This seasonally relevant post will offer up a few savvy ideas and suggestions for homeowners who are currently looking to reinvest their tax returns into home renovations and improvements.
With the deadline for taxes looming, many of us are getting tax windfalls and aren’t sure what to do with them. Sure, you can blow the new-found cash on frivolous purchases like vacations or a new wardrobe, but wouldn’t it be better to spend it investing in your home? Investing in your home can actually make you more money, by increasing the home’s value, as well as making it more functional and beautiful for you. It is a win-win. There are five areas of your home that will get you the most return.
Furnace/air conditioner replacement
After a particularly cold winter or hot summer, you may have noticed that your furnace or air conditioning units aren’t working up to par. If you’ve kept up with maintenance and the systems are quite a few years old (15 – 25 years), you might need a replacement. Here are some signs:
- Needs frequent repairs
- Energy bills rising
- Uneven heating/cooling
- Noise from units
- Visible signs of corrosion
If you are planning to sell, a new furnace or cooling unit will impact buyers positively. If you are staying, investing in a new heating/cooling unit will impact your energy bills, so you’ll see a monthly return, as well as increase the value of your home.
New flooring will make the largest impact on your home’s value, especially if your current flooring is worn. Removing old carpet and replacing it with gorgeous hardwood or engineered hardwood will not only make the entire space look better, it will increase your home’s value by a great deal. A recent study found that homes with hardwood floors sold faster and for more money. Unlike carpet, hardwood floors can last forever if they get the care they need, making them an invaluable addition to your home.
Don’t run out to buy the latest in coloured stainless steel if your appliances already work well and are fairly new. But, if your stove doesn’t have a digital clock and your refrigerator freezer needs to be defrosted, now might be the time for an update. You’ll add value to your home as the kitchen will instantly look cleaner and newer without changing much else. As well, the newest appliances are much more energy efficient than their older counterparts and will save you a ton on energy costs.
Kitchens sell homes basically because they truly are the most used areas of the home. They need to be functional and being pretty really doesn’t hurt the bottom line. But, you need to factor in the cost of the home before doing any kitchen renovations. The rule of thumb many designers use is not to spend more than 15% of the value of the home on a kitchen renovation. A kitchen remodel could earn you back up to 83% of your investment, which is quite a large return.
One of the best returns on investment in terms of home renovations is on replacing your current siding. It not only boosts curb appeal, but it gives a great return of almost 96% when a contractor does it and maybe more when you do it yourself. As well, adding a deck has a great return on investment as well, with an up to 85% recovery. Add a new front door and some great low-cost landscaping and you’ll boost your home’s value before any buyer ever walks in the door. Not to mention, if you aren’t selling, all your neighbours will be jealous that yours is the nicest home in the block.