How to Spend a $15,000 Renovation Budget

A recent CIBC Home Renovations Poll shows that approximately half of Canadians renovate their homes each year with a budget of just over $10,200, although a third of them overspent. The top renovation projects in 2019 were basic maintenance, landscaping and bathroom renovations. To stretch their budgets, 57% of homeowners did some or all of the labour themselves rather than hiring contractors.

According to this CIBC survey, renovation spending in 2019 dropped to its lowest point in six years, perhaps because housing costs remain near historic highs, so there is not much leeway to add value to properties. This makes it especially important to choose renovations that make an impact and offer a good return on investment (ROI).  

Remodeling magazine compares average costs for projects with the value they retain at resale in dozens of American communities. The magazine’s 2020 survey results show the top 10 projects that delivered the best ROI:

1. 95.6% - Manufactured stone veneer 
2. 94.5% - Garage door replacement
3. 77.6% - Minor kitchen remodel
4. 77.6% - Siding replacement using fiber cement
5. 74.7% - Siding replacement using vinyl
6. 72.3% - Window replacement using vinyl
7. 72.1% - Deck addition using wood
8. 68.9% - Window replacement with wood
9. 68.8% - Entry door replacement with steel
10. 66.8% - Deck addition using composite
    
    

If half of homeowners renovate every year and spend $10,200, that equates to Canadians spending an average of $5,100 per year. Renovations may be anything from basic upkeep such as refreshing the paint and replacing worn carpeting to designing a luxury kitchen. 

Sometimes the choice is simple—the carpeting is just too worn, or the deck wood is rotting through and must be replaced. The challenge comes in when homeowners are working from a “want” list instead of a “must” list. High fashion, designer décor is rarely possible on a $10,000 budget. 

Two of the biggest questions facing anyone looking to renovate are: 1) will I like it and 2) will potential buyers like it? According to CIBC’s renovations poll, 89% of Canadians consider home renovations to be an investment, so it pays to look ahead to a future sale.

Kitchens and bathrooms are two popular areas to renovate and the Remodeling magazine survey shows that the ROI can be quite modest. A minor kitchen remodel using midrange materials and designs costing US$23,452 had a ROI of 77.6%; a major, midrange kitchen remodel at an average of US$68,490 had an ROI of 58.6%; and, a major, upscale kitchen renovation costing an average of US$135,547 had an ROI of just 53.9%. 

Viewed as an investment, rather than a preference, it does not pay to do luxury renovations. Finishes should be suitable to the value of the property. 

Bathroom renovations revealed a similar pattern. A midrange bathroom remodel costing an average of US$21,377 had an ROI of 64%; a bathroom with a universal design costing $34,643 had an ROI of 62%; and upscale bathroom remodel costing an average of US$67,106 had an ROI of 56.6%. 

While a luxury bathroom would be amazing, it may be better to spread the budget over multiple rooms. That said, it costs nothing to be inspired by talented designers. 

One of the best ways to plan a renovation is also a lot of fun. Turn on the tv, sit back and watch your favourite home renovation show. Pick up a home décor magazine (preferably a Canadian magazine with details about where items can be purchased in this country). Window shop to explore the latest materials and design ideas; staff are often happy to be of assistance and some stores even offer a free, one-hour consultation with a professional designer. 

Once you find products you like, there are ways to minimize your costs:

• Offer to pay cash; the store may offer a discount in exchange for saving them credit card processing fees.
• Ask your contractor to pay for materials as they often receive a discount.
• Staff may be able to reduce shelf prices or alert you to upcoming sales.
• Buy multiple products from the same store (e.g., tile and hardwood) for a bulk discount.

If you are like most Canadians operating within a renovation budget of $10,000 to $15,000, it is still possible to create a beautiful living space and reap the rewards of your investment.