the median sale price of other houses in your area, according to the National Association of Home Builders.