According to the Appraisal Institute of Canada’s Home Renovation Survey, the top 3 renovations that return the most money when selling are:

“If renovating in order to sell, homeowners must plan for changes that will meet the needs of a majority of potential buyers,” says Joanne Charlebois, AIC’s Director, Marketing and Communications.  “They also need to ensure any modifications reflect current market trends.”

Given that energy savings are top-of-mind today, the 2008 survey asked respondents to rate five energy-efficient upgrades in terms of their influence on the resale of a home.  Green renovations were cited most frequently by respondents as having an average recovery rate of 61%, with high efficiency windows receiving the highest level of agreement among respondents as having a significant positive impact on the appraised value of a home. The type of heating system, its efficiency and insulation were also cited as important. However, efficient hot water heaters were not important, according to the survey. According to the Institute, homeowners who are considering renovations should consider the following:

• Renovations adding features to a home that brings that home up to the same standard as other homes in the neighbourhood have a higher recovery rate than adding features not seen in similar homes. Don’t over-improve your home.
• Renovations on homes having a lower market value than others in the neihbourhood provide a higher return than renos done on one of the homes in the same neighbourhood with a higher market value.  Again, don’t over-improve your home.
• Poorly done renos may have no positive effect –in fact actually reduce the value of a home.
• Renovations done on a home which has maintenance problems will not have a significant bearing on its resale price.  It is essential to keep your home in good repair.

Other renovations and their average rate of return include:

• Replacing roof shingles                       (50% - 80%)
• Replacing furnace/heating system        (50% - 80%)
• Adding a family room (expansion)       (50% - 75%)
• Doors and windows                           (50% - 75%)
• Adding a deck                                    (50% - 75%)
• Upgrading floors                                (50% - 75%)
• Adding a garage                                 (50% - 75%)
• Installing a fireplace                            (50% - 75%)

Source:  OREA Edge October 2008 and AIC 2008 RENOVA Survey