Renovations can make us happier in the places we call home, but some updates can add more value than others when it’s time to sell or refinance.
Some of the best home renovations — think an updated kitchen, new deck or remodelled bathroom — can get pricey. That’s why it’s helpful to know what kind of return you might expect before deciding to take on a remodelling project.
It’s a tricky dilemma – determining how much time, money and blood, sweat and tears you should invest in renovating, fixing or just tidying up your house before putting it up for sale. Because, well, we all want the best return on investment. But usually, by the time we decide to sell our house, we’ve already set our mind and sights on newer, more exciting projects – like buying or building our own new home.
And, time’s precious, as is money. So what’s worth the time and cash investment for a substantial reward?
The Difference Between Investors and Owners
Updating an investment property is generally a sound strategy—if it’s done the right way. Successful advocates of the fix-it-and-flip-it philosophy are investors, with the investor’s mantra of “buy low, sell high.” So they purchase run-down homes at bargain prices and save money on the repairs by doing most of the work themselves. A little sweat equity goes a long way toward making a real estate investment profitable.
They carefully choose their remodelling projects, too, focusing on those that will result in the most value for the least amount of effort and cost. Part of the process includes paying attention to the other neighbourhood homes to avoid over-improving the property. If none of the other houses in the area have crown mouldings and Corian countertops, adding these amenities is unlikely to result in a significantly higher selling price. Check out our range of dual occupancy builder for your dream house.
Owners, on the other hand, often take a less strategic approach when sprucing up their homes. As a result, they can end up putting significantly more money into a project than they will get back out of it when they sell. While it’s undoubtedly a smart move to make a few improvements, no one should overdo it.
How do you know which upgrades are worth the hassle and expense—and which aren’t? To make the most of your remodelling, it pays to keep four types of projects in mind: the basics, curb appeal, value-added, and personal preference.
Home Improvements That Are Worth The Money
Increase Light and Space
Dark, cramped rooms are no good when it comes to real estate. One thing that homeowners can do to increase their property’s appeal is to open up the house to create more of a flow and enhance natural light. Consider knocking down some walls to brighten up space. An open floor plan will also make a home feel much more significant and is better for entertaining. Perhaps you’ve wanted to do this for years but worried about the cost. It’s time to answer the question, how much does it cost to knock down a wall?
Vaulted ceilings are another idea that can help create the illusion of more space. Skylights can help flood your home in natural light. There are several options when it comes to brightening up your home with natural light, and these options have a range of prices.
Landscape & Curb Appeal
The curb appeal of your home is essential when it comes time to sell. The first impression of a house that someone will have is from the look of the exterior. It is said that a good first impression of a home can add five per cent to its value. Make sure your exterior paint and details are up to par. The driveway should be appropriately paved, and any lawn space should be adequately maintained. Consider drought-tolerant plants if you are not great at gardening. If you have a deck, add some nice furniture, or create a colourful garden in some extra space.
Create a Home Office
With more companies giving employees the option to telecommute, a home office can add value to a home. If you have some extra space in your home, consider converting it into a home office. Make sure there are plenty of workspaces. Remember to have grounded outlets installed and data ports, and possibly an extra phone line.
Consider Adding a Deck
It has been determined that when you spend the money to add a deck onto your home, you will likely be able to recoup more than eighty per cent of its cost at sale time. If you choose to install a deck, take some time to plan it out and develop unique features such as built-in benches or a fire pit if your city or town allows them. Use higher grade materials to increase the life of the deck.
Finish Your Basement
If you don’t have enough space to add a room to your home, consider finishing your basement. A basement space can easily be turned into a playroom for the kids, a bar, or a media room, relatively quickly. Consider adding a bathroom if you do remodel the basement, increasing the remodel’s value even more. Try to keep the space as open as possible, so it does not feel dark and cramped.
Update or Add Bathrooms
Bathrooms are an essential part of a home. If there are not enough bathrooms or are very outdated, it will be a big turn off to potential buyers. Updating bathroom amenities and fixtures or adding a bathroom if you have space can increase a home’s sale appeal.
Update Your Kitchen
The kitchen can add value to your home, but it is also essential to be careful. When planning a kitchen remodel, it is crucial to consider your materials’ cost versus the value. Based on your home’s price, if you choose to install granite or marble countertops, will you be able to recoup that money? Take a close look at costs when remodelling kitchens. Things such as updated appliances or a window over the sink can add a lot of appeals.
There are tons of different projects that can be done around the home to increase value in addition to the ones listed above. As long as you take the time to plan accordingly and don’t overspend, you can make some nice upgrades to your home. For some more remodelling ideas, take a look at the following pages. Planning for a new look for your house? Look no further! Home Builders is here to help in your dual occupancy builder Melbourne.
