Renovating your home to improve its form and function for your family is one thing; essentially you're working with a blank canvas – you have the creative freedom to do as you wish within your budget. Renovating with the intention of adding value before selling is quite another.
There are many factors to consider in a do-up aimed at potential buyers. Cost versus return is of course a major consideration, as is ensure that any renovation retains as much neutrality as possible, allowing the new owners the freedom to add their mark.
The types of renovations that add value vary in different areas and at different ends of the market, so it is well worth doing your research before embarking upon any renovation project with the aim of increasing the property’s sale price.
A good starting point is to get a registered valuation done so you know the value of your home in the current market. Then, if you’ve got some ideas about what might add value, think about what is considered desirable for your intended market and try to understand what the property lacks, or how it could be improved. One way to do this is to look at the types of houses that are selling well in the area, and which properties are fetching the highest prices.
Refresh Renovations Consultant Wayne Gordon says the best way to do this is to be nosy: go to open homes in the area, and be clear about how your home stacks up. “Once you’ve got clear a clearer idea of what sort of renovation you are going to undertake, it can be a good idea to get proper costing and concept drawings done and then get a market appraisal so you can have an even better idea of what those plans would do for the value of your home,” Gordon says.
Bayleys National Residential Manager Daniel Coulson says a general rule of thumb is that a good return on investment delivers at least double what the renovation cost. “However, this can decrease if homeowners buy fixtures and fittings that cost more than standard so it is always best to follow the industry medium,” Daniel says. “Any renovations done should not only be cost-effective but must also add size, space or value.”
While there are small things that can instantly add value and appeal to your home, such as tidying up outside areas, completing any minor repairs or painting, more significant renovations are likely to provide a higher return.
Bedrooms and living areas are usually the cheapest rooms to renovate due to the minimal plumbing and electrical work required to update or add them. “Adding a bedroom to a property usually generates a higher return on your investment: for every dollar you spend turning a three-bedroom house into a four-bedroom house, you’ll usually double your money,” Daniel says.
Refresh Renovations Consultant Jim Gleeson says, generally, the most economical way to add a room to a house is if there is a sub-floor basement area. “It can be worth investigating whether you can create a liveable space in that area and turn a two-bedroom, one-bathroom house into a three-bedroom, two-bathroom dwelling. This sort of renovation can add significant value and buyer appeal. Renovating areas that are currently accessible but not liveable spaces is often the best way to add value to a home.”
Real estate agent Michael Boulgaris says the addition of an extra bedroom or living area almost always add value, as long as the rooms added are adequately sized. “An extra room can have a return on investment of around 10 per cent.”
Bathrooms and kitchens are focal points for many buyers and can make or break the sale of a house. An updated kitchen or bathroom with modern amenities provides instant appeal to a home, but these rooms are also potentially the most expensive to renovate. There is generally always scope to revamp a bathroom or kitchen without redoing the whole room. For example, changing cupboard doors and handles rather than the entire kitchen is a lot more cost-effective and can dramatically improve the look and feel of a room.
If you are completely redoing the kitchen or bathroom ahead of a potential sale, it is important not to overcapitalise and ensure modest fixtures and fittings are chosen. “If you can completely upgrade the kitchen and bathroom/s, it will put the home on a whole new level,” Michael says. “The return on investment for kitchens and bathrooms always sell for a good price; they are particularly attractive to those people who don’t want to go through the hassle of redoing anything themselves. People will pay more for the finished product.”
Garages generally deliver the lowest returns in terms of adding value according to Daniel, but integrating internal or external garages into a dwelling as either a bedroom or additional living area adds value by maximising the potential of all useable space. Additional storage areas can also be a drawcard, so if you’re thinking about adding garaging, it might be worth considering what would appeal to prospective buyers, such as a mezzanine storage area, or lining and insulation if the room was to be used as a sleep out or office area instead of for vehicles.
In the more expensive inner-city areas garages can add considerable value though. Michael says. “For example, in areas where parking is at a premium, on a million-dollar-plus property, the addition of a garage could offer a return on investment of around $100,000.
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This home renovation advice article featured in Issue 018 of Renovate Magazine. Renovate Magazine is an easy to use resource providing fresh inspiration and motivation at every turn of the page.
*All information is believed to be true at time of publishing and is subject to change.
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