The Citizen, 1991-05-15, Page 14PAGE 14. THE CITIZEN, WEDNESDAY, MAY 15,1991.
W5KE W® 1991
The economics of home renovations
It's a lough decision. Renovate or
move? But with tight money mar
kets, a sluggish economy and high
unemployment, more and more
homeowners are opting to stay put
and renovate to get the improved or
extra living space they need.
Still the question remains as to
what makes an economically wise
renovation and what will never
generate a return. Now there seems
to be some help at hand in the form
of a consumer study which tries to
establish values for specific renova
tions.
Conducted by the National Asso
ciation of the Remodelling Industry
in the US, the survey deals with the
most popular home renovation pro
jects and identifies what portion of
the associated capital costs should
be recovered on resale.
The survey warns against rushing
out to completely remodel your
home in hopes of cashing in when
the economy turns around. Leading
the list of the most chronic money
losing renovations is the addition of
a swimming pool. A pool does a lot
to enhance the curb appeal of the
house but few prospective buyers
are willing to pay substantially
more for a house with a pool in the
back yard. In some cases, people
simply don't want anything to do
with a pool.
Other renovations are extremely
important but rarely generate a
tremendous return on capital at
resale time. These tend to be
essential renovations such as roof
ing, windows, doors and insulation.
As most real estate professionals
will tell you, a brand new roof
might help sell the house faster, but
people expect a house to have a
PROJECT AVERAGE COST
RECOVERY
ON RESALE
□ Add a lull bath $ 10,600 96%
□ Add a l ireplace $ 4,100 94%
□ Minor kitchen remodelling $ 8.500 79% -
□ Major kitchen remodelling $ 23.800 70%
□ Bathroom remodelling $ 7.400 69%
□ Add skylight $ 3.850 68%
□ New siding $ 7.600 67%
□ Add insulation $ 1,800 65%
□ Add a room $ 34,500 62%
□ New roof $ 4.600 61%
□ Add a wood deck $ 6,500 60%
□ Add a greenhouse $ 17,700 56%
□ Replace windows, doors $ 12,200 55%
□ Add a swimming pool $ 24,000 39%
good roof. It tends to work in the
reverse. It a prospect buyer feels
the roof might need replacing in the
near future he tends to discount the
cost of re-roofing during negotia
tions.
The same goes for windows,
doors and insulation. However in
this instance there are other eco
nomic and comfort consideration
which will likely swing the balance
in favour of renovation. While the
survey indicates only 65 percent of
the capital cost of additional insula
tion and 55 per cent of the capital
cost of new windows will be recov
ered upon resale, the energy sav
ings will likely more than make up
the difference. Real estate profes
sionals will tell you that both are
important considerations in making
the purchasing decision.
The two top renovation projects
in terms of a return on investment
at resale are the addition of a full
bath and a fireplace. These projects
according to the survey, deliver a
96 per cent and 94 per cent recov
ery of investment respectively.
However in these situations like all
renovation projects, some common
sense is necessary to ensure that the
scale of the renovations is com
mensurate with the value of the
neighbourhood. Adding a $50,000
bathroom to a $150,000 home
won’t likely generate much return
at resale.
Whatever the project, the key to
any successful renovation is good
planning. Remember, it's the last
minute changes that get expensive.
MAITLAND MANOR
NURSERY
BLUEVALE 335-3240
SPECIAL Q00
EUONYMUS O
Mother Was Right!
Don’t Forget Your Fibre!
Choose Soluble Dietary Fibre
Soluble fibre is a soft fibre that
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soluble fibre are:
* legumes (dried beans, peas,
lentils)
* pectin rich fruits (apples,
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* oat bran
* oatmeal
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contact your local
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Improving your odds against
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HEART
AND STROKE
FOUNDATION
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TIME FOR
TREES
AN INVITATION
This is a simple ad to convey a simple message.
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Come and enjoy! You will find my new staff a delight to talk
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Don Henry
MAITLAND MANOR NURSERY
RR #1, SLUEVALE • 335-3240
Open evenings - all day Sat.;
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EXETER BLYTH
Hwy. No. 4. N. Hwy. No. 4 N.
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For Your Home
Check our upper level for our large selection of beautiful Afghans
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• • •
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4 PIECE WHITE SETTEE SET (Includes Cushions)
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■FG2