Canadians are investing in home improvement like never before: According to an Ipsos-Reid survey, two-thirds of homeowners intend to undertake renovations this year. While most plan to spend reasonable sums, others say they'll go all out: luxurious materials, home theatres, a Jacuzzi on the patio...even $60,000 kitchens are not that unusual! But how much of their investment will be recovered when their house sells?

Homeowners tend to embark on renovation projects to meet their needs, improve their quality of life or simply pamper themselves with a little luxury. But even if you're renovating primarily for your own sake, you should try to assess the post-project increase in the value of your house, just in case you ever want to sell.

Every year, the Appraisal Institute of Canada surveys its members and compiles a list of renovations that yield the best return on investment. Year after year, refurbished kitchens and bathrooms head the payback list: 75 per cent to 100 per cent of the outlay for these projects can be recovered upon resale. Adding a pool, on the other hand, is far less advantageous. Still, pool vendors did a booming business this past summer...

Such positive evaluations don't always hold true, however. For example, a kitchen that has been renovated to the tune of $25,000 but in appallingly bad taste could adversely affect the sale of the house. If renovating in order to sell, you must plan for changes that will meet the needs of a majority of potential buyers and ensure that the modifications are suitably up to date and will appeal to the maximum number of people.

“A house that looks nice inside will sell at a slightly higher price, but above all, it will sell faster,” says Guylaine Barakatt, a real estate agent and housing consultant. “It has to be fashionable and in line with current trends; people are increasingly inclined toward luxury.” At the same time, though, beware of passing fads.

One rule seems to apply in all cases: avoid projects that will set your house apart from other properties in your neighbourhood.

The Appraisal Institute of Canada posts this warning on its website: “If the value of your house exceeds the average market value in your neighbourhood, your renovations will not yield much return. But if your house value is below the average, you can recover a larger part of the renovation costs.”

Also bear in mind that the amount spent on renovation projects should be relative to the value of the dwelling: A $30,000 remodelled bathroom does not belong in a $100,000 house.

SEVEN hot home-improvement trends
- Home theatre
- Hardwood floor in kitchen
- Laundry room on main floor
- Whirlpool bath
- Built-in kitchen appliances
- Office on the ground floor
- Kitchen island

Percentage recovered upon resale
Kitchen upgrade: 75% to 100%
Bathroom upgrade: 75% to 100%
Interior painting: 50% to 100%
Roof replacement: 50% to 80%
Replacement of furnace or heating system: 50% to 80%
Expansion (addition of family room): 50% to 75%
Doors and windows: 50% to 75%
Deck: 50% to 75%
Installation of hardwood floor: 50% to 75%
Construction of a garage: 50% to 75%
Fireplace (wood or gas) 50% to 75%
Central air conditioning: 50% to 75%
Finished basement: 50% to 75%
Wood fence: 25% to 50%
Interlocking paving stones on driveway: 25% to 50%
Landscaping: 25% to 50%
Asphalt driveway: 20% to 50%
Pool: 10% to 40%
Skylights: 0% to 25%