Types of Home Renovation
The basics are those things that buyers expect when they purchase a home. This includes a roof that doesn’t leak, functioning gutters and downspouts, a dry basement, a reliable furnace, solid floors, walls in good repair, and retaining walls that work. Most potential buyers also expect your home to have functioning plumbing and HVAC systems. In upscale properties, the basics might include a certain number of bedrooms, bathrooms, multiple-car garages, and other standard amenities.
This doesn’t mean you have to upgrade all of it. You can focus on regular maintenance and more minor, cheaper improvements that keep everything in good working order. Adding these items to a home that lacks them doesn’t add value; it merely brings the property up to the standard level of the rest of the houses in the neighbourhood, ensuring that you can ask for a comparable price.
On the other hand, while you want your house to stand out from the competition, you shouldn’t make unwarranted upgrades that greatly exceed other properties in the area. Not only will you end up losing money, but you may also scare off potential buyers. In short, before you invest tons of money in an elaborate full-house renovation project, consider what the competing properties in your neighbourhood have to offer. Find out how similarly priced homes in your neighbourhood measure up and make improvements based on your specific marketplace.
Items that add curb appeal help the property to look good when prospective buyers arrive. While these projects may not add a considerable amount of monetary value, they will help your home sell faster. Curb appeal items include a well-manicured lawn, low-cost landscaping, fresh paint inside and out (at least the front door), cleaned carpets, and new fixtures (even redoing the address numbers). You can do these projects yourself to save money and time.
Err on the side of plain vanilla, though. Now is not the time to incorporate bold design choices into the décor. Subtle accent walls and tasteful backsplashes are simple design features that will add to your home’s appeal.
Lighting is another element that can break the bank. While you want the house to look bright and inviting, you don’t want to overdo it or overrun your home circuitry. Instead, consider installing recessed or LED lights for a modern-looking upgrade. If you need help with these projects, you can consult an interior decorating professional. Just make sure you lean toward inexpensive choices.
Avoid bold design choices in your décor. Subtle accent walls and tasteful backsplashes will more effectively add to your home’s appeal.
The projects that add considerable value are big favourites of fix-it-and-flip-it advocates—and they should be high on a homeowner’s list too. While most of these efforts will not recoup their costs, some will come close. The National Association of Realtors (NAR) cites new siding, kitchen renovations (new countertops and state-of-the-art appliances), and new windows as projects with some of the highest return on investment, often recouping 80% or more of their costs during resale. Upgraded bathrooms, refurbished decks, and energy-saving improvements also offer a lot of bang for the buck.1
Personal preference projects are nifty items that you want but that other person may not like or be willing to pay to get. These include amenities such as swimming pools, tennis courts, hot tubs, wine cellars, basement game rooms, and ponds in most areas of the country. Believe it or not, a swimming pool rarely adds value to a home. First of all, it usually costs a small fortune to have an in-ground pool installed. Secondly, many homebuyers view a pool as a high-maintenance hassle and safety hazard—especially as it’s something that’s useable only a few months out of the year (unless you live in a tropical climate, of course).
There’s certainly no harm in adding these items to your house, but don’t expect potential buyers to be willing to pay a premium to get them when you are ready to sell. And be wary if the renovation means replacing a popular or commonplace feature. If every other home in your neighbourhood boasts a two-car garage, you should probably think twice about converting yours into a game room. Do you want to be the only house in the area with no protected place to park?
Why Should Homeowners Consider A Home Renovation?
Remodelling your home adds to your enjoyment, but it can boost your home’s value over time too.
When you refinance your home, for instance, renovations will be taken into account when a property appraiser assesses your home’s current market value. A higher home value means you’ll have more equity and a lower loan-to-value ratio. You might even be able to cancel private mortgage insurance payments earlier than anticipated.
When you sell your home, buyers will want to see a clean, well-kept home with modern updates that’s move-in ready. Plus, if you live in a competitive housing market, your listing might be competing with other upgraded homes for buyers’ attention. Finding the right duplex build is an important decision. Check out our range of the best home design constructions at Home Builders.
How Much Should You Invest In Home Renovations?
Before you shell out big bucks for custom updates in your home, having a solid understanding of what renovations yield the highest return for the money is critical. You also have to consider your budget and your renovation goals to ensure you can be as efficient as possible since remodelling professionals will need this type of information when meeting with you.
It’s essential to keep in mind that costs can vary significantly by region based on the cost of labour and materials and the level of service offered.
Still, there is some value in adding personal touches, even if it’s the fact that you’ll get enjoyment from your renovations while you’re the homeowner.
Regardless of the project, you are considering, remember that your primary residence is not just a house; it’s your home. If you plan to live there for many years to come, add amenities that you want to have regardless of their impact on resale. When it’s time to sell, do the basics to get the property up to par for the neighbourhood and add some curb appeal but don’t bother undertaking an extensive array of projects strictly to increase the property’s purchase price.
Elaborate custom upgrades may appeal more to you than to potential buyers. It’s best to keep renovations small, neutral in looks, and centred on improving the functionality of your home. And remember, even with the real estate renovations known to add value, the chances are good that you will spend more money than you will get back in return.