A comment from one of my readers with regard to the Home Renovation Tax Credit that was the topic of my last blog…”Many landscaping projects qualify for the tax credit as well as increase curb appeal.” Thank you for the reminder.

There are lots of reasons for making home improvements, whether to customize a home to your needs, do repairs and maintenance or make a home more appearling for resale. But not all renos are equal when it comes to how they influence the value of you home.

Factors to consider:

1. If you plan to stay in your home for awhile, and personal enjoyment or maintenance is your main priortiy, make your reno choices based on your needs and your budget. If you’re not expecting to move in the near future, it’s best not to assume you’ll get your reno investment back. Home improvements have a shelf life, and any renovation can become dated over time.

2. If you’re planning to sell in the next little while, and see your renovations as a way to add value to your home, you may want to take a different approach to your decisions. The renovations that provide the highest payback potential are bathrooms and kitchens with a potential investment return of 75% to 100% and interior and exterior painting with a potential return of 50% – 100%. (Appraisal Institute of Canada 2004).

Once you start renovating and decorating for the buyers, you will have to consider their tastes as well as your own. Therefore,
-Choose tasteful, neutral colours and materials that will appeal to the widest audience.
-Avoid cutting corners. Do quality workmanship.
-Have your home renovations consistent throughout.
-Try it imagine the type of buyers your home will attract.

Above all, remember that you might not get all your money back. Instead of the inconvenience and stress of a major renovation, you might consider smaller improvements that can help your home show better.

Adding value to a home isn’t simply a matter of adding on the cost of your renovations. The market you’re in, your neigborhood and local demand will influence how much your home is worth. Be cautious of over-renovating beyond the price range of these built-in limitations.

For my local readers (Camrose and district), I hope that you will join Royal Lepage’s “Bird for Brigantia” silent auction on Thursday, May 21. We have 40-50 birdhouses that have been decorated by our realtors, celebrities and the public and these will be auctioned off by silent auction with all proceeds to Brigantia Place. The event is from 5-8 pm at the Village of West Park Social Centre (behind Super Store). We would be delighted to have you join us.

Enjoy the sunshine.

If you are not sure what qualifies, think about it this way: If it stays with the house when you move, then it probably qualifies.

That could include:
-floors and the roof
-heating and air conditioning
-insulation
-kitchens, bathrooms and basements
-windows
-paint
Expenses such as labour and building permits qualify too.

But where should you start? New kitchen or hardwood floors? Finish the basement or install new windows? Maybe it is time to build that deck. Unless you are renovating out of sheer necessity – like replacing shingles due to a leaky roof – then you should think about where you’ll get the most bang for your buck.

The 15% can be claimed on any expenditure over $1000 and under $10,000. Since only $9000 is eligible, the manimum you can get back is $1350.

The conventional wisdom points to re-dong your kitchen or bathroom. Home buyers are willing to pay a premium for a great kitchen or bathroom. But a survey by the Appraisal Institute of Canada found that kitchens and bathrooms tend to break even in terms of adding value. Floors and rec rooms returned little more than 50 cents on the dollar at resale.

If you’re planning on riding out this tough economy by cocooning in the comforts of your home, why not be comfortable in your space? Renovations can be a good investment and if it means you’ll be spending more time at home, they can also be a money-saver in the long run. Just remember that the Home Renovation Tax Credit expires on February 1, 2010 and you can only use the credit for the home that you live in.

Now I have to decide what I’d like to do….but first, where’s my contractor?