TORONTO, ONTARIO--(Marketwire - Oct. 29, 2012) - While renovation projects are typically reserved for the spring and summer months, a BMO survey released today found that nearly half (49 per cent) of Canadian homeowners are currently undertaking or planning home improvements for this fall.
According to the report, the main driver for doing upgrades in the fall is to get something done before winter (32 per cent). More than half (52 per cent) say the renovations are equally aesthetic and functional, while 34 per cent say they are mostly for looks.
"Fall is a good time to focus on improvements and repairs for your home, as there are some things that may need to get fixed before winter rolls in," said Laura Parsons, Mortgage Expert, BMO Bank of Montreal. "While the data show a significant number of Canadians are focused on aesthetic upgrades, it's important to consider projects that will increase a home's energy efficiency - particularly as the weather gets cooler and energy costs rise."
Top Fall Home Renovation Projects
Various industry experts note the most profitable renovation projects are improvements to kitchens and bathrooms, with a potential return on investment of 75 to 100 per cent. Painting - both interior and exterior - can also result in a high return of around 50 to 100 per cent.
According to the survey, Canadian homeowners are making the right choices for renovations; 37 per cent of fall renovation plans focus on bathrooms, followed by kitchen improvements at 34 per cent and bedroom renovations at 29 per cent.
Funding Home Renovations
The majority (54 per cent) will spend less than $1,000 on renovations this fall, while one-third (33 per cent) will spend between $1,000 and $5,000. In terms of funding home renovation projects, the report found Canadians will rely on multiple methods of payment:
- 40 per cent will rely on savings they set aside specifically for renovations, while another 25 per cent will rely on their personal savings
- One-quarter will use a credit card to fund a portion of their renovations, while another 14 per cent will use a line of credit
Furthermore, fall renovators are planning to pull up their sleeves; half of the work getting done this fall (51 per cent) will be done by the renovators themselves, with the majority of them doing so in an effort to save money (70 per cent).
"Both major and minor home improvements have the potential to add significant value to your home, but it's important to consider all of the financial factors involved," added Ms. Parsons. "A financial professional can help you determine the affordability of a renovation and ensure you get the greatest return on your investment without overextending yourself."
BMO offers the following advice for Canadians homeowners planning to renovate this fall:
Focus on projects with the greatest return: Understand how a renovation will impact the value of your home by researching which renovations create increased value and are popular selling features.
Measure twice (financially): Think long term when making financial decisions. Whether you are using savings or borrowing to renovate, take the time to meet with a financial expert to ensure the renovation fits in with your long-term financial goals and to avoid overspending.
Have a back-up plan: Be financially prepared with a contingency plan to cover unexpected costs, such as a leaky roof, broken pipe or other course corrections that may occur during the renovation project.
A BMO personal line of credit can give homeowners the flexibility to borrow what they need, when they need it. For larger projects, homeowners can consider a secured line of credit, such as a BMO homeowner's line of credit.
The survey results cited in the BMO Fall Home Renovation Report conducted by Pollara are compiled from a random sample of 1,000 Canadians 18 years of age and over between October 13 and October 16, 2012. A probability sample of this size would yield results accurate to ± 3.1 per cent, 19 times out of 20.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $542 billion as at July 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.