Most of us—Tom and Katie, if you’re reading this, skip to next blog posting—care about our home’s resale value, even if we’re not planning to move anytime soon. We renovate for more space, to update appearances and to increase the value of the house. With the proliferation of home reno TV shows and magazines, homeowners are renovating more than ever before, fixing up rather than selling. Canadians spent $9.2 billion on renos in the first quarter of 2007, an increase of more than eight per cent over last year, according to Statistics Canada, with similar growth in the U.S.

When it comes to return on investment, not all renos are created equal. Some huge investments (installing a swimming pool, for example) curry zero ROI, while seemingly simple and inexpensive quick-fixes (painting kitchen cupboards) instantly up the ante when it comes to resale value. According to the Royal LePage Renovations and Returns Survey, released this week, the top three ROI renos are interior painting, installing hardwood flooring and kitchen upgrades.

The survey ranked renos according to approximate cost and approximate ROI, grouping projects by DIY and jobs that likely require professional help. In the DIY category, painting the interior ($1,000) curries a 50 to 100 per cent ROI; replacing carpeting with laminate ($2,000) is 50 to 75 per cent ROI; and installing new light fixtures ($2,000) has about 60 to 70 per cent ROI.

In the professional section, installing an additional bathroom on the main floor (less than $5,000) has a staggering 80 to 100 per cent ROI; renovating existing bathrooms ($6,500) equals 75 to 100 ROI; and a kitchen reno ($13,500) offers the same 75 to 100 per cent ROI.

The survey outlines 11 upgrades, from simple to complex, that will increase your home’s value. You can read the details yourself here.

Of course, Royal LePage isn’t the first organization to look at home renos and ROI; the web offers an abundance of surveys, some more applicable than others depending on location and climate. Here is a small assortment:

Kitchen design blogger Laurie Burke has a great post on her page, talking about Fidelity National’s Cyberhomes site that allows you to check ROI according to your zip code. You can discover, for example, that if you live within, say, 10 miles of Matt Damon in South Beach, Florida, and you decide to renovate an existing bathroom, the $6,500 spent will increase your home’s value by $8,765. Not bad at all.

Utah blogger Chris Pearson outlines the top 3 rooms to invest in here. He also warns against “over-improving” your home to the point where it doesn’t fit in with the neighborhood and is actually hard to sell. Neverland Ranch, anyone?

CNN warns us that some renos actually lower your home’s resale value. Swimming pools, boxy additions and trendy finishes or fixtures like a 40-jet, Eliot Spitzer-worthy hot tub, are costly to install, have low ROI and might just have your neighbours thinking you never left 1974.

Renovating your home can be an exciting and rewarding process. Whether you are making modest changes in one or two rooms, or you are transforming the entire house into a dream of a lifetime, the process can be pleasant and smooth, if you take the time to plan your project carefully.

The Renovation Council of the Greater Vancouver Home Builders’ Association (GVHBA), suggests that homeowners can ensure a successful renovation if they follow these 10 steps:

1. Do your homework. Advance research is the key to getting what you want. Study magazines and books to get an idea of the look you want. Visit friends, family members and colleagues who have renovated recently. Consider your lifestyle and the needs of your family, both in the short and long term.

2. Find out how much you can afford. Once your have a firm idea of the kind of renovation you would like to undertake, it is time to decide how you are going to pay for it. If you are thinking about using outside funds, discuss your borrowing needs and options with your lender. You will probably find that there are many financing possibilities to consider, from personal loans and lines of credit to home equity loans and homeowner’s mortgages.

3. Look for a professional renovator. Ask family and friends for recommendations. Drive around your neighbourhood to see who is renovating, then talk to the homeowners about their project. Most people are delighted to share their renovation experiences.

4. Get estimates. Obtain two or three different bids; more are usually not required. Make sure that you provide all the renovators with the same detailed information. It is important that they bid on the same job, or you will not be able to compare estimates. This information could be a description of the job including sketches, drawings, photographs and measures.For estimates involving major structural changes such as additions or moving interior walls, renovators may also need a set of plans. An architect could be a great help here. The set of plans includes site and floor plans, elevations and detailed drawings. The plan forms the basis for the estimating process and will also be used to obtain building permits. Be honest and open about your budget. The renovator will be able to make suggestions that will help you stay within your budget or provide alternative ideas to stretch your dollars.

