If, like us, you’re a fan of HGTV’s home remodeling shows – Love it or List it, Fixer Upper, Property Brothers, etc. – you’ll know that they all seem to follow a similar formula: there’s always a who needs help renovating their home, but they have a limited budget and need it done “yesterday.” Cue the photogenic host who steps in to save the day with a perfect renovation plan, an army of skilled workers and access to suppliers who make more on-time deliveries than Amazon Prime. Presto, before you know it, the remodel is complete. Of course, there have been a couple of hiccups along the way – it makes for good television – but the end result is stunning and the couple is delighted (often to the point of tears) by the transformation.
The host then gives a breakdown of what was spent and what the house is worth today. Don’t expect any surprises at this point – it’s always good news. More often than not, the value of the house has jumped by far more than the money spent on renovating it.
When the numbers make sense and the process seems so seamless and simple, it’s no wonder that more and more Canadian and Burlington, Ontario, homeowners are plunging headfirst down the renovation route.[1]
But before you take a sledgehammer to the dining room wall, let’s have a little reality check.
Are the costs on TV realistic?
No. One of our biggest beefs about these shows is that they set false expectations. The homeowners do pay for the renovations themselves, but the costs are far below market value. The price you see won’t include all labor costs (some subs will work for free, just for the exposure the show gives them) and some products will also be donated by sponsors. A quick look at the FAQs for the Property Brothers show, says it all. In answer to a question asking how so much could get done on such a small budget, the brothers replied:
“We are working with real budgets on the show, set by the homeowners. The show provides $10,000 including labor, certain sponsored products, as well as the expertise of Jonathan’s design team.”
Will the post-renovation value of my house cover my costs?
The answer depends on several factors, including the amount of the investment, what was done, and the current state of your local real estate market. As a general rule, however, don’t expect an immediate payback. Nationally, the figures vary, but the average return on a renovation investment is about 70% after one year. Of course, we all know people who’ve bucked this trend and that it’s entirely possible to make a good living renovating and flipping houses. But, on the whole, you should approach your renovation project with the clear understanding that the dollar amount you put into it won’t necessarily be fully recovered, at least not in the short term.
The Appraisal Institute of Canada (AIC) regularly publishes a list of the renovations that yield the best return on investment (see below). Kitchens and bathrooms can return 80% to 100% of the renovation cost, while adding a pool or skylights is far less advantageous. However, a kitchen that has been renovated to the tune of $35,000, but in very bad taste, could negatively impact the value of the house. If you are renovating to sell, you must choose wisely and make changes that will appeal to the maximum number of people. A relatively simple reno such as freshening up the interior of a house with a coat of paint could return 50% to 100% on the investment, assuming the color palette is tasteful, and may be the key to getting your house sold more quickly.
In its very useful publication entitled “Tips to Choosing “Smart” Home Renovations” (http://www.aicanada.ca/wp-content/uploads/Renovation-Tips-Appraisal-Insititute-of-Canada-April-20131.pdf), the AIC cautions against over-improvement. It is possible to over-renovate a home in relation to the surrounding neighborhood, it warns, so keep your costs in line with the value of your home.
Percentage recovered upon resale (Source: AIC)
Kitchen upgrade: 75% to 100%
Bathroom upgrade: 75% to 100%
Interior painting: 50% to 100%
Roof replacement: 50% to 80%
Replacement of furnace or heating system: 50% to 80%
Expansion (addition of family room): 50% to 75%
Doors and windows: 50% to 75%
Deck: 50% to 75%
Installation of hardwood floor: 50% to 75%
Construction of a garage: 50% to 75%
Fireplace (wood or gas) 50% to 75%
Central air conditioning: 50% to 75%
Finished basement: 50% to 75%
Wood fence: 25% to 50%
Interlocking paving stones on driveway: 25% to 50%
Landscaping: 25% to 50%
Asphalt driveway: 20% to 50%
Pool: 10% to 40%
Skylights: 0% to 25%
Renovations take a long time
There’s nothing more frustrating for general contractors than the shortened timelines shown on the home reno shows. On TV, renovations seem to go from concept to completion in the blink of an eye. “While most people understand that a major home renovation will take longer than a few weeks, they still seriously underestimate how long it will really take,” says Dave Perkins, Heritage Renovations. “These TV shows distort reality and that makes it harder for us to make clients happy.”
The reality is that a large project takes months of planning before construction can even start – you’ll need to factor in several weeks for design and planning, another eight to 12 weeks to complete construction drawings, and another two to eight weeks to obtain a permit. The construction itself could take between three and 12 months, depending on the size and scope of your project. Also, don’t forget that good contractors get booked up and may not be able to schedule in a new project for many months. Weather and the time of year will also impact the construction schedule.
The bottom line is: don’t expect remodels in real life to mirror those you see on TV. Remodeling can be a rewarding experience if you have reasonable expectations. If you keep reality in check, your Burlington, Ontario, home renovation could turn out as well as – or better than – the ones you see on TV, even though it will take more than an hour.
About The Linda Maguire Team
The Linda Maguire Team provides expert real estate services, and are previous Diamond Award winners. Their real estate services include staging, listings, selling and they will always help you find the best Burlington, Ontario, homes for sale.
Contact The Linda Maguire Team today.
[1] Spending on home renovations in Canada has surged at an annual average rate of 7% over the past decade. Source: TD Economics
