Adding value to a home

It was reported in the Toronto Star recently that the non-profit personal finance web site GetSmarterAboutMoney.ca offers five types of renovation that add value to a home:

•Investments in more efficient use of energy (60 per cent recovery rate)

•New or improved kitchens and bathrooms (75-100 per cent recovery rate)

•Low-cost improvements — painting, wallpaper, etc. (50-100 per cent recovery rate)

•New windows or doors (50-100 per cent recovery rate)

•Basement renovation (50-75 per cent recovery rate)

The Appraisal Institute of Canada says renovations to the bathroom and kitchen offer the best value with a recovery rate of 75 to 100 per cent of the amount spent. The recovery rate is the likely increase a renovation will have to a home’s resale value. So, a $5,000 renovation that increases a home’s value by $3,500 has a recovery rate of 70 per cent.

EiD would be interested to know if there is any comparable work in Europe or elsewhere.

One thought on “Adding value to a home

  1. I’d say the recovery rate for energy efficiency related renovations are fairly underestimated; given the positive impact on the operational cost over the life time of a house (even more with high energy inflation rates). See also this article on Leonardo ENERGY about The impact of energy-saving installations in European homes on the life cycle cost (http://bit.ly/en-saving).

    Any idea how those recovery rates are estimated? Are they a reflection of perception (willingness to pay a higher price for the property) or real statistics on effective real estate sales transactions?

    At European Copper Institute, we conducted a study (based on interviews with real estate agents across Europe) on the perceived value regarding electrical functionalities. From the conclusions, I quote:
    “Some features however are recognized having a „real“ value and can lead to a premium:
    1) Highest premium for energy saving systems (Solar boiler, heat pump, PV)
    2) Safety systems (Video entry, alarm system)
    3) Comfort systems (electrical blinds/ shutters and automatic garage/ gate opener)”

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