5. Check references. Don’t omit this step just because you are too busy or “they seem like the right person for the job.”

6. Work out a contract. Don’t automatically take the lowest bid, unless you are certain that the renovator has properly understood what you want. Sometimes low bids turn out to be the most expensive in the end. When you accept the renovator’s offer, it’s time to write up a contract. Even the simplest of jobs should be outlined in writing because the contract is the basis of understanding between you and your renovator. Before signing a contract, read it carefully. Are you satisfied with the description of the work to be done? Does the payment schedule include holdbacks? Are the responsibilities of the renovator clearly spelled out? Remember that if something is not in the contract, then it’s your responsibility. Have a lawyer examine the contract before you sign it.

7. Plan how you will live during the renovation. Careful planning can greatly minimize inconvenience of living in the midst of a renovation. Talk to your renovator about the schedule of work to be done and how your daily routine might be affected. For instance, will the water be turned off for any length of time? Do you need to set up a temporary kitchen elsewhere in the home? Can major work be done in stages so as you always have a livable space? Discuss your expectations of the work crew and determine the work environment. The crew needs access to washroom facilities, telephones, water and electricity. Decide which areas of your home are off limits. It is a good idea to let your neighbours know that you are going to be renovating. Show them your plans and explain how long the work will be going on.

8. Establish a good working relationship and mutual trust with your renovator. Renovators and homeowners agree that a good working relationship is a vital ingredient in successful renovation projects. Keep lines of communication open at all times. Expect a brief report on the progress of your job at regular intervals, perhaps every evening. Be available to make decisions when they are needed so work is not held up, perhaps costing you more money. Don’t hesitate to bring your concerns to the attention of the renovator.

9. Try to stick with your first choices. Once work is underway, changes should be kept to a minimum. The details of your project are described in the contract, down to the finishing touches, from the basis of both the price and the schedule of your job. Changes could affect both significantly. Your GVHBA member renovator, however, wants you to be satisfied with the final result, and will likely attempt to accommodate any alteration in plans, as long as you accept a possible delay in completion and/or a change in price.

10. Be prepared to enjoy the results. Research, good planning, a professional work crew and open communication and trust, a recipe for a home renovation that you will enjoy for years to come!

Article complements of the Greater Vancouver Home Builders Association http://www.gvhba.org/

for more information please visit their web site.

posted by Nikki Rollins nrollins@homerenovationguide.com

Congratulations! You have decided to purchase a home, or are thinking about buying one. With this choice, you’re joining the ranks of hundreds of families who realize that home ownership offers a number of benefits, including building equity, saving for the future, and creating an environment for your family. When you own your home, your hard-earned dollars contribute to your mortgage, not a landlord’s. The equity you earn is yours. Over time, your home will increase in value.

In this Home Buyer’s Guide, you will find the information you need to make a wise buying decision. We will take you through the planning process step-by-step, to help you determine which home is right for you. You will find a host of informative articles on mortgages, viewing homes, the offer, closing details and moving.

Pre-shopping
Before you start shopping for your home, why not give some thought to your lifestyle, the features you need and want, affordability, and the neighborhoods you prefer. With the information you will come closer to finding your perfect home – sooner!

Arranging a mortgage
Most people require a mortgage to purchase a home. This section explains the elements of a mortgage including type, terms, and how to qualify for one. In addition, choosing the right mortgage for your needs can help you retire this financial obligation sooner.

Viewing Homes
This section gives you some advice on making the most of your viewing experience. When you separate emotion from facts, and the condition of the house, you will be in a better position to purchase a home that meets both your needs, and your budget. You can also avoid any costly errors that could lead to future problems.

The Offer
This section explains the components of an offer and how it forms an essential part of your purchase.

Closing
Buying a home is a complicated process involving a buyer and seller, and lawyers for each of these parties. This section will explain the importance of a home inspection, title transfer, appraisal, and surveyor, to ensure you are legally protected.

The Move
While moving is inconvenient and disrupting there are some ways to make the move more manageable. You might even save some money in the process.

**Article and information courtesy of:

Justin Havre & Associates are a dedicated team of professionals with access to all of Calgary’s real estate opportunities. Be assured of a quality, comprehensive experience with these award winning realtors working for you.

Chris Paulsen
cpaulsen@homerenovationguide.com