Selling Your Home? How New Windows Can Save You Money and Boost ROI
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Energy efficiency has long become a trend in Canada. With the government supporting Canadians in their plans to renovate old and new houses to improve thermal performance and energy efficiency, many investors and regular homeowners began giving energy-efficient home improvements a significant consideration.
Renovating windows and undertaking related home improvements before selling a house can significantly impact the value and return on investment (ROI) for Canadian homeowners.
As many homeowners consider upgrading their windows, it’s crucial to understand how these improvements affect the bottom line. This post will break down the potential ROI of window renovations, the benefits of new windows for buyers, and the cost savings associated with energy-efficient windows taking into account some specific real case studies.
Let’s Cut to The Chase – Will the Home Renovations Pay Off?
The return on investment for home renovations, specifically window replacements, can differ based on several factors, including the renovation cost, the local real estate market, and the house’s condition before renovation.
According to the Royal Bank of Canada (RBC) Home Value Estimator, a window replacement is one of the top-rated home renovation projects that comes with a whopping ~70% ROI.
In terms of return on investment, replacement windows are second only to the kitchen (80% ROI), bathroom (75% ROI) and hardwood floors (75% ROI) renovations.
But what is more interesting here is that new windows will come with a much more affordable price tag: while the best windows on the market will cost homeowners around $7,500 to $10,000, the “more attractive” home improvements will need you to hit x2-x5 spendings:
- Kitchen reno – $35,000 to $50,000
- Bathroom reno – $38,000 to $51,000
- Hardwood floors – $17,000 to $23,000
The data provided is for the high-end products, but the % data is the same even if you go with the cheapest or medium product alternatives:
Another bonus point is that homeowners can actually benefit a lot from federal and provincial rebates when doing energy-efficient home renovations. One such program is the Canada Greener Homes Grant, which works nationwide and offers homeowners from $125 to $5600 for implementing energy-efficient renovations, where window replacement can claim the maximum rebate amount. Homeowners in Ottawa can enjoy even higher benefits, such as $10600 in rebates for windows & doors replacement projects.
All these combined make residential window replacement a tremendously popular and rewarding home improvement.
To break down some figures, here is the case study to consider:
For example, a homeowner in Calgary with an average-priced house bought in 2018 for $600,000 could potentially see an increase in value of around 0.81% after spending $8000 on new 6 medium-sized high-end windows, considering a 70% ROI.
- Here is how this can be calculated:
Estimated Current Home Value + (70% x Cost of Renovations) = ARV*
*After Renovation Value
According to the data, the estimated current value of the home bought in Calgary in 2018 for $600,000 would be around $777,400.
According to the formula, we get the next figures:
$777,400 + (70% x $8000) = $783,000
In addition, you can add here the savings from the federal rebate program, which is going to be $250 x 6 = $1500. This way, the actual investment into new windows would be around $8000-$1500 = $6500. Taking into account the ARV of the house, homeowners get an amazing boost in energy efficiency, curb appeal and overall comfort for just $900 (($783,000 – $777,400) – $6500)).
The exact figures will depend on factors like the specific windows chosen and the housing market in the area. If you also add here the energy savings your new replacement windows bring, the worth of this investment will skyrocket.
Key Reasons Buyers Want Houses with Already Renovated (Replaced) Windows?
New windows are often a selling point for potential buyers, and there are several reasons for this tendency:
- Improved energy efficiency: Energy-efficient windows can help homeowners save on heating and cooling costs. They prevent drafts and minimize heat loss, ultimately lowering energy bills.
- Better noise reduction: Double or triple-pane windows can significantly reduce the outside noise entering the home, providing a more peaceful living environment.
- Enhanced curb appeal: New windows can give a home a fresh, updated look that attracts potential buyers.
A 2023 Canadian Home Builders’ Association survey found that energy-efficient windows are still (4 years in a row) among the top 10 features Canadian home buyers desire. This demonstrates the importance of window upgrades when looking to sell a home.
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How Much Can Homeowners Save with New Windows?
Upgrading to energy-efficient windows can lead to cost savings, particularly in terms of energy bills. Here’s a breakdown of potential savings associated with new windows:
- Energy bill savings: According to statistics, upgrading from old inefficient (single-pane) windows to ENERGY STAR-certified units can get you around 12% in energy bill savings.
- Government incentives: Homeowners can also take advantage of government financial support programs like the Canada Greener Homes Grant, which offers up to $5,600 in grants for energy-efficient home improvements, including window replacements.
To illustrate the potential savings, let’s consider a simple case study: a homeowner in Canada spends an average of $2,000 per year on heating and cooling, with nearly 1 in 10 Canadians spending more than 10% of their income on heating or cooling their home.
Upgrading to ENERGY STAR-certified efficient windows could save up to $240 per year (12% of $2000). Over ten years, this translates into $2400 in energy savings. These savings, combined with the increased home value and government incentives, can contribute to a higher ROI for the window replacement project.
The Bottom Line
Investing in home renovations such as window replacement can significantly impact house prices and ROI for Canadian homeowners. New replacement energy-efficient windows can provide many benefits, including increased energy efficiency, noise reduction, and improved curb appeal.
Additionally, homeowners can save on energy bills and take advantage of government incentives, further increasing the overall ROI of a window replacement project.
When deciding to embark on a window renovation project, it’s vital to research your local housing market, available government incentives, and the specific type of windows that will best suit your home.
Contact Ecoline experts today, so we can consult you on the right window choice, provide a free estimate and help you claim the maximum government rebates to support your project!