Nicer home achieved with renovations may not always add value
We all want a nicer home but while some home renovations may better our present lifestyle, they do not necessarily increase value to your house.
By: Hitesh Khan/
Though it may not mean much right now, but when it comes time to sell your house, you might wish you had modernised the kitchen rather than adding a fully fitted bar at the living room.
The first step in trying to make a nicer home and making the decision to renovate is whether it makes sense to renovate.
You should ask yourself how long you plan to stay in your nicer home. If it is more than 3 years, an expensive renovation may not make sense because chances are you won’t be able to recover the money you put into it in a higher sales price. If it’s more than 3 years, an expensive renovation does make sense because you will enjoy the improvement, and have a better chance of recouping your investment over time.
Also assess where you live as in general, the higher-priced your home and neighborhood, the more renovations will pay off. That’s because nicer homes in fancier areas tend to appreciate more, and buyers tend to appreciate what you have done more and are willing to pay for it having already been done.
So which renovations pay off? Generally, 5 renovations that do add value to your property are as follows:
Property agents will tell you that they have sold numerous houses in the kitchen. Modernising a kitchen to be an efficient and effective kitchen definitely adds value to a house and of course makes it more saleable. Having built in cabinets and fitted hob, hood and areas designated for the fridge, microwave and oven (in some cases also for the dishwasher) really makes a big difference. Finishes for the flooring, walls and work areas that are practical to clean and are durable are preferred.
Big does not necessarily mean better but what is important is functionality.
2. Master Bedroom
The betterment of the master bedroom is also a sure bet value add to a property. The main add ons looked at are the built in cupboard, walk in wardrobes, a “suite” area for a sofa/reading area and floor and wall finishes.
If the master bedroom does not have an en-suite, then its advisable to explore with your renovations contractor or interior designer if you should add an en-suite bathroom, as this is a pre-requisite nowadays.
Also, built in cupboards in all the other rooms would also be a good idea.
Times have changed and the younger more affluent generation are more discerning in their lifestyle needs. The bathroom, being an essential part of our life, is very very important in a home. General modernisation to the WC”s, floor finishes and quality fittings are the main consideration in the bathrooms. The quality fittings include the WC, the sink, the taps and the shower heads.
4. Electrical and Plumbing
Older but fancier locations have homes that are at least 15 – 20 years old and the wiring and plumbing systems have almost reached their end already. These two items are very important and the most asked question when property agents are trying to sell residential properties.
Electrical systems are crucial these days where electrical consumption has increased due to various usage of appliances and also partly due to our liking for the air-condition. Rewiring an old house and upgrading the system is also important to ensure the safety of your family.
Poor plumbing is the ultimate frustration to those of you who enjoy a shower. Homes that have old systems are plagued by poor in-home pressure, rattling pipes and of course discolored and distasteful water. Upgrading the plumbing system will include new water tanks, water filters, new pipes, pumps and water heaters.
5. Overall Painting
The immediate “value-adder” as it is very visible. The trick is to ensure the paint job is done well and do not rush it, as a poor paint job is worse that a bad-hair day. Properties that are nice but have a poor paint job send a message to the potential purchaser that the seller is trying to hide something by doing a quick and cheap paint job.
It is like when you are selling your used car. If you show up with dents and scratches and bald tires, you are not going get top dollar for your car. But if you had the car painted and put on some new tires, you will be sure to get a better price.
In embarking in your renovations for that dream lifestyle and a nicer home, a good rule of thumb is not to leave too much of your own lifestyle in the house. The biggest mistake people make is do renovations that are very customised to their own wants and needs.
When trying to recreate a nicer home, try not to reach for personal loans, as they are much more expensive than renovation loans. The interest rate is around six to nine per cent per annum. On the other hand, renovation loans can have interest rates of five per cent per annum or lower. You should always use the renovation loan first, and use personal loans only after it runs out.
Renovation loans are capped at $30,000, or six times your monthly income (whichever is lower). This is usually enough to furnish a five-room flat or smaller, if you don’t get overly lavish. To find the cheapest renovation loans, you should speak to an expert loan consultant.
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