Which home renovation projects can increase re-sale value?
- You don’t need a full-scale renovation to boost sale value, with smaller upgrades like paint, lighting, flooring and street appeal often delivering bang for buck.
- Kitchens and bathrooms still matter, but cosmetic updates can be enough to lift value without the cost of a full overhaul.
- Renovating before selling is about timing and restraint, as spending too much (or renovating in the wrong market) can lead to overcapitalising rather than higher returns.
Renovating your home to increase sale value is no easy task. If you're considering putting your house on the market but don't know which renovations may help you sell for more, we've compiled two experts' tips.
The top renovations that may increase a property's sale value
Renovating is not always the case of 'go big or go home'. Some small home improvements can make a big impact, and many are DIY-friendly. On the flip side, no property renovation list is complete without the classic big ticket items: A kitchen or bathroom upgrade.
Improve the property's street appeal
The importance of a good first impression on buyers cannot be overemphasised. Potential buyers will form their first opinion on your property based on its exterior.
"As a seller, you want to make sure the landscaping is appealing from the front. This means fixing up the visible issues of the home that you can see from the street.
"Gardening, any landscaping involved, fencing, and even a quick render to a house can completely change the whole look of the home and make it much more inviting.
"You want potential buyers to come to your home and fall in love with it from the start."
Other things, like your street numerals, front door light, or letterbox, can easily be updated, and while you're at it perhaps considering pressure washing your driveway and brickwork. Whether you employ someone to do these upgrades or pop in to Bunnings yourself is up to you.
Refresh interior and exterior paint
Transforming a tired, old, and 'well-loved' home can be as easy as popping on a fresh coat of paint and can help to attract more potential buyers to your property.
One of Australia's leading renovation experts Cherie Barber says painting is the perfect place for renovators to start.
"Painting is within the skill level of most people, so it's something they can easily do themselves whilst also keeping it cheap and cost-effective.
"It has huge transformation effects. You can take a dated property and make it look brand new just with a lick of paint."
Mr Murphy recommends a light and neutral colour palette for both the interior and exterior of the home.
"Light colours have the ability to open up a small space, making it appear larger and brighter," Mr Murphy told Savings.com.au.
"They also allow the buyer to visualise themselves living in your home. This helps to de-personalise the property and create a clean slate for the new owner."
Keep in mind, when it comes to external painting, it's generally best to hire a licensed painter. Especially for high, hard-to-reach spots such like eaves and gutters.
Take time when considering lighting choices
"One of the biggest problems for a lot of homes across the country that haven't been renovated is that they will just have a single oyster light in the middle of the ceiling," Ms Barber explained.
"They cast yellow tones in the room and are very dull and dim. By default, they throw a lot of shadows around the room and they make everything look rather glum.
"By taking those out and swapping them for an LED downlight, all of your surfaces will become illuminated as light is bounced around the room."
Upgrading your existing lights to LED downlights is an advantageous move that won't break the bank. And because they cast light so well, you generally only need one or two in a room.
Don't forget window furnishings
Window furnishings are generally a bigger deal than people may think when it comes to renovating and selling a home. They regulate the light and heat in your property - two things that massively impact how everything else looks and feels to a potential buyer.
"A lot of people have vertical drapes, nanny's old lace curtains, or dark and heavy curtains in their homes which restrict a lot of light into the property and make it look smaller than it is," Ms Barber said.
"Replacing the outdated window furnishings with new modern alternatives will be complimentary to your property and make it so much more welcoming."
By updating the window coverings on a property you plan to sell, you're helping to show potential buyers how light and bright the interior can be. This can make all the difference when it comes to selling.
Replace worn or dated flooring
Ever walked into an old home and been welcomed by a musty and unpleasant smell? The culprit is generally the carpets. If carpets in your property are old, unclean, and look a little rough around the edges, then this may be the renovation project you want to undertake first.
"By changing the carpets, the house will have a completely different feel and smell to it. For potential buyers, there will be a subconscious thought that the house is fresher and a lot newer," Mr Murphy said.
While most homes do have carpets in the bedrooms, Ms Barber recommends getting rid of all your carpets completely and replacing them with floorboards.
"What a lot of people don't know is that carpets can actually make a house look a lot smaller than it is," she said.
"If you have mismatched flooring where you may have timber in one section of the home, and then have tiles in the kitchen, and carpets in the bedroom, I would suggest ripping it all out and have one consistent flooring throughout the entire home. Of course, with the exception of the laundry and bathrooms.
"By keeping consistency, your whole home will look larger which by default will add value."
