Home renovating now a national pastime
The entertainment industry has found a new spin on reality
shows that has been surprisingly successful: home renovations.
The toolbelted contractors on television are unlikely stars,
but their home improvement message has helped fire up the
imagination of a whole generation of Canadian homeowners!
According to Statistics Canada, Canadians spent almost
$30 billion for renovations in 2005. That represents more
than 40% of the total dollars spent on residential construction.
We're renovation-obsessed, and we show no signs of slowing
down.
According to a recent survey by TD Canada Trust, more than
a quarter of those surveyed had a plan for renovations in
the coming year, and most were planning to strap on the
toolbelts themselves.
So where are we spending our renovation dollars? A gourmet
kitchen tops the list of "dream renovations" for
most Canadian, and that's also where they tend to spend
the most renovation dollars (with bathroom renos coming
close behind in popularity). According to the Appraisal
Institute of Canada (AIC), homeowners are probably making
the right decisions on where to spend their money; kitchens
and bathrooms are at the top of the list for renovations
most likely to provide a return on the money invested (returning
75% to 100%).
Think that a renovation will increase the value of your
home? It's a nice thought, but just not a sure thing. In
fact, there are very few renovation projects that will return
more than 100% and pay you back more than your costs.
Painting may be the exception. While it doesn't have the
power-tool appeal of knocking down walls, it can be almost
as impactful. In fact, the experts consistently agree that
painting pays: money spent on a great paint job is almost
always money well spent, whether it's inside or outside.
In the grand scheme of renovations, painting is a low-cost
activity, but it can have a big impact on the look of your
home.
Still, it's good to know that not all renovations are created
equal: some will provide you with some payback, and others
are rather notorious as "money pits" for homeowners.
The AIC says that the best renovation projects are kitchens,
bathrooms and both interior and exterior painting. In the
mid-range category (returning 50% to 80%) are more mundane
projects like re-shingling the roof or improving the heating
system. Slightly further down on the list are recreation
rooms, basement renos and adding a fireplace. New flooring
also falls into this category (hardwood floors in kitchens
are a big trend, according to the TD Canada Trust survey).
At the bottom of the list for payback are skylights and
swimming pools.
It's clear that renovating to add value to your home is
a tricky business. It can work if you're a talented do-it-yourselfer,
if you keep your costs down, and if you don't over-improve
your home. The next buyer is less likely to see value in
your honed granite countertops if all the other homes in
the neighbourhood are sporting laminate. From the standpoint
of investment, you actually many not want to have the nicest
house on the block.
But playing your own version of Trading Spaces can be a
great way to increase your enjoyment of your home. Though
they might not be making their owners big bucks, certain
home renovations are popular projects because they improve
the quality of life of the families that live in the homes
now - not because they might be attractive to the next buyer.
The popular television network HGTV (House & Garden
Television) recently released its list of top renovation
trends. The list included projects that are unlikely to
make the "top payback list" any time soon -- including
the family home theatre, the main-floor laundry room, whirlpool
baths, built-in kitchen appliances and home offices. Sounds
great, doesn't it? Just consider family movie time, a shorter
hike to do laundry, your own relaxing spa experience and
the chance to work from home.
No wonder we've become a nation of renovators - turning
the houses we have into the homes we want. And why not?
There's never been a better time. With a wide range of financing
products available to homeowners right now, Canadians have
the tools available to make their renovation dreams come
true.
If you've built up some equity in your home, then you probably
hold the key to unlock the financing to make your home renovation
possible. In today's great interest rate environment, homeowners
aren't renovating just because they want to… but also
because they can.
