Cost Versus Value - A Delicate Balance

As a homeowner you're probably curious what projects provide you with the best return on your investment (ROI). Or maybe you want to spruce up your home to help with its resale.

As an architectural professional, questions I'm often asked are: What are my options? Is this project worth the time? Is it worth the money?

Fortunately, there's information out there to help you understand what the costs and ROI will be for typical renovation projects.  It's often surprising to learn bigger is not often better.

Let's take a look at a kitchen renovation as an example.

A major kitchen remodel may cost you anywhere between $40K to $60K. A minor kitchen remodel will be in the price range of $10K to $20K, maximum. If you, the homeowner, are thinking the major kitchen remodel is going to give you a 100% ROI you're sorely mistaken. Same goes for the smaller kitchen remodel.

The ROI for the major kitchen remodel tops out at 74.2% and the ROI for the smaller kitchen makeover is 82.7%.  So if you're looking to add value to your home for resale, fixing up the kitchen may not be the best project to undertake.

Here's what I mean.

Let's say you're thinking of selling your home in the next year or two and your home renovation budget is $15K. Your goal is to make your home sell faster, since the time it spends on the market just eats into your profit margin.  Your second criteria is you want as high a ROI as possible.

What projects should you consider? 

For a budget of $15K, here are a couple of scenarios you may want to consider to help improve your home's curb appeal, saleability, and the ROI you will experience.


Scenario 1

• Entry Door Replacement (steel) 
• Your cost: $1,162 
• Your return: $1,122 
• Your ROI: 96.6% 

• Wooden Deck Addition
• Your cost: $9,539
• Your return: $8,334
• Your ROI: 87.4%

• Garage Door Replacement
• Your cost: $1,534
• Your return: $1,283
• Your ROI: 83.7%

This first scenario will cost you $12,235 and your ROI will be $10,739.  The difference is a loss of $1,496.

Scenario 2

If you want to switch things up a bit, consider what this scenario offers:

• Entry Door Replacement (steel) 
• Your cost: $1,162 
• Your return: $1,122 
• Your ROI: 96.6% 

• Window Replacement (vinyl)
• Your cost: $9,978
• Your return: $7,857
• Your ROI: 78.7%

• Garage Door Replacement
• Your cost: $1,534
• Your return: $1,283
• Your ROI: 83.7%

This second scenario will cost you $12,674 and your ROI will be $10,262.  The difference is a loss of $2,412.

Both home improvement scenarios are below the $15K margin, which is a good thing, because you give yourself some wiggle room for any unforeseen complications with the work.

Scenario 3

Let's compare these two scenarios to a bathroom remodel:

•  Bathroom Remodel
• Your cost: $16,128
• Your return: $11,688
• Your ROI: 72.5%

The bathroom remodel will cost you $16,128 and your ROI will be $11,688.  The difference is a loss of $4,440.

When we compare the bathroom remodel to Scenario 1 and Scenario 2, the bathroom remodel is over budget and provides you with much less return.  Not to mention the disruption and inconvenience you will encounter while the project is underway.

The conclusion is: pick your projects wisely. If you have a limited budget for your home improvements and want to maximize your return on your investment, going big is not always better.

Building Permits And Your Property

You're either interested in purchasing a home that has had previous structural work done to it or you are interested in selling your home that has work done by you or a previous owner, the big question is: Was a building permit issued for the work?

The answer to this question is important for two reasons.
 
First, if you are looking to purchase a property and it's clear previous work was done, you need to be sure the work performed was done in accordance with the building code.

Second, you, the homeowner, will have to pay to have the work brought up to code and prove the work meets the building code requirements, even if it was the previous owner who did the work.

Let's take a look at what the implications of previous structural work done to the foundation of your home would mean.
 

Previous Structural Work

Underpinning or bench footings often indicate a problem area that had previously existed with the property. For most older homes this is either a result of inadequate footings below the foundation wall, poor soils, or some other equally important and significant structural issue.  The importance of discovering previous structural work like this, whether done by you or a previous homeowner decades ago, is the work needs to be backed up by a building permit and engineering reports too.

If it's found the structural work is non-compliant, you're looking at a significant cost to have the work brought up to the standards necessary. So if you are serious about making an offer on a property and are thinking the lack of a building permit is something you can ignore, better think again.

What Are Your Options?

If you own a property and are unsure if prior work on the home was done with a building permit, you have two options to exercise; both help you to discover if there was a building permit issued.  The first method is to conduct an anonymous search to determine what permits the municipality has issued for your property in the past. The other method is to contact the municipality directly to determine what work was done and under what building permit.

If you discover your home has unpermitted work and have no intention of having the work inspected by the municipality to determine if it meets the building code requirements, you must disclose the unpermitted work to the next buyer so they are aware of the risk they are assuming when purchasing your property. 

If you are looking to purchase a home and it has been disclosed there was unpermitted work done, the larger risk is you, as the buyer, may not be able to get financing for the house. That means even if you were interested and ready to buy the property because it has a great finished basement apartment perfect for your family's needs, you may not get financing.

If you want to bring the work up to code, then you will need to work with an architectural professional to help document the existing condition and open up portions of the covered work to show the municipal inspector how the structure was put together.  You will be responsible for all costs associated with bringing the work up to code.

So if you hear your contractor suggest you can do the work without a permit, contact your municipality to double check.  It's in your best interests to do so.

