^"Pride of ownership^" is a term we often hear which speaks to the fact that a house is very well maintained. We spend a lot of time in our most cherished investment - our home. We want to enjoy that time spent in our homes and share it with friends and family. We are proud of the homes we live in!

Renovations should not be made just for resale purposes, but rather to enhance the home you live in for both you and your family.

Part of the advisory role of a realtor is to educate our clients. It is not uncommon for people, who wish to put their home on the market, to desire recuperating all of the money that they have spent improving their home. This is not always possible.

The marketplace is only willing to pay a premium for improvements if they see "utility" in that improvement. For example, if you had a solid dark oak kitchen installed last year and a purchaser wants a white European style kitchen, the purchaser will see little or no utility in the oak kitchen. This is not to say that the oak kitchen is not beautiful. On the other hand, there probably are other purchasers in the marketplace who are looking for a dark oak kitchen (hence, see the utility in it) and will pay extra for it. The point I am trying to make here is that certain purchasers will pay more for your improvements than others will. Home improvements can be very personalized because they were designed for you and your family.

My experience tells me that the home in today's market which is the closest to "move in" condition as possible will be the home that sells more quickly and for more money. A "move in" condition house is not necessarily a lavish home, but one that has been well maintained and is usually very attractive to look at. Many purchasers are busier than ever in their workplaces and lives and don't seem to have the time, desire, or perhaps even the disposable income to spend on improvements. They want the finished product.

The Appraisal Institute of Canada¹ released data (1996 renovation and home value survey) on which improvements are best for resale. I think the information will surprise you. Overall, kitchen and bathroom renovations will allow you to recuperate 68% and 64% of your original investment. I think a word of caution has to be said here. Kitchen and bathroom renovations should be kept in line with the value of the property.

Interior and exterior painting are also very good investments from a resale perspective, returning 66% and 62% of their original investments respectively. Further to that, the more current the colour is, the better. Painting everything beige isn't necessarily the best approach. I advise clients to flip through home decorating magazines and look for what colours are being used today. Avoid strong colours like orange and vibrant yellows. Avoid the colour pink as an overall theme, as pink houses tend to be more difficult to sell. Whites, soothing current colours, and taupes are probably the best colours to choose.

Several other rates of return are as follows:finished basement - 50%new furnace / heating system - 50%addition of main floor family room - 49%separate living unit - 42%

There are several points in the survey with which I don't agree and perhaps this is due to given specifics of the marketplace where I sell real estate. I believe that the rate of return for energy efficient features is much lower in the "real world" than the 39% return stated by the Institute. I don't know of too many purchasers who are specifically interested in energy efficiency as it relates to value. For purchasers, cosmetics and location have been more important than the engineering components of the house. Perhaps as fuel costs increase, this may change.

Furthermore, the rate of return on central air conditioning of 38% is very low. I believe that purchasers will pay 100% or more of the value of central air conditioning. This may be a recent effect given the extremely hot summers we have had over the past two years.

Landscaping return of 45% is probably not too far off the mark, but I believe a well landscaped house adds to "curb appeal" and certainly enhances the marketability of a property. Certainly people who do landscaping themselves and keep costs moderate should receive a substantially larger return than the 45% stated return. On the other hand, I would always caution people against too elaborate perennial gardens from a resale perspective. Don't remove all of the grass area in your front or rear yards. Despite the fact that mature perennial gardens are actually easier to keep than newer gardens, the public at large is still somewhat intimidated by extensive garden beds. Perception is stronger than reality. Probably like everything in real life, moderation is the best advice! Now-a-days, most garden centres will provide a low cost or free landscape plan if you buy your trees & plantings through them (even if you do the work yourself).

A few key summary points are critical:keep renovations moderate (not too inexpensive and not too elaborate)renovate because you want to enjoy your home and not just for resale purposesremember that cosmetic enhancements are usually the best (repaint wherever possible)obtain a professional landscape plan for your front yard & landscape yourself wherever possibleif you decide to finish your basement try to keep a tight budget

and most of all - enjoy your beautiful home!

Should you desire a free consultation on your own home or an obligation-free opinion of value, please do not hesitate to contact me at 416-481-6137.

* not intended to solicit properties currently listed for sale

¹source: The Hamilton Spectator, Free Press, Dec. 16/98, p.1