We are often approached by borrowers looking to obtain funds to extend and renovate their property. This may be creating the ‘dream home,’ or simply expanding to meet the needs of a growing family. Often times an owner may be looking to ‘spruce up’ a property prior to putting it on the marking. Either way, it is important to ensure that you maximise the value for your spend in order to maintain the resale value of your property.
There are several items that do and don’t result in a return on your investment, so we recommend being aware prior to spending.
- Landscaping – when selling a property, street appeal is critical. A buyer often makes up their mind before stepping in the property. If the property looks shabby from the kerb, the buyer will most likely be looking for reasons to knock down the price. If the buyers falls in love before crossing the threshold, they will be more likely to be finding reasons as to why they should buy the house. Adding a small deck, mulching garden beds, removing weeds and unruly plants, adding a small entertaining area, reticulating and maintaining lawns are generally inexpensive changes that add significant value
- Adding a bedroom – adding a bedroom may increase the property value from $50,000.00 to $150,000.00. This is of particular value in areas in close proximity to in demand schools, as the target demographic are families. This will of course depend upon available land on which to extend; some houses will have sufficient living areas to add a bedroom (or split an existing large bedroom) – loft conversions are also inexpensive ways of creating an additional bedroom
- Update the kitchen – this section of the house is generally seen as the most important. In the current environment, a fresh, open-plan kitchen is highly desirable. Whether a Bunnings kitchen (this is generally sufficient in a sub $500,000.00 market), or a bespoke kitchen, in terms of bang for your buck – this is a real winner
- Updating or adding a bathroom – in the modern world, single bathroom homes can severely limit the target market for a property. Even a small ensuite added to the master bedroom may increase the property value by $50,000.00. Tired tiles, plastic sinks and toilets, and outdated shower screens can be very off putting. A basic bathroom retile and upgrade can cost as little as $8,000.00 – but be careful to avoid any fittings or finishes considered to be ‘on trend;’ simple, classic styles are less likely to age and more likely to appeal to a broader market
- Swimming pools – unless this is a definite requirement for your family, these can be a real hit and miss addition. The cost of adding a pool ranges from $30,000.00 to $60,000.00 for a custom concrete pool. Add to this the cost of salt, chlorine, running a pool pump, topping up the water – the ongoing costs can be significant. For some buyers a pool can be a real point of difference, however for just as many this is an unwanted feature (that they may even fill in).
As with anything, we always recommend obtaining at least 2 quotes prior to commencing any work.
If you are looking to borrow in order to renovate, please contact one of the team at Flexible Capital to assess your options.
