Getting a Home Loan in Australia if you're living overs...
29 Nov 2023
How much money you can make by renovating
So you’ve watched The Block and seen how much money you can make by renovating and you’re ready to get cracking on your own home renovation.
But not all renovations will add value - in fact, some renovations will detract from the value of your property so much they’ll make you wish you’d never picked up a hammer and drill to begin with.
A pool is a lovely thing to have on a hot summer's day and there are some cases where having one may increase the value of your home, such as if you live in a warm climate, you live in a neighbourhood close to schools where having a pool will be attractive to young families; or if you have a prestige property where a pool is pretty much expected.
But a pool can also act as a deterrent for many buyers in the mid-range of the property market who only see the upkeep and maintenance a pool requires, rather than the lifestyle benefits. Pools come with expensive operating costs, not to mention ongoing maintenance and cleaning - and not everyone wants to deal with that.
If you’re considering adding a pool to your home, consider the suburb you live in and the size of your block. If you live in a suburb where every second home has a pool and buyers in the area will expect one, it may be worth considering adding one. But if you live in an area where there’s not high demand for pools or your backyard isn’t big enough to accommodate anything other than a plunge pool, it may be wise to forfeit the pool.
While you might love those $400 per square meter tiles in your kitchen or the ornate $4,500 chandelier in the bathroom, you need to remember that buyers won’t have the same tastes as you and that it’s important not to overcapitalise on things (like expensive tiling) when you can get very similar looking tiles for a fraction of the price.
When it comes to renovating to sell, it’s best to stick with neutral colour schemes and universally popular flooring and tile choices. While you may be thinking “these custom tiles from Spain look amazing” most buyers will probably be thinking about the time and cost it will take to remove them because it’s not to their taste.
There are times when air conditioning can add value to your home, especially if you live in a hot climate and you’re only adding a simple split system which is affordable to be installed.
But if you’re installing a ducted system, costs can range from $10,000 to $20,000 depending on the size of the property, and you shouldn’t expect to make this money back.
You may love your custom art studio or your highly customised walk in wardrobe but the chances of this having universal appeal to buyers is pretty slim. While having highly personalised features in your home are obviously fine while you’re living there (after all, one of the biggest benefits of owning rather than renting is being able to do whatever you like) when it comes time to sell, it may be worth thinking about changing those spaces so they have more universal appeal.
The same applies if you’ve painted your house in really out there colours or have unusual flooring - while this may appeal to you while you’re living there, it has the potential to put buyers off who can’t be bothered making cosmetic changes or can’t see past them.
We all like to think we’re reno experts thanks to shows like The Block, but if you’re not confident in your DIY skills, you should avoid attempting any DIY work.
Most people think painting is a relatively easy DIY job but if you’ve ever watched The Block, you’ll know how deceptively tricky it actually is. Most people who attempt to paint themselves won’t tape things correctly, don’t know how to ‘cut in’ (painting the edges between wall and ceiling), won’t prep the walls properly and will just generally make a mess of it, which potential buyers will definitely notice and be put off by.
When it comes to renovations, it’s generally best to hire the professionals, especially for more complex stuff like tiling and electrical work - you should ALWAYS hire a professional for that.
Hidden home improvements, like rewiring, asbestos removal, termite removal, adding insulation, replacing the roof etc. are necessary to the function of your home and definitely need to be made, particularly in older properties, but don’t expect to see much of a monetary return for these. It can be frustrating because these fixes are often extremely costly, but they’re largely hidden and won’t necessarily be reflected in the selling price.
It’s definitely important to make sure your property has good curb appeal - but there’s a limit as to how far you need to go. For example, having some basic hedging is good - going the whole hog and adding a koi pond, sculpted shrubs and acres of vegetable patches is unnecessary and will likely be ripped up by the next buyer who can’t be bothered maintaining it all, or completely deter buyers altogether because of the amount of work required to maintain it.
If you’re ready to start renovating, check out some of our construction loans, or book an appointment with one of our friendly lending specialists to organise your loan pre-approval.
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