Monday, 8 July 2013

Renovations that give the best return on investment

Are you thinking about listing your home and want to do some renovations to make your home more appealing to purchasers?  Even if you are not looking at selling in the short term it is valuable to consider your home as an investment and therefore return on investment (ROI) is a worthwhile consideration since cash is, in most cases, a limiting factor.  ROI is calculated as return (increase in the value of your asset) divided by investment.  An ROI greater than 100% results when the value increase is greater than the cost of the project.

Often a renovation is undertaken solely due to the desires of the homeowner, while the resale market may not value it highly.  If you are looking to enjoy your home for some while, resale value may not be a deciding factor.  But, the accountant in me would still encourage you to acknowledge ROI. 

ROI can vary based on your specific home and neighbourhood, as well as decisions made through the renovation process (upgrades, for instance).  It will also vary depending on what the potential purchasers value, and the market conditions at the particular time you go to sell your home.  If you are looking at selling in the near future, a low ROI project may still be something to consider, especially in a highly competitive market.  Renovations can also set your property apart from other properties on the market competing for the same pool of purchasers.  Still, though there are projects that tend to provide greater return and projects that provide less value to the typical home.

Paint, paint and more paint!  The best bang for a limited budget is undoubtedly paint.  In the real estate profession, Peter would encourage any client looking at a potential home to look past the color of the walls.  However, even if buyers are fully aware that paint is the easiest thing to change, its still part of the first impression that they walk away with.  Neutrals will appeal to the greatest majority of viewers, and damaged walls should be repaired.  Given the low material cost and relative ease of completion, a motivated homeowner can realistically undertake small drywall repairs and painting, and can realistically expect a ROI of 100% or even more on this project.

Bathroom and kitchen renovations may require a hefty budget, but these rooms can literally sell the house by putting your home in a different class and allowing you to compete with brand new construction.  Since the magnitude of this type of project is beyond the scope of the average homeowner, a licenced contractor may be required.  If the costs are well managed on such projects and upgrades kept under control, an ROI in the neighbourhood of 100%  which recovers the investment cost is possible.

Smaller projects may be more within the budget.  Updating the flooring, while typically only returning an ROI of 50 to 75%, according to the Appraisal Institute of Canada, can entirely change the look of a room.

Continuity is important and if there is a glaring issue in your home, buyers (or the home inspectors) will notice this and can result in a lost sale.

Wednesday, 3 July 2013

High River

Peter spent his day in High River today, and he will be there again tomorrow.  At the particular house he was working on, the basement cement block wall was washed right into the basement, leaving a whole side of the house unsupported.  The structure is now fully reinforced and cleanup can commence safely.

While cleanup must be done to limit further damage, please ensure you are not working in unsafe conditions.  Have a licensed contractor fix structural damage and do not enter a building that you feel may be unsafe!

Here's an image of the train tracks through town

The town is in need of volunteers to help, for volunteer information please visit

Monday, 1 July 2013

Calgary Clean Up

Welcome to our new blog!  And Happy Canada Day!

First just a bit about ourselves.  We at AAMD Renovations Inc. operate a renovation business local to the Calgary area.  We offer complete renovation solutions specializing in basement, kitchen, bath renovations as well as decks, pergolas and garages.

This first entry of our blog comes just a week and half after Calgary and many of our neighboring cities, towns, and communities announced a state of emergency due to unprecedented flooding.  The community has come together to get back on its feet.  Volunteers have been helping strangers move sludge, appliances and everything else, and also providing warm meals and a dry place to sleep for those evacuated.  Slowly some of those affected are being allowed to return to their homes... it pains me to think about what they might find.

With so many damp basements in Calgary and the surrounding areas, this is bound to be an insurance nightmare.  Over-land flooding is likely not covered by most homeowners insurance policies, though sewer backups often are.  The insurance industry will likely be swamped (mind the pun).  If you have flood damage, phone your insurance company as soon as possible to determine what is covered and keep in mind that there is also disaster relieve out there.  Regardless, it is your duty to mitigate losses and do whatever you can to prevent further losses.  This means... get the place dry!  But, before you move anything, take pictures of everything.

All wet items need to be removed from the basement floor.  Cement is a porous material, so it is normal that water will come and go through it, but it needs to be able to dry out.  Make sure that the floor drain in your basement is not blocked. The floor drain should be located at the lowest spot in your basement floor.  If walls need to be ripped out of the basement and you want to change the layout, keep in mind that the floor drain should be left accessible in case of any future water problems.  It is not advisable to install new walls or flooring until the entire area is dry.

If your basement has been developed, you will need to determine the extent to which the building materials need to be ripped out.  If the drywall is damaged, you may be able to just remove the bottom portions. 

Water damaged materials may be salvageable, but only if the water was clean (like a overflowed washing machine or a broken pipe).  The sludge coming out of this is not to be put down the storm drains or back into the rivers, as it might be toxic... therefore, this is NOT clean water we are dealing with.  Carpeting, etc. is probably not salvageable.

Mould grows in warm, damp environments, and given our weather this past week, it is likely already too late if you have not been able to get to it.  There are many types of mould, some are toxic, some are not.  If the water damage is recent it is important to dry out the area as soon as possible to avoid mould growth.  Mould spores are ever present in our homes.  All they need is a warm, damp environment in which to grow and multiply.  If you think you may be dealing with black mould, do not attempt to clean this up yourself.

How to know if you might be dealing with black mould...