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Ian

5 Factors That Determine the Value of a Home Renovation

Ian



5 Home Renovation Tips to do before having Residential Appraisal in Toronto

If you are like most homeowners in Toronto, you have had home remodelling ideas at the back of your mind. Of course a home is the most important investment you can make in your life and as such it has to be carefully looked after. While most homeowners are renovating their homes today most don’t consider how such renovations affect the value of the property.

Only when homeowners require a residential appraisal in Toronto does the issue of renovations start mattering. While renovations without doubt add value to the property there are some factors you also need to consider. Here are some factors that should guide any home remodelling project you have in mind:

1. Cost vs. Value

This is the most important consideration when you are thinking of any renovation. It is important to understand that in a real estate appraisal in Toronto the cost of a renovation will not automatically be added to the value of your home. Instead an appraiser will determine how much buyers are willing to pay for such a renovation in the existing market. Therefore, look into renovations that have a high return on investment (ROI). For instance kitchen remodels, a new entry door and bathroom remodels have the highest ROI.

2. Invest in Energy Conservation Remodels

The contemporary homebuyer is environmentally conscious thus, they are looking for properties with energy saving features. These include solar lights, solar water heaters among others. During renovations you can also hire an appraiser to get a better sense of the expected ROI on any energy saving project you are currently doing.

3. Principal of Substitution

Assume one homeowner remodels a bathroom at a cost of $40,000. If another homeowner in the area has a similar remodel at $10,000 then the appraiser will consider the variation when determining the value of your home. In essence, the buyer cannot be expected to purchase your home at a higher price based on the remodel because it is obvious the cost of your remodel is high.

4. Maintain All Records

However minor a renovation looks make sure you use a certified contractor and keep all records. You can share these with the appraiser for review. You should also communicate freely with the appraiser especially about any renovations you have done.

5. Consider where to Renovate

If you are doing renovations outside make sure any installations are in the most appropriate place. You might install a gazebo right in the middle of your yard while most buyers would prefer to have it further from the house for privacy.

The author of this content has hand-on experience in the real estate appraisal business in the City of Toronto. In this article, he speaks about Renovation Ideas that will add value to a property before its appraisal. For further details visit http://aedisappraisals.com.

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