Renovations that increase the value of your home (and those that don’t)

Renovations that increase the value of your home (and those that don’t)

The following is a guest post by Sean Cooper, bestselling author of the book, Burn Your Mortgage.

Are you considering undertaking a major home renovation in the coming months? You’re not alone. A home is no longer just a place to live. Rapidly rising home prices in big cities means it’s the single biggest financial asset for most Canadian families – and that trend isn’t slowing down.

Home equity lines of credits (HELOCs) have become a popular source to fund home renovations. Operating like a credit card anchored to your mortgage, about two million Canadian homeowners have HELOCs as of May 2018.

Canadians owed a staggering $201 billion in HELOC debt at the end of 2017.

Given the risks associated with HELOCs, before renovating your home, it’s important to understand why you’re doing it.  Are you doing it to boost the resale value of your home or for pleasure? If it’s for pleasure, you don’t have to be as concerned about how it will affect the value of your home in the short-term (although I suspect you’ll care eventually when you decide to sell it!).  If you’re renovating your home to boost its resale value, you’ll want to spend your money wisely.  That just makes sense.

Some renovations help the resale value of your home, while others, not so much.  Here are my top-3 renovations that increase the value of your home and three more that don’t.

3 renovations that increase the value of your home

Basement apartment

Are you currently using your basement for storage? Then you might want to renovate it and consider installing an in-law suite.  Not only can you bring in some decent rental income short-term, with the high cost of housing in big cities, it can open up your home to a larger pool of prospective homebuyers who might otherwise be unable to live in your neighbourhood without some extra rental income.

Finishing your basement can be a major financial endeavour. Before going ahead, there are a few things to consider – as a homeowner myself who lived in the basement of my own home; renting out the main floor.

  • Is the ceiling high enough? If not, you’ll have to pay a pretty penny to hire contractors to dig down deeper.
  • Does the basement have a separate entrance? If not, again, it can cost tens of thousands of dollars to install one.

If your basement is already finished?  Then you need to add a bathroom and/or kitchen, which may or may not be straight-forward.

Just make sure your city/town lets you legally rent out part of your home. Not all cities/towns do.

Add an extra bedroom

Is there an oversized room in your home? Then you might want to consider installing a new wall and adding an extra bedroom. Sometimes the layout of your home isn’t ideal, but there’s nothing stopping you from changing it – structural assessments aside.

While removing a wall can be risky, adding walls shouldn’t be too much of a problem. Although homeowners tend to favour open concepts, if you can say that your home has four bedrooms instead of three and they’re decent sized, you may be able to sell your home for tens of thousands of extra dollars.


When it comes to selling your home, curb appeal is everything. You want prospective homebuyers to be impressed the moment they walk through your front door.  Painting your home is the perfect DIY renovation when it’s done right. That said, a sloppy paint job can hurt the resale value of your home.

While there’s nothing wrong with painting the walls yourself, you might want to hire professionals to paint the ceiling. Likewise, make sure you buy some painter’s tape to avoid painting on light switches and choose neutral paint colours (sorry, that means hot pink is out!).

3 renovations that won’t add value to your home

Swimming pools

“Can we have a pool, dad?”

If you’ve ever seen the classic episode of the Simpsons where Bart and Lisa relentless ask Homer for a swimming pool, you’ll be familiar with this phrase. Although your kids may want a pool, other homebuyers may not share your tastes.  Not only is installing an in-ground pool expensive, it costs a lot to maintain.  Always consider the operational and maintenance costs for such a big purchase.

Don’t forget people see risks differently than you do.  While pools may be great and very enjoyable they can come with a much higher home insurance bill.  Some homebuyers wouldn’t even consider a home with a pool, so they’re best to avoid, especially if you’re planning to sell your home in the not-too-distant future.


Skylights are a very polarizing home renovation. Some homeowners love them, while others hate them. There seems to be no middle ground.  My sense is, when someone sees a skylight, their first concern is probably, does it leak?  My parents used to own a house with a skylight and guess what – it leaked.  My father was afraid of heights, so my mother had to go on the roof of our three-story house to repair it. Not a fun experience for them…

That’s why most homeowners tend to avoid skylights.

If you’re looking to let sunlight in your home, you’re probably better off with a bay or bow window. Those are more widely accepted (and loved) than skylights.


