Do home renovations & improvements increase the value of a property?
Home renovation is a tool used by homeowners and investors alike to add value to their properties. Whether they are upgrades for personal purposes or a major facelift before putting the home up for sale, renovations can do wonders for a home’s value – when done right.
Television shows such as House Rules, Buying Blind and Open Homes Australia frequently document the process of turning an eye-sore property into a work of art, making some people think the renovation process is such an easy thing to do. And some people think they can flip a home and make a living out of it. I had a client who thought this exact thing. He left his well-paying management job to flip homes as he thought he was quite handy with the tools. Unfortunately for him and his family, this was not the case and they had to sell their investment property for no gain. Real Estate agents love to advertise dilapidated properties as ‘fixer-uppers,’ when the truth is some should be bulldozed.
The key to any renovation success is having a budget and sticking to it. If you don’t you run the risk of building something outside the aesthetics of the general market. Some luxury upgrades are not actually worth it.
Some of the home improvements that can maximise your return eventually are:
The kitchen: generally considered the heart of most homes, and is well worth investing in, a fresh coat of paint, new cupboards and countertops, new tap fittings and an upgraded stove will usually do the trick.
The bathroom: is another room that can win the hearts of consumers. You can spruce it up with a paint job, replacing old tiles, showerheads, and handles, making it look bright and clean.
Flooring: outdated flooring can weaken a home’s impact, so a new set of floors can make your house look clean and modern. Carpets are still a great option for bedrooms, due to the warmth and comfort it provides. But if you are against carpets, rugs can have a similar effect.
Paint; a new coat of paint on the interior or exterior of a home is still one of the easiest and cheapest ways to achieve a cosmetic overhaul.
Street appeal; or curb appeal should not be ignored, as first impressions count for potential buyers. The key is to entice prospective buyers through the front door. So, some fresh paint, new trim and fencing, a clean garage door, as well as a new house number and a letterbox can complete the fresh look.
Garden: adding some green to your property can instantly add colour and life. Adding plants, shrubs and trees to your place is a good place to start, and this can be done without exerting too much effort or money. But be careful not to be too complex which can become hard gardens to manage, especially for those buyers who do not possess a green thumb.
Some improvements that do not improve the market value of a property; according to some real estate agent’s money spent on swimming pools, upscale master bedroom, extravagant kitchens, & hidden improvements such as double glazing, or expensive air conditioning systems etc only give you a minimal return against the dollars you have spent. So be wary of spending too much on these home improvement items.
And if you are going to be financing these improvements, please think about getting accurate fixed quotes for the job.
Good luck!
This article was written by Darrel Roberts, Head of Mortgage Lending Services at Inspired Money with over 30 years of experience in mortgage lending and accounting he is an expert in his field.
