Spark up a conversation about renovations at a dinner party and you can be certain that everyone will have something to say. While a recent Westpac report suggests 9 from 10 Australians agree that renovating is an excellent way to increase property values, it’s difficult to get a straight answer from anyone about the best way to spend your renovation dollars.
To help you separate the dodgy tips from the golden rules, we’ve compiled a list of tips that well practised experts agree on right across the board.
Don’t Overcapitalise
This is the number one thing experts agree on: no matter where in the house you spend your renovation budget, don’t spend too much! In order to ensure you’ll get a good return on what you invest, look at median prices in your area.
By examining comparable properties with the same number of bedrooms and bathrooms, you can get an idea of buying patterns in your area. Look at renovated properties and ascertain how much they are bringing in compared to similar unrenovated houses.
A good rule of thumb is to start with a budget of around 8-10% of your desired final price. You’ll need to adjust 1-2% depending on your individual area. Structural work will require a slight increase on investment, and if you’ve been around the block a few times and know your way around a good renovation, challenge yourself and drop your renovation spend slightly.
First Impressions Count
Any renovation expert will tell you that houses are often sold in the first ten seconds. Creating a welcoming façade will draw buyers in, and the more interested buyers you have, the more your property will sell for. Love at first sight is a persuasive thing, so pick up your pruners and paintbrush and boost your investment.
If your budget is putting a dampener on your grand plans, it’s still easy to improve your street appeal. Tidying overgrown gardens, investing in hedges for privacy or putting a high-pressure water cleaner to work on old pavers are small investments but they create big improvements.
Kitchens And Bathrooms Sell Homes
The thought of installing a new kitchen or bathroom is often enough to turn even the most committed renovator away. There is a perception that updating the kitchen and bathroom is a disruptive and costly job. To an extent, this might be true, but savvy investors can work around this with smaller cosmetic improvements.
A well-designed bathroom or kitchen will hold its value. If you’ve got great timber cupboards, consider a re-varnish or coat of paint to bring them back to life. Even the smallest thing, like fresh cupboard handles, can really modernise a dated room. Clean grout between tiles, replace chipped or damaged tiles and investigate new tapware to get ultimate bang for your buck.
If you feel your kitchen or bathroom is beyond a cosmetic refresh and you need a total update, try to avoid changing up the layout too much. New wiring and plumbing are chief culprits for jacking up prices. Unless your layout is completely impractical, stick to updating your appliances, benchtops, sinks and storage to soften the blow on your budget.
Kitchens in particular are often cited as deal breakers for potential purchasers. One expert recommends not investing more than 2% of your property value in a kitchen update. A luxury kitchen will be an excess of $20,000 but good value kitchens are available for $7500 – $12,500. When you consider that a well thought out kitchen renovation can return three times its original investment amount, it pays to send a bit of your renovation budget in that direction.
