Transcript: Scott and CIBC on: Choosing the right investment

[Music plays in the background.]

[Expert advice with CIBC and Scott McGillivray. CIBC logo. CIBC and Scott on: Choosing the right investment.]

[Scott McGillivray and Al Ladha, CIBC Mobile Mortgage Advisor, sit at a restaurant table.]

>> Al Ladha: So a common question, Scott, that I get asked from my clients is, "We’re thinking about doing a renovation, but could you help us with what kind of renovation to do?"

>> Scott McGillivray: Absolutely, a lot of people want to make sure they’re adding value to their home when they do renovations, and there certainly are some renovations that add more value than others. Kitchen renovations; most important room in the house is the kitchen. So if you can do a smart kitchen renovation, you can definitely add some serious value to your house. Next most important room: bathrooms. People always talk about: "Are the bathrooms updated? Are the kitchens updated?" If you can renovate the bathroom and keep the same floor plan, chances are you’re going to get an even better return, because it’s less expensive than switching everything around.

>> Al Ladha: Right.

>> Scott McGillivray: A lot of people don’t think about the floors. But if you look at house listings, "hardwood floors throughout" is the most commonly used phrase in this country when it comes to listing a property. So that just goes to show you how important it is to have good floors. If there’s existing hardwood floors that you can just refinish. Bam! You’re going to get a better return because you get the results without spending as much money.

>> Al Ladha: Right.

>> Scott McGillivray: But another one that a lot of people don’t think about are fixtures and hardware. Simple things like changing out a light, changing out door hardware, these are the things that are going to, you know, you turn on a light and it dictates the age of the home. It can also brighten up a space. And door hardware is one of the only things you touch when you walk through a place. So updating that really helps as well. Above and beyond all that, something that has given us consistently great results: putting in income suites. We have found that by building income suites into people’s homes, not only are they getting more than the full value back in equity, they’re also getting that cash flow from having a tenant.

>> Al Ladha: Your top 2, you said were kitchen and bathroom. So if you were to pick between the 2, what would you pick?

>> Scott McGillivray: I would say that the kitchen is the most important upgrade to the home, but you have to do it smart. It’s not just about getting necessarily a custom kitchen; it’s about doing a renovation that’s appropriate to the neighbourhood. You don't want to over improve for the neighbourhood or you’re not going to get your full value out. And today there’s so many knocked down type cabinets where you can go online, you can build your own layout, pick your own cabinets, have them installed for a fraction of the price of a custom kitchen. And that’s where you get a huge bang for your buck.

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[Graphic of a house rotates and changes into the CIBC logo.]