You can increase the sale price of your home through minor renovations, or give it a real facelift and spend quite a lot.
The returns on home improvements can be in the vicinity of tens of thousands of dollars, except you need to be careful not to overcapitalise. A swimming pool, for example, may cost you around $50,000 to build, and you may only see the same value added to your home (if that), which is not a worthwhile investment. If you want a pool for your own enjoyment, go for it, but depending on your property value and your local area, it’s not likely to be a priority in your renovation budget.
On the other hand, a fresh coat of paint internally or externally and done (neatly) by you might only set you back $1,000 yet could add $10,000 - $20,000 to the value of your property.
A key point to remember is that visible renovations add more value to a property than invisible ones. If you rewire the house at great expense, it won’t necessarily add value. Buyers can’t see it, and they also expect the house to be wired safely as standard.
Renovating for capital gain means doing something that puts your place above the competition and has a bit of "wow" factor. Here’s a list of the five most profitable renovations you can make to increase your sale price.
A modern kitchen can add $50-60,000 to the value of your home, but they can also be costly, so be careful not to spend more than you will make back. You can purchase fantastic flat-packed kitchens for a few thousand dollars and assemble yourself, and you can also get the latest styles of appliances from discount retailers. Other desirable features include creating a butler’s pantry to hide your kettle and toaster away, or knocking down walls in older style kitchens to create an open plan kitchen and dining area. Island benches are also in demand. Before knocking down any walls, always do your research and make sure you check with a professional to ensure walls aren’t load-bearing.
Like the kitchen, this can be quite expensive but is worth it given buyers seek a modern kitchen and bathroom before most other features. Re-tiling and re-flooring can be a considerable expense, as can rearranging the room. To keep costs a bit lower, try to utilise existing plumbing outlets, rather than have them moved. If you can’t afford the full renovation, at least aim to re-grout the tiles to get rid of unsightly mould, and change tap, toilet and shower fittings to make it more modern. You can also successfully repaint existing tiles as well. If you only have one bathroom, consider adding another toilet in the laundry as buyers like the option of more than one. Remember, for any plumbing work, you must engage a plumber.
3. Re-painting inside or outside
Even if you get the professionals in, you can almost certainly make more back than you spent (except perhaps with weatherboard homes). An excellent paint job inside and out can add around $20,000 to your sale price. The average cost to paint a house is $20-$30 per square metre according to HiPages, with a two bedroom unit costing around $2,500 - $3,000 to paint. The exterior of a two-storey house is between $5,000 and $8,000 (with prices between $10,000 to $20,000 if it is weatherboard).
4. Outdoor Area
In our Australian climate, we tend to spend a lot of time outside, so renovate your outdoor area to demonstrate its versatility, low maintenance and lifestyle opportunities. That could include a deck and BBQ area, a shady pergola (depending on the climate and whether a permit is required), a fire-pit, child-friendly flat play area, appropriate low-care climate specific plants and inviting street appeal (including creating privacy from neighbours or traffic noise). Think about what sort of buyers you are targeting and create the right garden to appeal to the market.
5. Granny Flat or Shed
Depending on your location, many local government areas (LGAs) now allow you to build a granny flat without planning permission, which is attractive to buyers who may like an additional income stream or who may have elderly or teen relatives needing their space and privacy. These, of course, can be quite costly, so do your research to make sure you will see the financial return when you sell. Failing a granny flat, buyers love a great man-cave or “she-shed” and garage, so if your budget allows consider erecting a versatile detached building or shed. For any additional works of this nature, be sure to check with your local council about what’s permitted in your area.