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Protected: Top 5 Dirty Secrets Contractors Use To Trick You
Replacing Cladding is The Best Bang For Your Buck
Remodeling Magazine surveys thousands of renovations and home sales each year to discover which renovation is currently giving the best value for your dollar (or “cost recoup”) using real world data, in it’s Cost vs. Value Report. Sitting again at the number one over-all position with a whopping 86.7% return on investment is Fiber-Cement Siding Replacement. Coming in second (for it’s category) at 80.4% is foam-backed vinyl siding.
This information is simultaneously beneficial and flawed for the purposes of EIFS / stucco. While the cementitious base-coat layer of EIFS is indeed “fiber-cement”, the actual product they are referring to is more than likely a solid-cement factory-made siding (such as Hardie Board), which has become popular due to it’s ability to withstand hurricane-force winds and debris. The problems James Hardie siding is currently dealing with (and that EIFS has long since corrected) is how to allow moisture to drain out that becomes trapped behind the siding (take a look at the hall of shame for an idea of what I’m talking about). I suspect that in the coming years the problems will begin to surface more frequently and it’s high value will drop some.
Then there’s the issue of geography. This information is based on data from the United States, not Canada. It is averaged over many different climates, not solely a cold-climate such as the one we have in Toronto. This means that energy efficiency renovations such as exterior insulation, or replacing a water heater, won’t have the same impact as they would have in Canada. On top of that, Toronto is by all rights the largest consumer of EIFS in North America – Canada and the U.S.A. While it’s not as popular in some of the states because of it’s history with lawsuits, that problem has been largely avoided here in Toronto using a different type of EIFS: Dual-Barrier.
Nevertheless, it shows that re-cladding your home is the sure-fire way of getting the most bang for your buck when it comes to home renovations. Factoring in the advantage of lowered heating bills in our climate due to the exterior insulation, and the superior aesthetic of EIFS to Hardiboard (and vinyl siding by a landslide), I feel confident in saying that EIFS renovations actually increase the value of a home beyond what a home owner pays for it. As much as 110-120%. Being that there is no data to back this up however, I’ll limit my claims to the next closest thing — the fiber-cement siding 86.7% ROI from Remodeling Magazine.
Exterior Insulation Government Rebates and Renovation Tax Credits
The Canadian Government is currently running two concurrent programs to help home owners with home renovations. These programs provide monetary incentives to home owners who perform renovations on their home, stimulating the economy by providing work for skilled trades, and benefiting the home owners by helping them increase their home value.
Retrofit Rebate Program
The first program is the Retrofit Rebate Program, in which the home owner contacts one of the Auditors listed on the Home Energy Audit Program website. The auditor performs an evaluation of where your home currently stands in terms of energy consumption and efficiency. This audit typically costs around $400, of which $150 is covered by the Government of Ontario. If you currently have a mortgage with Royal Bank of Canada (RBC), they have a program which covers the rest of the cost of the initial inspection, and unfortunately for the rest of you, they seem to be the only bank to do so. From the time of the inspection, home owners are given 18 months to complete any and all eligible energy efficiency renovations and have the auditor return to do the final inspection. Once the final inspection is complete, you are assessed for a rebate for upwards of $10,000 in the form of a cheque, split between the Government of Ontario and the Government of Canada, which tends to take 8-10 weeks to arrive. The genious behind this program is that these subsidized renovations actually DECREASE your expenses. This income gets spent instead on paying back the loan you took out (whether it was line-of-credit, or re-mortgaging), increasing your equity and investment in your largest asset — your home.
So why, with all the other renovations available, would you choose to re-clad your home with EIFS (exterior insulation finish system)? Simply put, it has the biggest pay back. Of all the renovations, exterior insulation (the “EI” in “EIFS”) provides the largest single rebate at $3,750. Furthermore, re-cladding your walls with EIFS has the largest potential to reduce your heating bills. See Saving Money on Heating/Cooling Bills. Additionally, EIFS helps improve air sealing — potentially adding another $480 to your rebate.
Home Renovation Tax Credit (HRTC)
The second program is the Home Renovation Tax Credit (HRTC), put on by the Canada Revenue Agency. Under this program, you are reimbursed for 15% of renovations between $1,000 and $10,000, for up to $1,350 [($10,000 ? $1,000) × 15%] on renovations done between January 27th, 2009 and February 1st, 2010. While the math may seem funny, it is nonetheless real money you get back. This money comes back to you in the form of a tax credit.
Simply keep your receipts/invoices for the renovations you had done (making sure that it is first eligible under the program), and present it to your accountant when you have your personal income taxes done.
Total Rebates and Credits
For the average $15,000 home EIFS renovation in Toronto, most home owners are looking at getting back $5,100 (plus possibly air sealing), putting the actual cost around $10,000. Factor in the increase in your home’s value and the money you save on heating/cooling bills and only a fool wouldn’t take advantage of this opportunity.
