Sign, sign, everywhere a sign. And those signs all point to better economic days ahead and a more confident consumer, even though record household debt and high taxes in this country remain Enemy Number One.
Amid all the buzz of activity at new-homes sites this fall, while our housing market continues to score record sales, here's yet another sign: earlier this month, people crammed into the Better Living Centre at Exhibition Place to take in the four-day Fall Home Show, which had an impressive 25% jump in traffic.
I know. I was there - at Cambria Canada's booth and in the show's seminar room where, during two presentations, I hammered home how to get the biggest bang for your real estate buck and how the government's Home Renovation Tax Credit is helping people live their dream.
The sunset date on this baby is Feb. 1, 2010, and I reminded seminar-goers that in this over-taxed country, it's not often the taxman returns some of our hard-earned cash. Don't miss out, I preached, even if you're the owner of a new home.
Think about it: often newly built homes come without shrubbery, mature trees, a paved driveway or a finished basement. And unless the buyer opted for upgrades or dealt with an upscale builder, key items in kitchens and bathrooms, like countertops, fixtures and flooring, may be on the list to replace. All of these are covered by the HRTC.
"But, Linda," pressed one attendee who'd just bought a new home, "I'm a little cash-strapped, so which renovation should I do first?"
Great question, because if you want to get the biggest bang for your renovation buck, it's best to consider the projects that pay back the most.
Tops on the list of the Appraisal Institute of Canada's top renovations are kitchens and bathrooms, which can recoup anywhere from 75% to 100% of your reno dollars through increasing equity in your home. In other words, spending $ 10,000 to make your kitchen a showpiece could add up to $10,000 to the value of your home.
Cooking islands in particular are becoming a desirable addition, with a recovery rate of 65%, says the AIC.
And going green is also a trend that's adding value to homes, with efficient heating system, windows and insulation topping the list. So if you're adding that special countertop to make a statement, make sure it's eco-friendly, like natural quartz surfaces.
Also, take note: there are renovations that add little value to a home, and in some cases can actually have a negative impact. These include whirlpool tubs, swimming pools and skylights.
Still, some designers will argue it's hard to put a price on the enjoyment of improving a home. Like my saltwater pool, with its soothing waterfall. Priceless.
Meanwhile, experts say spa-like bathrooms are becoming increasingly popular and can add to a home's value. Tip: if you're adding a new soaker tub, sit in it before you buy. Comfort is key.
When it comes to renovations, the rule of thumb is if you have the highest-priced home on your street, recouping renovation dollars will be tougher. But for the cheapest on the street, recovery could be 100%.
How the Home Renovation Tax Credit works is for renovation work contracted after Jan. 27 of this year and before Feb. 1, 2010, taxpayers can claim a 15% tax credit on eligible expenditures worth between $1,000 and $10,000 - to a maximum credit of $1,350.
And many projects are covered, like:
* Renovating a kitchen, bathroom or basement
* New windows, doors or flooring
* A new furnace, woodstove, fireplace, water softener or water heater
* A new driveway or resurfacing a driveway
* Re-shingling a roof or painting a house
* Landscaping
* Swimming pools (either inground and above-ground)
* Fixtures, like blinds, shades, shutters, awnings, lights, fans, etc.
* Associated costs such as permits, professional services, equipment rentals and incidental expenses
What's not covered: furniture, appliances, tools, plus audio and visual electronics. Also not covered are routine repairs, maintenance and cleaning, like furnace cleaning, snow removal, lawn care, pool cleaning and house cleaning. Financing costs are also not covered.
Which leads to this: The last thing you want is your renovation project to turn into an endless money pit. Make a budget and stick to it. Be realistic about what you can afford, and try to avoid high-cost credit cards unless you can afford to pay off balances at the due date.
If a home equity loan makes sense, go for it. But remember: constantly paying the minimum on a revolving line of credit will wipe out any benefits of today's cheap borrowing costs and keep you forever in debt.
Also, be wary of those nomoney-down, 0% interest deals at big-box renovation stores. If you don't have the money to pay the amount in full at the due date, you could end up paying 30% interest or higher, which will be charged on the full amount back to the date of purchase.
Shop around for a reputable contractor by asking for referrals from friends and neighbours. Always do research before hiring.
Mike Holmes, host of HGTV's Holmes on Homes, has seen it all and warns hiring the wrong contractor can destroy renovations dreams.
Holmes, who launches his new Holmes Magazine next month, will share his advice during Credit Canada Week. He'll be keynote speaker at a dinner at the Royal York Hotel on Nov. 4. For more info, go to www.crediteducationweekcanada.com.
Fact is, for most Canadians, our homes are our castle, our safe place and the biggest asset we'll ever have. A mortgage-free home is a powerful financial tool as we head into retirement. Be disciplined to pay down debt, pay yourself first and take advantage of programs that put your tax dollars back in your pocket.
Bang for the buck
The following is a list of returns on your renovation dollars from the Appraisal Institute of Canada:
75%-100% return:
* kitchen upgrade
* bathroom upgrade
50%-100% return:
* interior painting
50%-80% return:
* roof replacement
* furnace or heating system replacement
50%-75% return:
* garage construction
* expansion/addition of family room
* installation of hardwood floors
* fireplace (gas or wood)
* finished basement
* central air conditioning
* windows and doors upgraded or changed
* adding a deck
25%-50% return:
* interlocking on driveway
* wood fencing
* landscaping
20%-50% return:
* asphalt driveway
10%-40% return:
* pool
0%-25% return:
* adding skylights
