3 Reno Projects That Add Value
If your home is feeling a tad dated and you’ve been thinking of selling, you may be wondering if it’s worth doing a renovation. It’s true that renos can be costly, but they can also add immense value and result in a higher sale price for your property. But how much should you commit to and where? We look at what you should spend and why, as well as the three reno projects which are most likely to result in a heftier sale price.
It may seem a lot of effort, but renovating is worth it. In fact, completing a home renovation could add up to 10 per cent to the value of your home. For a house that would normally cost $500,000, that’s $50,000! This should give you a good idea on how much you should be willing to spend too. The rule of thumb for renovations is to not spend more than 5 per cent of your home’s value - anymore and you will likely lose money rather than make it.
So, when well done, a home renovation can generate a fantastic return on investment. Just remember to stick to the theme of your home as an ultra-modern look in an older cottage could ruin your home’s aesthetic and put people off.
The kitchen is the most popular renovation to take on. However, it’s also one of the most expensive areas to renovate, with recent Improvenet research showing that the average cost of a kitchen remodel comes in at a little over $22,000. Given the 5 per cent budget you should be aiming for however, this should be within reach for most homeowners.
Of course, the end cost will greatly depend on how large an area your kitchen occupies and whether you opt for a full remodel or just an update to key features like cabinets and splashbacks. This could range from as little as a few hundred dollars all the way up to $75,000. While this may seem expensive, if it’s within your budget then it can be very much worth it.
According to HGTV, it is possible to renovate a bathroom for $100 per square metre. For small areas, that can mean less than $5,000 without heavy customisation. Brian Johnson from Collaborative Design Architects also told HGTV that you should always add a 30 per cent allowance to your budget, as sometimes things go awry, and costs can blow out. If you choose to add a new toilet, bath or shower, renovating the bathroom can become expensive - up to tens of thousands of dollars.
And as for returns? Gary Caulfield from Construction Cost Consultants told Westpac NZ that bathrooms can offer a return of up to $1.50 for every dollar spent on it. Gauge the suburb and your potential buyers to know if they would want luxury or practicality. Working this out with an agent and a professional remodeler is always a good idea.
If you’ve found yourself in the enviable position of having two lounges, or perhaps a basement or attic that could be converted into a new bedroom, you might just have hit a goldmine. Mr Caulfield also told Westpac that you can double your return when you turn a three-bedroom home into a four-bedroom one.
But what about the cost? In a recent Domain article, it was estimated that adding a 20 square metre bedroom would cost anywhere between $50,000 and $70,000. This will be significantly less if you already have space in your house. Graeme Bell from GDB architecture converted a loft into a room for a mere $10,000. However, you are unlikely to get such a cheap renovation going unless you are an architect yourself, but it shows how it can be done on a small budget. Given the rising real estate prices in many of our cities, you could be in for significant profits too.
Crucially though, you have to keep a cool head. Engage professionals for quotes and get a set budget from several different firms - if they vary wildly, you need to be careful you're not getting ripped off. On top of this, make it comfortable! If you don't enjoy using these rooms while you live there, how can you be sure potential buyers will? So, no flashy colours or experimental designs. Keep it beautiful and functional for solid value-adding.
If you’re still uncertain what to do next, our sales agents are always more than happy to sit down and discuss with you what the market trends are so you can make an informed decision. They even offer obligation-free appraisals so you can get a thorough idea of your home’s current value and what more you could do to maximise its sales price. Simply contact our team today to book your free market appraisal and find out how you can add value to your home.
When you know the facts about the value of your most important asset you can make smarter decisions that more positively affect your current and future financial wellbeing.