Are you planning to sell your property? Do renovations before listing it and get a raised price for your property. It is a fact that renovations make properties more appealing and high in demand in the real estate sector, given that. When it comes to selling, everyone wants good returns on their investments. However, one thing that guarantees high profits is renovations. So, let’s explore which home upgrades can potentially boost property value.
Kitchen Renovation
When it comes to the most used area of the house, everyone can vouch for the kitchen, and its renovation has a potential impact on resale value. Homeowners can add islands, remove walls to make an open kitchen, or add storage to make it more functional and appealing. Also, sellers can consider renovating sinks, cabinetry, benchtops, appliances, or splashbacks to improve values. It is a fact that with a kitchen makeover, homeowners can recover as much as 52% of their investment.
Bathroom Renovation
It is no secret that buyers love renovated bathrooms. Homeowners can consider pocket-friendly updates like plumbing fixtures, double vanities, and new surfaces. New showers and baths with revived flooring come under high-impact renovations. Also, many reasonable options are available like storage, or new lights that can give bathrooms a luxurious look, and make the property more appealing in the real estate market.
Solar Panels
We live in a high-tech world, and sustainable power alternatives like solar panels are most desirable in the property market. Solar PV systems raise property value by up to 4%, for instance, if a home without solar panels is valued at $400,000, after solar panel installation, its value could be increased by $8,000 to $13,000. Besides property improved value, homes with solar systems sell 20% faster than their counterparts. So, solar panels are the most rewarding and smart real estate renovation that boosts property value and makes it more appealing to buyers.
Improve Curb Appeal
We all get attracted to clean and modern houses, which is why it is important to improve the curb appeal of selling property. Property owners can do this in a budget-friendly way by cleaning, aesthetic lights, and lawn maintenance. Also, fence renovation like replacing or mending the damaged parts or repainting, and cleaning pathways can offer owners excellent returns on their investments.
New Paint
New paint is one of the most demanding and profitable property renovations. New paint is the perfect way to revamp an old look into a more modern and chic design. And the best thing is that it gives excellent returns on small investments.
Upgrade Floors
Replacing old carpeting with tiles, hardwood, or laminate flooring is the best way to raise the resale value of any property. Also, many property buyers prefer modern floorings over conventional carpeting. Hardwood is one of the most demanding floorings, gives a luxurious feel, and is the finest option for expensive properties. However, for the normal to average range of properties, laminate flooring is best as it is economical, durable, low-maintenance, and provides good investment returns.
Avoid Over-Capitalising
Overcapitalization is the term used in property reselling which means that owners spend far more on property renovation than the value it adds to the property. Here, the question arises what is the optimal cost that should be spent on renovations to avoid over-capitalizing? The simple answer is – do the maths before hopping into a major renovation such as a bathroom or kitchen revamp. , do the maths. Also, your property’s current market value is a key reference point that will assist sellers in finalizing the sensible spending amount.
● Structural changes
An entire structural revamp might cost property owners up to 40% of the current value of their home. For example, if a house value is $1 million, sellers might spend up to 380K for the roof, floor, walls, windows, and doors renovation. So, if it is inevitable go for structural changes otherwise stick to cosmetic upgrades.
● Cosmetic changes
Cosmetic renovations cost less than structural updates. Sellers might spend approx. 1% to 5% of their current property value. It includes changing fittings and fixtures, repainting, or addition of new cabinetry.
Projects that Cause Negative Effects on Property Resale Value
In the real estate industry, it is a rule of thumb that customized renovations as per sellers’ needs, personalities, and tastes, hurt the resale value. So, avoid the following renovation projects:
- Swimming Pools
- Luxury Upgrades
- Garage Conversions
Take Away
Real estate is one of the most profitable sectors for potential investors and sellers. However, structural and cosmetic renovations have a great impact on the resale value of the property. Such upgrades can boost or reduce return on investments. So, at this stage, it is necessary to understand smart home renovations that improve liveability and resale value.