The spring market in Canada is starting to heat up with record low inventory. Buyers have started to come back, as for the first time in the last few months Bank of Canada has not increased interest rates.

In fact, Royal Lepage has adjusted their national aggregate home price forecast to increase 4.5% year-over-year in Q4 2023. This is an opportune time for home sellers waiting in the sidelines, to finally start getting their home ready for sale and look into renovations.

When selling the place you’ve called home for the past five, 10 or 30 years there is always one question that comes to mind: How do I get the most money back on my home?

How can homeowners increase the ROI, or return on their investment? There are a ton of tricks and tips to increase the ROI when selling a home, but the number one piece of advice is to look into hiring a Real Estate Agent.

The right Real Estate professional can assist in setting an appropriate asking price which is influenced by the season, annual trends, neighbourhood and amenities offered in the area. They can also help with other things like organizing showings, and offering invaluable advice about possible projects that can be completed to upgrade your home and also increase sale price.

Other ways to ensure you are increasing your investment in your home upon selling is by putting some money back into the house before the sale sign is even hung.

Who is buying?

Speaking with your hired professional and by taking note of the demographics in the area can help you determine your target audience. Who will be looking at purchasing your home? A young family? An expanding family? A couple looking to retire? Investors? Perhaps it is some people who are looking to flip the property?

Learning your target demographic can ultimately save you from investing money into big projects that will do nothing to return on your investment. “There are a lot of buyers who just want to buy a home that is turn-key. Updating rooms like the kitchen, will have the greatest impact for them. However, you need to know who your buyer is so the upgrades will align with their wants and needs.” says Terry Osti, award-winning, REALTOR® at StilHavn.

Web appeal is the new curb appeal

Forbes reports that it is just as important, or more so, to have a strong web presence when selling your home as it will bring interested buyers to the door. Senior director of PR at Realtor.com, Julie Renyolds told Forbes that ads featuring walk-through tours are clicked on 150% more than ads without them.

Curb appeal still a good investment

HGTV says that curb appeal is still just as important as ever. After all, you can only make a first impression once.

Ensuring cracks in sidewalks and driveways are patched, windows and doors are caulked and door knobs, locks and hardware are upgraded are low cost ways to boost the return on investment upon selling.

Taking that extra initiative and planting flowers and perennials in the garden can also have a lasting impression and increase the value of the home. Interior designer Brittany Farinas of House of One told Forbes.com that adding some greenery can give the outdoors a whole new look.

New siding, although a little more costly, is reported to rank high on the cost vs. value report according to HGTV. According to Forbes.com, homeowners can expect to pay between $1,000 to $16,000, depending on the size of the home and the type of siding material used, but it will not go unnoticed.

Sound structure is key

Interested buyers aren’t going to be as thrilled about an upgraded kitchen if the basement is flooding due to poor plumbing or cracks in the foundation.

HGTV says that investing that facelift money into ensuring the roof is in good repair, the foundation is sturdy, the furnace is functioning properly and all electric and plumbing is up to code will ensure the asking price won’t plummet in order to compensate for the necessary repairs.

Replacing windows can cost around $15,000 for a 2,000-sq-ft home with new vinyl windows, but RE/MAX predicts a return on investment of 75%.

Focus cash on bathrooms & kitchen

The kitchen and bathrooms are where a lot of time is spent in the home and architect Steve Straughan based out of Los Angeles’ KAA Design Group says they are the areas of the home that interested buyers can tell if money has been well spent.

According to RE/MAX, kitchen renovations such as countertops are one of the top three changes that lead to a high return on investment. Countertops can be expensive, but $3,000 stones such as granite or quartz can make a huge difference. To further elevate your kitchen, spend around $5-10,000 for stainless steel kitchen appliances. Kitchen renovations typically have a return on investment of 75-100%, usually the highest ROI.

Bathrooms can often always use a facelift — and, for certain, a deep clean. Every bathroom is different, but it is one of the main focuses that buyers look for in a home. Renovations can vary, but having a vanity with marble countertops or a frameless glass shower are elements that can draw buyers. A tip recommended by RE/MAX is to analyze your bathroom and figure out the strengths and weaknesses of it. A typical bathroom renovation is between $5-$15,000 and can have a return of 62%.

Updates and remodels should focus on creating open and inviting spaces and one of HGTV’s tips is to skip that soaker tub and put in a grandiose walk-in shower — or steam shower. After all, who really has the time anymore to take lengthy soaks often enough to justify the space the tub takes up.

Creating additional space

Does the home have an attic with dimensions that would allow the creation of an additional bedroom or office space? Can you extend the deck or create an outdoor living area or sunroom? Can the basement be finished and transformed into a cozy living space? Adding more functional spaces in your home can make it look larger and eliminate any unused spaces. Forbes predicts that the average cost to finish your basement is $22,850 in 2023.

