Increase your property value through renovation
Choosing the property
A critical decision involved with your value-adding capabilities is associated with selecting the right property type for your needs. If you can find an unpolished gem at a bargain price in a great suburb, you’re off to a great start. From there, it’s all about maximising your returns and ensuring you get the best possible sale price for a renovated home in that location.
Small projects that may increase value
There are times when simple upgrades can yield greater profits than large-scale projects. These can include;
- Paint. Freshening up the paint in a room or on the exterior of a house is a cost-effective way of transforming the appearance of a property.
- Street appeal. No matter how good the interior renovation might be, it’s the kerb appeal that can sway a buyer’s decision. Clean the bricks with a pressure cleaner and paint any peeling paint on gutters or eaves. Replace broken or rusted gutters and downpipes and be sure they’re painted freshly too. Shabby or unkempt gardens should be neatened up. Use plants and shrubs creatively to create an appearance of more space or to highlight features of the property.
- Floor coverings. Consider replacing faded, worn carpets or worn vinyl flooring with more modern options. It’s easy to transform a room into a more appealing space by considering different floor covering options.
Small projects that may increase value
There are properties that can be improved enormously by completing a medium-sized project. This is especially true with older style homes that may not have the same amenities and living space as more modern homes. Some medium-sized projects that may improve property value include:
- Outdoor entertaining area. Adding a pergola or outdoor alfresco entertaining area can be a big drawcard for many buyers, especially if the outdoor space flows smoothly from the interior of the home. Consider changing old narrow doorways to larger bi-fold doors or sliding glass doors to integrate the inside living area with the outdoor entertaining area for maximum appeal. Find out how much it costs to renovate your backyard.
- Kitchen. Updating a kitchen can be helpful for improving property values but ensure that you plan a functional kitchen design that leverages the available space to avoid overcapitalising. Learn more about kitchen renovation costs in Australia.
- Bathroom. Update old tiles and fixtures and consider creating more storage space in your bathroom with modern amenities to create a luxurious feel. Read our guide for bathroom renovations here.
- Laundry. Many older style homes have enormous laundry areas that are under-utilized. Consider adding more storage space or installing a workbench in the laundry. If the room is large enough, you may be able to divide it and install a separate toilet or even a small bathroom, including a shower and vanity area. This may increase the appeal of the home if there is only one main bathroom in the floor plan.
- Living area. Some older homes feature floor plans that have a small living area and a separate dining room alongside it. You may be able to improve the floor plan and create an open-plan feel by knocking down walls and redesigning what you have to create more space.
Renovation expert Cherie Barber's tips for renovating to increase value
- Don’t buy on the downside of the street. Don’t pay more than 2% of the property value on renovating the kitchen or bathroom.
- Use big tiles. Use horizontal tiles to make the room appear bigger.
- Due diligence. Ensure you ask the council whether there have ever been any building applications denied or withdrawn for the property, what the zoning is for the property and the surrounding neighbourhood and what development applications have been processed in the vicinity of the property. Big commercial or even residential developments are a bad sign.
- Invest in things that can be seen. Insulation, for instance, is not worth the expense for a cosmetic reno.
- Return. Make a minimum of $2 of return per dollar spent.
- Lift sales. Sell all the materials from your renovations at a demolition sale.
- Stagger your offers on property. As each bid gets higher, attach more conditions, such as immediate access to site to improve it, extended settlement to reduce your holding costs and a minimum deposit, i.e. less than 10%.
- Consult professionals. Surround yourself with qualified and trustworthy tradesmen.
- Renovate big ticket rooms. Upgrade your own kitchen and bathroom and then get the bank to revalue the property once these are completed. Use the proceeds to fund your first cosmetic renovation.
What qualities should I look for in a builder?
- Communication: Good builders should possess strong communication abilities as they will need to execute your ideas and objectives, and manage the project effectively.
- Expertise: Ensure that your builder is licensed and has relevant experience to carry out the required work.
- Reputation: Experienced builders will be happy to provide you with references and testimonials from previous customers as well as a portfolio of completed work.
To ensure that your builder is registered, you can contact the Builder’s Practitioners Board.
What responsibilities do I have if I’m undergoing a renovation?
This depends on the nature and scale of your renovation project, as well as the state in which you reside. If you’re just updating the kitchen or remodelling the bathroom, then you may not need approvals. However, if you’re building an outdoor deck or pergola or building on a new room you may need to submit your plans to council for approval.
As the homeowner, you are legally responsible for organising a building permit if required for your project. However, your builder can help investigate this on your behalf.
Kitchen or bathroom renovation? Which adds more value?
It’s well-known that kitchen and bathroom upgrades are some of the best ways to add value to your property. However, in Australia, renovating a kitchen is only the fourth or fifth highest adding-value technique, depending on the location. Bathroom renovations typically add more value compared to kitchen upgrades.