Finally, take a long, hard look at your kitchen and bathrooms
Kitchens
A kitchen is one of those spaces you spend a lot of time in, so it's only natural that buyers tend to look at this room first when viewing a property.
While the cost of a kitchen renovation can vary, typically coming in at between $15,000 to $40,000, depending on the project. But you don't necessarily need to spend thousands of dollars to reap the rewards of modernised cooking facilities.
Cosmetically refreshing your kitchen can add a new feel without the need to make substantial changes to its structure. You might paint the cabinetry and tiles, replace cupboard doors and handles, or even procure new benchtops with a product like Granite Transformations, which Ms Barber highly recommends.
"With Granite Transformations, they come in and stick an 8mm layer of engineered stone straight over the top of your existing benchtop," she said.
"It costs around $2,000 to $3,000 and makes your benchtop look brand new for a slither of the cost compared to brand new stone."
There're always different ways to skin a cat if you're on a budget. As a general rule, for every dollar you invest in your kitchen, it should return you a minimum of two dollars on investment.
A well thought out and executed kitchen renovation that cost $20,000 should ideally provide at least a $40,000 uplift in value.
Bathrooms
There are also plenty of things you can do to modernise your bathroom on a budget.
"Consider painting your bathroom tiles, which you can do DIY if you choose. Also replacing the vanity, mirror, and other fixtures and fittings such as towel rails are an easy way to increase sale value," Ms Barber said.
When renovating your kitchen and bathrooms, keep in mind that neutral colours work best. You don't want to incorporate extravagant colours when selling your property, as you want to give the new owner a blank canvas to add their own personality.
Savings.com.au's two cents
Whether you're a renovation newbie or you've done it more times than you can count, you want to be sure that the money you're spending is worthwhile. You don't need to break the piggy bank and undertake huge structural transformations to your home in order to see an added value to your property's price.
If you consider your budget, the location of your property, and research the current market, you'll be in good stead to figure out which renovations are worthwhile for your home.
Do most people renovate before selling?
In a hot property market, owners tend to opt out of renovating their properties, as sale prices have gone through the roof.
"When the market was slow, people would get all the fixes done because they wanted the house to be as presentable as possible as you're only dealing with a few potential buyers," Mr Murphy said.
"In a hot market, there is no point to renovate as houses barely lasted one week on the market and you would get a ridiculous price.
"However, the hot market is slowly coming to an end so we may start to see renovations coming back into the mix."
Deciding whether to renovate your property before you sell is entirely your choice.
If you're unsure which renovations could benefit you, schedule a time to meet up with a local real estate agent to get their advice on where your house currently sits in the market and which renovations are hot and which are not.
How much can a renovation add to a home's value?
As every property is different and subject to it's own position in the market, there's not one particular rule that fits for all when it comes to return on renovation investment. However, according to Ms Barber, there is a good rule of thumb to follow for those who plan on structurally renovating their home.
"For every dollar you spend, you should aim to almost double your money back. So if your renovation costs $50,000, you're looking for your property to be uplifted in value by at least $100,000," she said.
If you don't have the funds to physically change the home's key features, opting for cheaper choices such as painting and gardening is a good way to increase sale value. You want to avoid getting carried away with unnecessary improvements or before you know it, you'll be buying a $2,000 shower head that probably won't change the value of your home.
This is called overcapitalising, and means you've poured more money into a home than it's likely worth. To avoid overcapitalising, consider how much renovated vs non-renovated properties in your area are selling for and compare the difference against the cost of renovations.
After all, if adding a pool will cost $40,000 but properties with a pool only sell for $30,000 more than those that don't, it's probably not worth putting in the pool (unless it will bring at least $10,000 worth of enjoyment to your life).
Do you need to plan renovations in advance?
If you're planning to renovate and sell your property in the near future, you need to take three things into consideration:
- Tradie availability
- Material avaliability
- Your renovation loan options
Don't fall into the trap of ordering your materials a week or so before you plan on renovating - order everything you'll need in as far in advance as possible to give the suppliers enough time to have it packed and delivered to you. You don't want to be caught having to settle for your second or third choices.
The same goes for your trades. Good tradies are generally under the pump - make sure to book them months in advance to avoid missing out.
You also want to look into your renovation loan options once you have an idea of how much money you're going to need. This is especially the case if you're thinking about gutting out your entire kitchen or bathroom (the most expensive renovations you can do).
Some of the options you can choose from include refinancing to a larger mortgage, taking out a personal loan, applying for a construction loan, or using credit cards. The first option is generally the cheapest, particularly if you're planning to sell the property and repay the mortgage in the near future.
If you're in the market for a low-rate refinancing home loan, check out some of the market's most competitive options below:
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