Finishing Your Basement

Back in April I wrote about the dangers of finishing your basement - the wrong way. Moisture, or water, was the culprit I said, and you needed to ensure you had bulk water management systems in place before doing anything.  Evaluate before you renovate, was and still is my message.

I also mentioned there were solutions out there and all you had to do was find the right person to ask. Well, since I've written that article I've been asked what the right way to do things is.  That means I'm the go-to guy for this type of information, so here is what you need to do to create a healthy basement.

Insulated Wood Frame Walls Need Two Sides to Dry Out

 

A typical method used to insulate basement walls is to build a wood frame wall, leave a 1 inch air space between the wood studs and the concrete wall, fill the stud bays with fiberglass batt type insulation, and then cover the interior side of the assembly with a sheet of 6 mil polyethylene vapour barrier. With the plastic sheet installed on the warm side of the wall, this limits the wall to only being able to dry out towards the exterior. 
 
Since basement walls are unable to dry out towards the exterior because the ground is damp, and with the tight film of plastic preventing walls from drying out towards the interior, the result is the small amount of water that does make its way into the foundation walls moves into the framed wall and stays there, trapped.

The Better Way to Finish

The better way to finish your basement is to create a wall and/or floor assembly that enables the walls and floor to breath. Using permeable materials allows moisture to travel through them and this helps both the foundation walls and/or floor slab to dry out. The excess water vapour is managed by using a dehumidifier. To construct wall and floor assemblies that help damp concrete to dry out will require you to use vapour-permeable materials like EPS for insulation, latex for paint, and cork for flooring, for example.

All of these finishes allow water to move through them. Although it’s impossible to keep your foundation and floor slab from getting wet because they are in contact with the ground, using a wall and floor assembly that allows the walls and/or floor to dry out is the better solution.

A Final Word Of Warning

A more common water issue impacting homeowners in developed areas in both the US and Canada is urban flooding. Paul Kovacs, executive director at the insurance industry's Institute for Catastrophic Loss Reduction, points out that, according to his research, basement flooding has emerged as one of the fastest growing causes of losses and extreme damage in Canada, costing $2 billion just in direct insurance payments annually. You can read the full study here in Urban Flooding in Canada.
 
The Center For Neighbourhood Technology in the United States has published a case study on the Prevalence and Cost of Urban Flooding in Cook County, IL, and say “the economic and social consequences can be considerable: experts estimate that wet basements decrease property values by 10 - 25 percent.” For a home with an appraised value of $300,000 that’s a monetary loss of $30K to $75K.
 
So before you decide to finish your basement make sure your bulk water management systems in place work, understand the risks associated with flooding, and when making your finish material selections, chose permeable finishes that breath so things dry out when they get moist.
 

Kitchen Planning and Primary Work Centers

Kitchen Planning - Primary Work Centers

You may find your kitchen is cluttered, there never seems to be enough room to cook or prepare meals, and someone always seems to be in someone's way.  There may be more than one reason your kitchen design may not work for you. Since the kitchen is the "heart" of the home, it's important to get it right.

As a lay person, how do you know if the kitchen you're looking at works or not?  Are there rules good kitchen design needs to follow? Templates even?  I mean, where do you even start?

To help you better understand how your kitchen works, you need to learn about some fundamentals about kitchen design and layout. It all starts with what are called the Primary Work Centers. The importance of Primary Work Centers are they impact the kitchen’s layout, restrict what can or cannot be done in the kitchen, and set the design criteria needed to create an efficient, comfortable, and well planned workspace.

Understanding what the Primary Work Centers are, what they're composed of, and the types of activities that occur enables you to evaluate your current kitchen layout with a more practiced and pragmatic eye. Not only will a good design appeal to you aesthetically, you will know why it makes the heart of your home a very comfortable place to be.

Primary Work Centers

The idea behind Primary Work Centers is based on a rather simple premise.  Group activities in the kitchen into distinct areas and then identify the tools and space needed for these activities. 

That's it in a nutshell really.

Whatever the activities are for each area it only makes sense to ensure there is ample storage, enough counter space, and sufficient lighting for you to be able to carry out the tasks you need to perform.

OK, so what are these "activities"? How granular do you get anyway?  

Let's keep the count down to four activities and they are: cleanup, mixing, cooking, and serving. It also becomes evident that grouping these items might make more sense if you placed the cleanup area next to the mixing, the mixing area near the cooking, and the serving area, well, it can be left to float around a bit or put close to the clean-up area.

Needless to say, identifying these four areas allows you to see there are some relationships between the work centers that are stronger than others.

So, How Does This Help Me?

Circles Keep It Simple

If you look at the diagram provided the arrangement of the work centers fits within the layout of the room and they either create new circulation paths or accommodate existing ones.  

As shown in this example the clean up area is located between the mixing and serving work centers.  The cooking work center is floating up there at the top.  Maybe it's an island, or perhaps it's located on exterior wall? Who knows?  This layout looks like it can accommodate two entrances into the space too.

What we do understand is the work center layout needs to fit the space available, provide the work centers with context to one another, and moving any one center to a new location impacts what is done where and the flow through the space.


The simplicity of designing or evaluating your kitchen using the four work centers allows you to:

• Learn how activities relate to one another on a macro rather than micro level 
• Understand how moving one work center to a different location affects the entire layout
• Quickly create numerous layouts by something as simple as circles
• Choose a layout that works for you
• Determine if the layout works for the space available.