Carpeting used to be popular a few decades ago but it’s not the 60s or 70s anymore.

Not that this is any guidepost but if you watch any home renovation TV show, usually the first thing they’ll do when renovating a house is tear out the old carpets. Homeowners these days would much rather have hardwood floors over carpeting.

If your hardwood floors have taken a beating over the years, you’re probably better off refinishing them rather than installing carpeting. If you have carpeting in your home and the floors are in decent shape underneath, you might want to tear up the carpet and expose the hardwood floors.  This isn’t too costly and it might help your home sell for higher value.

Those are my three “dos” and “don’ts” when it comes to home renovations.   No doubt there are more but these are definitely starters.

This post was written by Sean Cooper, bestselling author of the book, Burn Your Mortgage. Sean is also the managing editor of

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

19 Responses to "Renovations that increase the value of your home (and those that don’t)"

  1. renovation some time must for better home & necessary some time for it. these points are very good i think for home renovation. Very Nice blog is. I appreciated Very Much!

  2. I agree with you about getting a swimming pool. While some people view it as a relaxing thing, others see this as a hazard especially for buyers with small children. Anything that will make our home less desirable to prospective buyers is a big NO.

  3. Anne (Experienced Renovator) · Edit

    Good article, Mark. Lots of people can miss the point that others might not see the added value they do about some popular renovation projects. I would add to your list of renos that can add value: upgrade the kitchen and/or bathroom(s) IF they are seriously outdated or dingy.

    My reason to start renovating was to maintain value. When I purchased a 920 square foot 1950’s bungalow in the early 1990’s, NOTHING had been done to maintain it. It had the original small fuse box, 1″ insulation in all the walls and in the attic, one outdated bathroom, an 8′ x8′ kitchen that was separated from all other rooms by full walls, and steep awkward stairwell to the basement. The best way to deal with the very low R-value was to redo all the insulation so off went all the drywall from all the exterior walls. The only good solution to the tiny kitchen and awkward stairwell was to move the stairwell and that lead to expanding the footprint of the house. Bonuses: I now have a larger kitchen open to a larger multi-windowed dining room/hearth room (original DR was also a little 8’x8′ room), a back entrance area, a spacious basement bedroom, and a second full bathroom. Why didn’t I just move to a larger or at least more modern house? Mostly because housing costs in my area skyrocketed soon after my initial purchase, and partly because I enjoy?/can tolerate the active renovation process. On an ongoing basis there’s been a lot of sweat equity benefit. I did not use a HELOC but did use house equity by having the mortgage rewritten and increased based on equity and increased market value. It’s meant a longer time to get the mortgage paid off but overall gain by the reduced interest rate as mortgages have had much lower rates than any LOC. Has it been worth it for house value? While there’s no guarantee I will recoup the total cost the house definitely has more value. It has definitely been worth it for the increase in comfort. One aspect you don’t mention is “how well can everybody tolerate the chaos?” Even small renovations can create a lot of chaos, and big ones can get very nasty. As several experienced people warned me “you never know what you’ll find when you open up walls”. That applies to the relationships with house-mates as well as the physical rebuilding process.

    1. Good point about the “renovation chaos,” Anne. I know about this firsthand. My father would always start renovations and never finish them. Let’s just say my mother wasn’t too happy. Probably better to hire trusted contractors in those cases.

  4. Value can be a relative thing. The real objective value to measure would be how much of the amount spent in improvements would be recovered if we sell the house tomorrow.

    I’m more for a quality of life value. Beautiful flooring won’t increase my happiness much, but any broken hardware that annoys me will get upgraded pretty soon.

    Replacing an old inefficient furnace by a heat pump can have value in reducing the energy bills. Replacing a roof and some old plumbing can bring peace of mind while reducing insurance premiums, etc.

    A more efficient layout that saves time and remove frustration can bring much more value than the price increase of the house. A perfectly functional laundry room, that is far from both the main bathroom and bedroom will eventually add to the chores just by the back and forth motions, etc.

  5. Lloyd (58, retired (but farm a bit), married, rural MB) · Edit

    When we sold the house in Thompson the carpeting was not in great shape. Rather than replace it, we just offered a “cash back” equivalent to what we were going to spend on replacing. That way the purchaser can elect to use the money for the flooring or decide to live with the existing flooring. Nothing worse than picking the wrong colours, texture, type etc that a prospective buyer might not like. The house sold in a couple of days and I don’t know what they buyers decided to do. I *suspect* they used the cash back in the purchase.

