To help you determine the financial merits of a few renovation projects, we asked many property industry professionals from around the country how each project would affect the resale value of a medium-sized (250m2) property in a desirable suburb. Based on the consensus of these home-marketing professionals, a recovery percentage was estimated for each project. Remember that local economic conditions will influence the actual resale value of your project. And consider these value-enhancing tips before you start.
Keep your property value variation between 15% and 20% of others in your suburb. Buyers who can afford more expensive homes will shop in more expensive areas.
Useful Hints:
• Bathroom renovation (60% - 80% return) - revamp your bathroom with two basins and a separate shower and bath.
bathroom renovations are among those most likely to generate a good resale return on expenditure.
What is more, you needn't actually spend a fortune to modernise your bathroom - as long as the plumbing all works.
The most cost effective changes include:
- Replacing countertops and flooring with inexpensive tile;
- Re-enamelling the bath and basin;
- Re-grouting existing wall tiles;
- Repainting ceiling and un-tiled walls white or a light colour;
- Installing a large mirror above the vanity; and
- Replacing old taps, light fittings and towel rails.
• Kitchen renovation (60% - 80% return) - place emphasis on cleanliness, storage capacity and spaciousness.
• New room (70% - 80% return) - don't overdevelop (for example, a third bedroom addition is more valuable than a fourth one).
• Master bedroom en suite (60% - 80% return) - make use of existing space rather than adding on.
• Patio - given the right attention a patio creates a homely atmosphere.
• Landscaping - easy maintenance and tidiness.
Renovating a home is part of maintenance, for example, repainting the house and replacing gutters. These expenses usually prevent your property from deteriorating but will not contribute to its appreciation in value. The upgrading of the property by replacing carpets with tiles, retiling the bathroom or adding another room may increase its value. These items are considered to be of a cosmetic nature and any increase is minimal compared to their retail cost.
Looking after and maintaining your property in a marketable condition requires continuous care and investment, however, it is important not to overcapitalise on your property. Always keep a record of your expenditure.
