Doing renovations to your home adds to its value and increases your chances of selling above the original asking price.
But in today’s market, the value to cost ratio of renovations can differ radically. This is why not all renovations can improve upon your property’s value. Knowing which revamps and repairs are worth undertaking can make or break your profit margins when it comes to reselling.
In this article, we will look at different renovation trends around the globe, and examine which ones will add value to your home. But first we start with a warning from Australia.
Not all renovations add to value
One mistake people make when renovating is doing DIY when they shouldn’t or not hiring the right people. Home renovation expert Cherie Barber from Australia notes that while going DIY is your judgment call to make, hiring professionals can ensure a neater and more professional finish—especially in jobs such as re-painting a room. Hiring a “cheap” plumber from Craigslist or NextDoor, for example, is a mistake that can cost you in the long-term. By doing projects yourself, you also run the risk of it costing you much more, especially if you are inexperienced.
Another key thing to consider are property taxes. States and local laws require a regular update of annual tax rolls and renovations add to your tax bills. While adding features and remodeling a house might sound like the best way to upscale your property, if you are not careful unforeseen levies can easily eat away at any profit you may have made.
But which renovations actually add value?
Add space and depth
Don’t be afraid to tear down a wall or two. An open floor plan home looks larger and more appealing to customers who wish to customize. In Singapore, open concept floor plans are popular now that HDB flat alterations are common. But avoid tearing down walls between rooms. While it sounds counterintuitive, as everyone loves a large master bedroom, this can drive away buyers looking for higher room numbers.
Dark rooms are only valuable when they’re a part of a modern aesthetic. Otherwise, they can dampen your property’s saleability. More space means more value—that’s real estate.
Making changes that lets more natural light in can be a great add-on to your home. Try introducing vaulted ceilings. By letting in more natural light, your home will look brighter without the need to add too many light fixtures.
First impressions last. That’s why repainting the front of your home is more affordable and more cost effective than resurfacing. Put in a potted plant or two to improve the appearance of the front of your house. A study from property giant Zillow found that, in the US market, simply having a black front door increases the selling price by 2.9%. Similarly, add a deck or a porch if possible. Realtors suggest that decks improve the overall potential price of a property as it adds the illusion of increased space.
Enhance curb appeal
As this is the first thing buyers will see, it’s critical in their value-forming opinion of your renovated home. Clear the front area and prime potential buyers with a strong first look.
Improve home heating
It’s the little yet significant add-ons that make renovations worthwhile. Improving the home’s heating system is a key feature especially in areas, which experience very cold weather. For example, in the UK Home Building highlights how upgrading the central heating system will “add more to the value of a property than it costs and should be done in conjunction with improving the general energy efficiency of the building”. This can range from sealing any drafts to replacing the windows with double-glazing.
Another aspect of upgrading the heating system is making sure the boiler is up-to-date. British plumbing company HomeServe recommend to their customers that they invest in a new boiler if they have had an older model for an extended period of time – say, for over 10 years. A new boiler will be able to deal with advanced heating systems much more easily, something that will attract potential buyers looking to modernize their home.
Update the bathroom
When updating bathrooms, HGTV Canada recommends you avoid quirky tiles altogether. If you really need to place them, opt for simpler ones. According to The Globe and Mail, the latest Canadian bathroom trend also saw the return of terrazzo, as it’s a stylish and elegant alternative for your bathroom material needs. You should also avoid getting rid of all the bathtubs as families with children will look for them when choosing a house.
Like kitchens, there’s an ambiguous factor in property pricing when it comes to bathrooms. Some realtors call this the “joy factor”. When bathrooms are out of date or there aren’t enough bathrooms in the house, potential buyers care less for the property.
Lastly, stay away from costly and indulgent renovations with heavy customization. Chances are your potential buyers will want to do some renovations themselves. Keeping renovations to a minimum will not only improve your property’s value, it will give your buyer bang for their buck.
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