Is Renovating Worth The Hassle?
28 February 2017
The long summer season means many people have time off. For some it is a time to carry out plans for the future year. Many end up making changes to their employment for living arrangements, including home renovations.
It is always worth thinking carefully before renovating. Many home owners who extend or renovate their homes make money when they sell, while others wonder why they have trouble getting their money back. Many simply increase the cost of their home without necessarily adding to its value, because some alterations don’t improve the standard of the property enough to compensate for their cost. Others leave a mish mash of disparate styles or serve only to emphasise the datedness of the original house or are too personal in their application to have wide appeal.
It is not uncommon for home owners to sacrifice one feature to gain another, thereby adding cost but not value. Frequently reported examples of this sort of expenditure include turning a bedroom into a dining room or a garage into a rumpus room.
Ideally, extensions should be seamlessly integrated with the original home. Many 3 bedroom homes don’t ‘work’ once a fourth bedroom and family room are added—the original rooms may be too small to balance the extensions. Furthermore, bad design resulting in poor natural light, an inconvenient floor plan such as a living area that ends up a long way from the kitchen or a badly positioned bathroom will be reflected in the sale price of the property. Many of these problems could be avoided if architects were consulted before the work was undertaken. ’Saving’ on the cost of an architect is nearly always false economy.
Sometimes renovators over-capitalise by deviating from their budget during the course of their renovations. Many homes and locations don’t justify the top of the range appliances and fittings some renovators choose. And if renovators run out of money before completing the work or have to skimp on the finishing touches, the overall effect can be disappointing and limit the ultimate selling price.
Home owners concerned about investment potential should also think twice before making changes for their own unique needs. Above all, major work should not be carried out if homeowners plan to sell in the near future. Sometimes a homeowner will ask a questions such as: “ I am planning to sell in a year but the house could do with a new bathroom. Should I undertake the work?” it could be argued that the home owner will get the benefit of using the new bathroom for the year until the property is sold, but unless they are in a location or marketplace or price range where the cost of the bathroom will be easily absorbed in the overall capital increase during the next year, it would be pointless to renovate the bathroom only to sell it. Prospective buyers may want to put the bathroom somewhere else.
At the same time, quality of life is also important and the good news is that if people stay in a property long term the cost of idiosyncratic changes will usually be absorbed in most locations experiencing growth.
Home owners wanting to maximise the investments potential of their homes should consider consulting an estate agent with whom they have a good relationship before making improvements. In many instances agents aren't called until the work is nearly completed and it’s too late to put the genie back in the box. Builders can tell you what your renovations will cost but only an experienced well referenced estate agent can tell you whether the expenditure is justified.