      1. Lloyd (58, retired (but farm a bit), married, rural MB) · Edit

        lol…I can not take credit for the idea, the realtor suggested it when I said we’d need a few weeks to do the renos.

  6. I love the idea of a basement apartment but alas it wouldn’t make sense in our area. I’d want a nice quiet student down there but we’re too far from the school for it to make sense.

    Plus our home is only 1,000 sq ft so we’re going to need that basement space for when our girls get older, either for them to hang out in or for us to escape!

    PS. Congrats on paying off your mortgage early. We also paid off our mortgage early. Not the best choice mathematically but wow was it ever a great decision for other reasons!

    1. Thanks for the kind words, Owen and great points. Renting out the basement may not make sense for you, but perhaps you can airbnb your house when you go on vacation to help bring in some extra cash (only if there’s a demand for that sort of thing in your area).

      1. Thanks Sean, AirBnB might not make sense in our area, its more of a residential area without many attractions to draw tourists, but I could be wrong. I do know people who do that successfully so I definitely think its a good idea. Thanks for the reply.

  7. My recent renovations include the kitchen (in 2016) and the deck/sunroom (in 2017). I would estimate the total contractor cost would have been $50,000. Now retired and blessed with the ability to do professional work , my out of pocket cost was approx. $18,000. Plus I got some new tools out of the deal! The house is 21 years old. The deck had to be done…now in composite. The kitchen was a project my wife and I worked on together. We plan to downsize in the next 5 to 10 years. We know the upgrades added a lot of value to the house today, but no idea if it will make a difference when we sell…except for the fact that the house is up to date and well maintained.

    1. Great point, Paul. Before undertaking a major renovation, it’s also a good idea to ask yourself if this is a reno for pleasure today or will add future value. If you aren’t planning to move anytime soon and you’re adding something like a skylight or swimming pool, it’s probably not going to help your home’s resale value (it will probably hurt it).

    2. We’re outta here in another year Paul. With our downsize to the condo, we have lots to sell.

      That said, we’ve also done renos here including making a small home gym area in basement, new roof, window wells for house, installed a natural gas (backup) generator, and totally reno’ed the ensuite bathroom. This is above and beyond maintenance and capital replacements like the hot water tank and fridge that recently died on us. All within 8 years.

      Smart call on composite deck – those are nice. 🙂

  8. Hi Mark – good topic, and one that my husband and I discuss frequently as we live in a small 1950’s bungalow…
    Reasons for doing Renos are as varied as the personalities of each homeowner, but as money has certainly been cheap in recent years, people seem to be going to town with the HELOCs. As fairly newbies to Ottawa, it was astounding to see the number of neighborhoods undergoing tear-downs and re-builds…. and the ‘contagious’ nature of this! I wonder if ‘keeping up with the Jones’s is replacing common sense.
    As for our home, we put our money into replacing all exterior doors, bathrooms, a basement reno + separate entrance for living space and extra bedroom, increased water protection around foundation with new stone work in front, weeping tile and membrane, and solid roof and windows. Not a lot of glamour! Next on the list is a good shed. We decided to work with the existing blueprint of the house and will not add on. Next owner can undertake this !

    1. It’s funny how common sense, some critical thinking, isn’t that common 🙂

      With high incomes and for the most part, lower cost of living, Ottawa has a number of tear-downs going on.

      To your work, there is likely only so much you want to take on in any one home! Thanks for your comment.

  9. re: Renovations that increase the value of your home (and those that don’t)

    Pretty sure the author is confusing value with price.

    Beyond that, pretty sure almost every house owner during the last 45 years has confused a renovation with an increase in market price of their real estate. What has been driving real estate prices higher over the course of that period has been the declining cost of money, ergo, the influence of renovations on market price has also diminished (e.g. Vancouver’s infamous million dollar “crack shacks”). Money and reno’s have became worth less and less. However, now that rates are on the rise-ish, reno’s may see their day in the sun once again.

    1. That’s something I wondered about as well…with rates going up, I wonder if others are going to stay put and update their home? Could be less expensive.


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