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Payback time: How to get the most from your renovation budget

While returning home in the evenings, I daydream about what it would be like to do renovations on my house. I think about making over my unfinished attic into a spacious new bedroom-cum-study. Or perhaps tucking a chic little bathroom under the stairs. Maybe adding state-of-the-art windows to replace three drafty bays. And a striking front door, old-fashioned in just the right way.

Depending upon how slowly the subway moves, I can mentally spend as much as $30,000 before I get off at my stop. As I climb the front stairs of my house — by that time in close to ecstatic trance — I convince myself that whatever I invest in renovation will increase the value of my Toronto home.

But is that really true? I'm not alone in my passion for renewal. Canadians will spend more than $20 billion on renovations this year. Yet much of what people think they know about renovation is false.

As I discovered when researching this article, many renovation dollars go wasted. To get value for your dollar, you have to have a realistic sense of what renovation can do for your property value and where you can get the greatest payback for your money.


TYPE OF
RENOVATION
ESTIMATED
PAYBACK
ESTIMATED
COST
COMMENTS
INTERIOR PAINTING 60% to 75% $2,000 You can definitely do this yourself, although you may want to consult with local paint retailers when choosing colors. Great payback for a few hundred dollars.
EXTERIOR PAINTING 62% to 65% $750 and up Be prepared to spend a couple of tedious days peeling away old paint and prepping the surface. If you have never painted an exterior before, take a class from a store like Home Depot. If your house has more than two stories, consider hiring a professional. Finally, when in doubt, keep the colors neutral. White never goes out of fashion.
KITCHEN 68% to 75% $10,000 and up Unless you are highly skilled, hire a professional to do the job. If you're contemplating a major reno, be prepared for some big bills — Canadians spend an average of $30,000 to $50,000 on new kitchens. Also, count on disruption. A complete reno can put your kitchen off limits for several weeks.
MAIN BATHROOM 60% to 65% $5,000 to $10,000 Consider doing some of the work yourself, including removing old fixtures, caulking windows, repairing leaks. You should hire a professional for plumbing, electricity, heating and ventilation.
ATTIC BEDROOM
ADDITION
25% to 50% $10,000 Much less expensive than constructing an addition. Consider taking advantage of otherwise lost space by adding built-in storage. Skylight and dormers will also add to the appeal. If you have the skills, you can do some or much of the work yourself. Professionals are required to extend the electricity, heating, plumbing into the attic.
REFINISHED
BASEMENT
25% to 50% $10,000 and up If you're skilled you can do some of the work, like preparing the space and installing shelves, but you will need professional help to remove major cracks or to lower floors.
MAIN-FLOOR FAMILY
ROOM ADDITION
50% to 60% $25,000 and up This can add substantial value if you live in a neighborhood with many young families. If you have solid construction skills, you may be able to do much of the demolition work yourself, including the removal of non-load-bearing walls. But you should hire a professional to lay the foundation and perform major structural changes to the existing house, including putting in new plumbing and heating systems.
SECOND-STORY
ADDITION
40% to 50% $70,000 to $100,000 Make sure the addition fits well with the rest of the house — it may be worth hiring an architect or designer to ensure the esthetics are right.
UPGRADED
HEATING SYSTEM
30% to 40% $3,500 to $7,000 Installing a high-efficiency forced-air furnace costs from $3,500 to $7,000, but reduced energy bills will soon help to offset that expense.
DECK 50% $2,000 to $6,500 If you're handy or willing to take an afternoon course, you can easily build a deck. An attractive deck generally costs at least $2,000 and generally from $18 to $25/sq ft.


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