What is the best way to renovate your house so that you get a good return on your investment? Do you make your kitchen look like a cooking show studio? Create a bathroom that’s fit for a king? Or build a walk in wardrobe that even the Kardashian’s would envy?
There is so many ways you can improve the value of your house, but not all of them offer the same amount of returns. The sad thing about investing in property renovations is that you don’t always have your property value increasing by the same amount you put in. Replacing your carpet for $5,000 doesn’t increase your home’s value by $5,000. However, changing your spare room into another bedroom for the same amount might double that investment. There is a lot that goes into the valuation of a property, so we are going to cover some cost-effective ways you can get good returns on your investments.
Kitchen & Bathroom
Everyone’s favourite rooms to dream about, the kitchen and bathroom are everyone’s go to places when it comes to renovation plans. The kitchen and bathroom are the most expensive rooms to renovate due to the amount of labour and appliances that goes into creating them. Plumbers, electricians, jibbers, tilers, cabinet makers and carpenters are needed for these rooms, but the substantial investment is often worth the reward. A grand bathroom and kitchen can make or break the sale of a house, so this renovation usually provides a solid return. Just make sure you don’t overdo it and overcompensate for the rest of your house as you will find little returns, we will touch on this later.
Adding Room for One More
Another grand investment is the adding of a bedroom to your house. Turning a spare room or building a new one can increase your properties value substantially as it opens the door to the possibility of more tenants or bigger families. It’s no surprise that you see landlords cram as many rooms into their property as possible. Another thing you should take note of is the number of bedrooms that the other houses in the neighbourhood have. Make sure you have a similar amount of rooms as you don’t want to be the ugly duckling of the street. Property often gets valued by what your neighbours do and do not have. It’s best to be consistent, to ensure value.
Fix What’s Broken First
In terms of return on investment, fixing what is broken gives the highest return and value for your money. Broken structures, plumbing, appliances or even décor, decrease your property value a lot. Fix what is broken first and get your value back up. A small job such as repairing/replacing a broken fence could do wonders in improving your houses street view and bumping your market value up.
It’s 2018 now, and sustainability is becoming significant talking point. Making sure your home is energy efficient is a great selling point for families as well as a great way to help save the environment. Whether its LED light bulbs, 5-star energy rated appliances or getting insulation installed. Turning your house into an energy efficient home is a great way to add value and save money for those who live there, for years to come. Enquire with your power company about an energy audit and find out how energy efficient your home is and where you can make the biggest difference.
How your house looks via the street view is a big determinant of its value, so selecting the right colour scheme is a big deal. Neutral colours are your safest bet as they appeal to the majority, but you need to take into account what the rest of the neighbourhood is doing. Slapping on a coat of paint is a cheap and effective way to increase the appeal of your house. The value might not go through the roof, but aesthetics can make a difference in whether people fall in love with your home or not and how much they will be willing to pay to have it.
Good Old Fashion Tidy Up
Plain and simple, a tidy up of your house will further add to the appeal of your home. Fixing up the front garden, mowing the lawns and water blasting the deck can get your house, show home ready. It’s like making sure you have your best smile on for school photo day. Having your house looking great requires little money and helps make it a home.
Don’t Over Compensate or Spend
This tip is probably the most important one you will hear from us. You may find your investments giving little returns if your renovations don’t match up with the rest of your home or neighbourhood. No point buying a modern bright white kitchen set up if the rest of your home is a vinyl floored 60’s styled classic. You must be consistent as spending a fortune on high-end upgrades for one room can provide little to no returns if the rest of the house doesn’t match.
Additionally, this danger of over-spending is affected by what your neighbours are doing too! If you live in a low-end neighbourhood and you turn your house into a high-end home, you will find people won’t value it for what it is. Buyers would rather get a high-end house in high-end neighbourhood than to get your newly renovated high-end home in a low-end neighbourhood. So it pays to do your research and find out what your average neighbourhood value is. Be smart with your renovations as even though you see the value, others may not.
If you are planning on doing renovations to your house and are in need of some additional financing, you can apply online for a personal loan with NZCU South.
DIY loans from 8.9% p.a. (Lending criteria and conditions apply)