The basement can be used as another bedroom, a playroom or living space, or adding a legal suite can boost the property value exponentially.
“In places like the Beaches or Annex in Toronto, adding a legal suite can be a really positive asset to the property, because those are areas that are highly sought after,” says Greaux. “A legal basement brings in additional income, which can help would-be buyers offset the mortgage, meaning they now afford it.”
However, like adding space within the main floors, adding a basement suite can sometimes devalue a property if it’s not done in the right area.
“Take somewhere affluent like St. Clair, Toronto, for example,” he explains. “If you had a single family home in that area, the price of the property would be a lot higher if the house stayed whole. It would be to your detriment to cut that up. I’ve seen it happen where appraisers have come back saying that if it had remained a family home, it would have fetched more because that’s what people are looking for in that area.”
Tom Zhang found an area in which he was able to add one, and spent between $25,000 and $30,000 renovating a suite. “That suite alone will give me additional cash flow of $1200 to $1500 per month,” he says.
“If you do the math, my initial investment has come back to me within two years. The rest is pure income, and the resale value is higher. That’s the way I look at it – any renovation should increase both equity and cash flow.”
4. Improve the roof
When it comes to increasing equity, new roofing plays an important part.
“New roofing is probably one of the most expensive items for a home,” says Greaux. “If you’ve just put a new one on, that is definitely something you want to showcase in your listing because you’ll undoubtedly get more for it.”
From an aesthetic, structural and architectural standpoint, it is a must – especially for older homes. In addition to adding to the curb appeal of a property, buyers also get piece of mind knowing there will be no hidden leaks or repairs needed further down the road. Comparing an appraisal on a property with old, damaged shingles versus a new sturdy renovation, the ROI is palpable.
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