When it comes to renovating, there are two main reasons people renovate – to improve the home they live in, and to add value prior to selling. This article takes a look at the second scenario. After all, if it’s your own home and you’re planning to live there for a long time, it’s worth spending money to make your home exactly the way you want. But when you’re selling? You need to be strategic in how you spend your cash.
So before you even begin to think about the specifics of renovating, do your research. First up – who’s your target market? To put it another way, who is most likely to buy your house? What a young family in the suburbs wants is very different to cashed-up couples living close to the city.
Further, check out renovated properties that have sold recently in the area, see which ones performed the best, and analyse why. Chat to a few local real estate agents and find out what they believe gets the best results. The answer will be connected to the target market. Young families in a lower socio-economic area are likely to want something that looks smart, is durable, has some back yard space for the kids and good security. In a heritage area, attention to period detail will be important. Cashed-up couples close to the city want style, convenience, top-of-the-range fixtures and quality finishes.
Finally, and in some ways the most important – budget. The absolute biggest mistake renovators across the board make is spending too much money on their renovation. Many experts suggest a maximum of 10% of the property’s value, and that’s generally a good rule of thumb. Partially because it at least gives you an idea where to start, but it also helps you recognise that in cheaper areas, expensive is not the way to go because you’ll never get that money back. You might have to get creative to achieve the look you want for the dollars you have available to spend though!
Moving on, what are specific areas to think twice about spending your renovation budget on?
1. Custom features and luxury fittings
It’s nice that you’ve fallen in love with that $3,000 pendant light fitting – but if you’re renovating to sell, walk away. For starters, you can probably find something of a similar style in a budget lighting store for much less. The other issue, though, is there’s no guarantee that a custom feature, designed to stand out, is going to be to the taste of your potential buyers. It’s quite possible they won’t even like it! So don’t spend money on custom, eclectic features. Sure, choose something a little nicer than a $10 cheapie from Bunnings, just keep it simple so it appeals to as many people as possible.
2. Coloured feature walls, bright tiles and loud flooring
Personally, I find a lot of modern homes almost crypt like in their dedication to greys and neutrals. I like a bit of colour! But the bottom line is that it’s preferable to add colour with your furnishings and accessories, rather than in the bones of the house. You will spend ages picking the perfect colourful tile and spending a lot of money on it, only to find the buyer hates it because it’s too loud, and rips it out. So much as my colour-loving soul hates to say it, if you’re renovating to sell, keep it neutral and simple.
3. Bad DIY work
This is definitely a personal bugbear of mine. I’ve lost count of the number of houses I’ve gone to during an open for inspection, and cringed at the atrocious paint work – and worse. Too many people think that watching The Block makes them an instant expert, and it’s just not true. Unless you have a lot of experience – get in the expert. If that means your renovation is a little less extensive than you’d like, then be clever with what you do spend. Shonky work is never going to help your house sell for top dollar. Get it done right.
4. Heating / cooling
This one’s a bit tricky, as it does come down to the area your house is in. Who wants to go through a Melbourne winter without heating, for example? But if this is something your house might be lacking, then at least think through your options. Do you really need to install underfloor heating? Or ducted air conditioning throughout the whole house? A good, adequately sized split system in the main area is likely to be enough to keep potential buyers happy, without chewing through anywhere near as much of your budget.
5. Insulation
Although this ties into #4, this is even worse because it’s invisible. No buyer walking through your house can see inside the roof and walls and know what type of insulation is there. This is an item that’s better left to renovating for your own home, not one you want to sell.
6. Replacing the Roof
There are times when you really don’t have a choice – the roof is in such poor condition that it has to be replaced. But if it’s just looking a bit tired or a bad colour, there are other options. A good pressure wash can have amazing results, and it’s worth paying a professional to do it. If necessary, go a bit further and get the roof repainted, or have a tradie come in and do some minor repairs. A lot can be done at a fraction of the cost of replacing the whole roof.
7. Reconcreting the driveway
This is another situation where sometimes it just has to be done. But again, a good pressure wash can rejuvenate a driveway. Or consider getting it painted, perhaps with a stencilled finish to give the illusion of paving. Both of these are much cheaper options than ripping up the driveway and starting again.
8. Rewiring
The renovator’s nightmare! This one will chew through thousands, and not a single buyer is going to see it’s been done! If you have to, then of course from a safety perspective you have no choice. But don’t put it on your renovation list just because you can.
9. Adding a Pool
This falls into the category of – it depends. A family home in a part of Australia where the climate is mild and a pool is likely to get a lot of use might just make adding a pool worthwhile. But using up space in the backyard of a home aimed at couples wanting a minimalist approach to outdoor work – definitely not!
10. And the list goes one…
This last category covers a bunch of things that generally aren’t worth spending money on. The only exception is if your property is located in an area which demands this type of work/room in order to achieve top dollar. For most renovation projects, however, give these a miss unless you have a bit of extra cash in your budget and they suit your market: extensive landscaping, library room, wine cellar, tennis court, alarm system, cinema room… I’m sure you get the idea. It’s not that these types of things don’t add value, it’s more that buyers aren’t likely to be willing to spend a lot more to have them, except in quite niche markets. So you’re spending money that won’t come back to you via a higher sale price.