Is renovating your property worth it?

With the current financial relief of accessing superannuation, government incentives to renovate as well as the increased emergence of renovation television shows over past years, we are starting to see more property owners choosing to renovate or upgrade their property.

The renovation could be an extension to the property, a long overdue facelift, a re-model to make it your own, or simply a process undertaken to capitalise on the property and make money and build the asset.

If you are considering selling a renovated property in the short-term, or want to make money from your renovations, you should take the following into consideration to ensure that you do not over-capitalise.

Tip 1: Know the value of your property before you undertake the renovations.

Tip 2: Know your local market.  What is the average price for similar properties?  What is the lower and higher priced range?  How are these properties presented? To really get to know the market, take the time (if possible) to drive past and view these properties.

Tip 3: What will your renovation realistically cost?  Take the time to obtain several quotes from the outset.  Always add an extra 10%-20% on top of your anticipated costs and allow and budget for the unexpected costs.

Tip 4: Engage an expert builder or project manager to assist with establishing the overall renovation costs/project.

Tip 5: The most popular rooms to renovate are the bathroom and kitchen, as they offer emotional appeal to the buyer or investor.

Tip 6: Improving the outside appearance such as the lawns, gardens and external painting of the property is often money well invested.  Make sure that the renovations are in keeping with the street appeal and don’t dramatically stand out.

Tip 7: Always take the property resale values into account when you renovate.

Renovating is often a personal choice on many levels.  If it is an ‘investment’ decision, don’t forget to take into consideration the needs and wants of potential tenants and buyers.