HGTV says keep other homes for sale in the area and your target audience in mind because you don’t want to renovate your home to the extent that you price yourself out of your market.

Go Green

Concentrating on making the home energy efficient with better insulation, window and door replacements can not only increase your ROI when you sell the home, but you will also notice instant savings on your energy bills. By making such upgrades, AIC says the ROI is typically between 50-75%.

Plus, as of December 1, 2020, Canada has offered a number of grants for homeowners to make energy-saving upgrades.

At the end of the day, it isn’t always the fun and sexy renovations that add the most value to the home. Sometimes it’s the dirty work that goes the extra mile when selling. But, to make sure you are getting the best return on your investment, be sure to speak with a professional Real Estate Agent who can help answer any questions you may have along the way.

The post Renovating your Return on Investment for the Best Results first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Renovating the Basics

Renovating your home doesn’t always mean taking a sledgehammer, destroying whole rooms, and rebuilding said rooms from the ground up. Refurbishing the less sexy parts of your house can commonly deliver the best return on investment. These include

• Painting walls
• Removing carpeting
• Adding new roofing and windows

Painting

Painting a room is regularly an under-appreciated home improvement. But a simple, fresh coat of paint can make your whole property stand out and look brand new. It’s perfectly fine to do this yourself, but a professional painter can ensure the final product is even more excellent. A professional painter can skim walls, repair minor damages, and do the other work before selecting the proper paint for each surface.

You can also consult with an interior designer to help discuss tones and colour palettes and whether a matte or glossy paint would be better for specific rooms.

Removing Carpets

A lot of older homes may still have carpeting everywhere. Decade-old carpets look worn and are plagued with stains. And potential buyers may look at a home’s carpeting and think of the chores they’ll need to do to maintain it. Unlike other floorings, carpet requires heavy vacuuming, chemical cleanings, and more. Although the soft flooring may be ideal for kids who play and could trip, temporary soft floor mats are a great alternative until they get older.

Vinyl flooring is a popular alternative to carpet because it’s durable and affordable. Unlike hardwood, it won’t cost an enormous amount. At the same time, it provides a similar aesthetic to your home. Or even better, maybe once you pull those carpets up, you’ll discover hardwood underneath. In this case, you only need to refinish the floors for an updated look.

New Roofing and Windows

No matter how beautiful a kitchen, if your roof is leaking water into the home or if the windows are letting in winter chills, buyers will still turn away. Ensuring that your roofs and windows are intact can prove that the integrity of your home is stable. If your roof is crumbling, then leaking water can cause water damage or mould. Less than airtight windows can increase the costs of heating and air conditioning. Depending on your property’s specifics, replacing roofs and windows can return 80 percent or more of your investment at resale.

Kitchen and Bathrooms are the Money Makers

The kitchen and bathroom are often the standout parts of your home. They’re what most people notice and what homeowners want to show off. That’s why it’s common for people to spend the most renovating these two areas. And it’s a smart idea to do so. The Appraisal Institute of Canada found that the kitchen and bathroom were two renovations with the highest return on investment. But precisely what renovations should be done to the bathroom and kitchen to increase your home’s value the most?

Kitchen

Kitchens are important gathering places for families and friends. It’s a place to show off marble countertops and induction stoves. There’s an unlimited number of ways to pour money into your kitchen, but generally, a minor remodel can deliver more returns than a big one. A minor remodel could include:

• New flooring
• Replacing appliances
• Refurbishing cabinets

When renovating these areas, it’s vital to choose traditional looks such as wooden cabinets, stainless steel appliances, and natural stone finishes for floors and countertops. Although you may want to get creative with personal tastes and trends, remaining conservative is best for your home’s value. Dark green cabinets may look good in 2020, but if you sell your home ten years from now, it’ll likely look outdated. Ensure that you use high-quality materials and that the quality is similar to the rest of the house.

It’s also important to not overspend on luxury materials when cheaper ones suffice for what your home’s worth. This is an essential piece of advice for renovating any area of your home. For example, if you live in a middle-class neighbourhood, laminate countertops will likely be good enough, while real marble countertops could be too luxurious for your home’s area. This could make your house too expensive or high-end for the area it’s in.

Bathrooms

Bathrooms are similar to kitchens because you can sink plenty of money when renovating your home. There are countless fancy tubs and countertops that you can add. It’s common for a home to renovate their bathroom once it becomes worn and damaged. Counters may start to crack, and mould may begin forming in the shower.

The best return on investment for a bathroom, however, is adding a new one. If you live in a home with three bedrooms and only one bathroom, and there’s space for a second one, a second bathroom could drastically increase the home’s value. More so than any bathroom renovation.

