Homeowners Prefer Renovating Bathrooms and Kitchens
26 July, 2011 / by Bryan Jaskolka
A new BMO poll found that most Canadian homeowners (83 percent) will make renovations to their home over the next two years. The most interesting finding is that homeowners are shrewd investors who understand very well which renovations will add value to their home and which will be wasted money (at least from a value adding perspective).
The most common reno projects are kitchens and bathrooms, with 48 and 46 percent of homeowners planning each type of renovation, respectively. These projects are considered to have the best return on investment, with an expected home value increase of 75-100% of the renovation cost.
Further down the ROI list are basement renovations, with 50-75% of the cost typically adding to the value of the home. As such, a moderate number of homeowners intend to pursue these projects (38 percent). The poorest returns come from installing in-ground pools. Typically, home values will only increase by 0-25% of the cost of the pool. Homeowners understand this and, as a result, very few (2 percent) plan on adding a pool to their home.
While the majority of Canadian homeowners (57 percent) prefer to use their savings to make these renovations, a large minority (25 percent) will take out a home equity line of credit or home equity loan. Given the low interest rates we are currently experiencing, now would be a good time to use cheap credit to increase your home’s value.