The Face of the House: Curb Appeal

Your home’s curb appeal is its first impression to anyone entering it. So, it’s not surprising that this is a great place to put your money if you want to renovate your home to increase its value. Common curb appeal renovations that provide a good return on investment include:

• Replacing or painting your garage door
• Installing a sturdy steel front door
• Adding a front porch

Any of these renovations can provide the front of your house with a fresh look. A front porch can add dimension in cases where the front of your home looks flat.

Like the interior of your home, you can liven the exterior with a new coat of paint. Although not every house may have a painted exterior, it’s an easy opportunity to increase home value.

Renovating your house is exciting and fun. At the same time, it’s a stressful process. We hope that this article explained what renovations increase home value the most and aid you in your renovation process.

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If you’re a real estate investor or just have a child heading off to university, buying a property in a “university town”, where prices are often lower than major cities like Toronto or Vancouver, can be enticing. While the average price of a home in Toronto is roughly $920,000, an average home in London, Ontario (home to Western University) is almost 1/3rd of that at $344,815.

In this blog post, we explain the benefits and downfalls of investing in student housing. This post clarifies some myths of the opportunity, and explains what to keep in mind when investing in a property targeted at student tenants.

The benefits of student housing investments

Student tenants. You’re effectively renting to someone with no credit history, plenty of debt, and no full-time income. Or are you? Although this profile is common for students, it’s also common that the student’s parents pay most or all of their rent and expenses. And with a parental guarantee that rent will be paid, this tenant turns into a secure source of income, even less risky than someone who may have a full-time job. This is why a risk-averse investor such as the Canadian Pension Plan is willing to invest in it.

A property close to a university may also mean guaranteed tenants. One article found that only 3% of Canadian students lived in university-provided housing, with the remaining 97% commonly living with parents or at nearby rental units.

There’s no shortage of university students. In recent years, international students have enrolled in Canadian universities at an increasing rate. Other countries that were once popular for international students such as the U.S. and the U.K. have had unfavourable attitudes towards immigrants in recent years, which has resulted in more interest in Canada. This is why among new Canadian non-permanent residents, international students were the largest contributor.  The best part is that each of these students needs a place to live. Thus the growing number of international students has made student housing more popular with real estate investors.

As mentioned prior, student housing often has a lower barrier to entry than a condo investment in downtown Toronto. Although cities such as Waterloo, Ontario, or London, Ontario, are seeing real estate values appreciate, they’re still much more reasonable than what you would find in Toronto.

The pitfalls of investing in student housing

Student housing isn’t all rainbows and sunshine. Although it’s a secure investment for the most part, some aspects of it can make it particularly tough. Students may not care about the property as much as a tenant who is older and more mature. University house parties run rampant as part of the school culture, dirty dishes are usually left in the sink for weeks, and there’s often plenty of alcohol and drunk students around. This could result in damage to the house or other issues like mould or vermin.

And if you’ve purchased a property that’s in a different city that’s an hour or more away, common tenant issues are even more difficult. Toilets and drains get clogged, heating systems might break, or a window can crack. These all require your immediate attention. To prevent a 2-hour drive in the evening to fix a clogged toilet, it’s a good idea to keep some local plumbers or repair people in mind. Better yet, you could simply pay a property management company to take care of everything for you (but you remember that this would eat into your cash flow).

What to keep in mind when you purchase a property targeted at student tenants

Students are a different but similar ball game to regular tenants. You often hear investors mention the number of “beds” they own, which refers to how many tenants they can accommodate. To maximize your returns on a student housing investment, you want to maximize the number of students living there (within reason). This doesn’t mean covering every square inch with a bunk bed. However, a 3-bedroom house could be made into a 5-bedroom by adding two rooms to the basement.

Students may be cheap, but they still desire good living accommodations. In fact, student rentals are more often going towards the luxury-end now. Well-off international students who can afford to study abroad want high-end living accommodations, and as more of these international students choose Canada as their next educational venture, this demand increases.  It’s all about finding a balance between maximizing tenants while having a luxurious living space.

If you plan to renovate a property before listing it for tenants, there are a few items to keep in mind so that the space is suitable for students. This includes using quality, but not particularly high-end, installations like sinks or toilets. Most of the cost for renovations comes from the cost of labour, so why cheap out on a few hundred dollars on a sink that lasts longer? Materials such as laminate or vinyl tiled flooring are also solid and cost effective.

Do your renovations during the summertime when students aren’t around. You can even stagger them year to year. If you have a renovation that requires clearing the whole house, you could list your property for an 8-month lease instead of 12. Although you’re losing out on 4 months of rent, you can charge more during those 8 months, since 8-month leases are typically more desired by students.

Students are great tenants to have. Although they lack credit scores or full-time incomes, it’s usually their parents paying the monthly rent. The increasing number of international students also means that there’s no shortage of students looking for housing accommodations. Although partying and managing a property in a different city may be difficult, it can be worth the stability. Make sure to find a balance between creating a great living space for students while also maximizing how many tenants you can have in a house.

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