Renovating – Will It Add Value To Your Home?

Renovating – Will It Add Value To Your Home?

Sean McCreanor

Sean McCreanor

Managing Director

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Renovations have long been touted as the best way to inject quick growth into the value of your home or investments, with this being a key tool for any investor flipping properties. Suggestions on how much of a return you can see on renovations range from earning $2 to every $1 spent to five times this figure.

Not all renovations will make you a tidy profit when you come to sell your property. Some projects will cost more than they will ever give you back. So what are the most lucrative projects to add value to your home and give you the best return come sales day?

Below, we explore these important steps in detail. Read on to find out more! Our experts are here to provide you with important insight into renovations, gained from 100+ years of real estate experience.

Kitchen

Updating or replacing the kitchen is one of the top renovations for profit recommended by Dan Mulcahy, founder and managing director of Mulcahy’s Construction Group (MCG) in Melbourne, which specialises in pre and post-auction renovations.

“Modular kitchens can be a cost effective and fast way to update the livability of a house or apartment,” says Mulcahy. “Although we suggest using a custom kitchen builder wherever possible as he will supply and install the cabinets as well as offer a warranty. Costs for a basic custom kitchen installed will all plumbing, electrical and tiling can be as little at $10,000. This can add enormous appeal and value to a property, with the increase in value sometimes being as much as $50,000 to $60,000.”

Builder Dean Harris who has been renovating homes for nearly 30 years in Sorrento, Victoria, agrees that well designed kitchens and bathrooms will bring a good return as “buyers don’t have to do any work, they can just move in”.

“The emotional connection between buyers and imagining living in the house they are buying is a big driver so when renovating it is vital to spend the money on the design of how the occupant will live in the area. Kitchens are now a lot larger areas with bigger fridges and ovens for entertaining and more casual dining.”

However, when setting aside a budget for renovating it has to be consistent for a good return. For example, when renovating a kitchen it doesn’t work fitting a $9000 Smeg stove and having DIY cupboards. There needs to be consistency across the renovation. Be realistic and look at the big picture.

7 lorikeet kitchen

Street Appeal

When renovating a home with resale in mind, improvements that add to the street appeal of a home are always beneficial, says Weller. “Maximising the number of potential buyers that are enticed through the door is the first step towards ensuring that the sale price meets your expectations. With this in mind, considering elements such as the garage or modernising cladding materials or colours are a good place to start.”

The front door is an important element in the street appeal, says Janson. “Replacing with a new modern door can add a lot of wow and costs approximately $500. Even painting the door with a rich oil-based paint will give it a big lift. Make sure the front garden is tidy, lawns mowed and beds weeded. If garden beds are bare, garden mulch is an easy way to spark them up. Repair and paint the front fence. Add a new house number and letterbox.”

street appeal

Present An Outdoor Living Area

“There is a definite trend towards upgrading outdoor areas to more indoor outdoor living,” says Harris. “An alfresco area in the past was a barbie on the patio where as now the outdoor area is an extra room, an all-weather extension of the house. The money spent on a well-designed all weather area brings its returns when the sale sign goes up. The outdoor area is an emotional driver for buyers. They see the area, imagine themselves using it and already they are sold on the lifestyle it offers.”

With any home renovation for profit Weller advises planning renovations with a broad audience in mind, rather than injecting too many personal tastes and preferences. “The last thing you want is for buyers to factor post-sale renovations into the equation.”

“The same goes for poorly done DIY renovations, particularly in the kitchen or bathroom, which can be off-putting for buyers,” he says. “Always consider using a professional so that potential buyers can picture themselves in the area for many years to come.”

outdoor living space

What Are My Legal Rights When Renovating?

By the time clients ask this question, neighborly relations have usually hit a sorry pass. The single best way to avoid expensive disputes is to check local Council rules before you build. Many people resolve disputes through through direct conversation or the mediation services of the Community Justice Centre. When all else fails, the law attempts to protect the rights of both the renovator and the neighbour in a balanced way.

In legal terms, disputes tend to fall into one or more of four categories: dividing fences and boundaries; noise and pollution; land use; and nuisance. Life is rarely so tidy, however. If your neighbours claim that your new floor-to ceiling dining room windows violate their right to privacy, the dispute may involve several different issues.

fence

Fences and Boundries

Generally, adjoining land owners share the cost of building and maintaining a fence. Pre-approval by the Council may be necessary and keep in mind that Council regulations may be quite specific as to height, materials to be used, and so on. It is best to resolve disputes about the position of the boundary between two blocks of land by having a survey done by a licensed surveyor and sharing it with the adjoining owner. If something has been built that encroaches over the boundary, the Land and Environment Court may make orders about the encroachment requiring:

  • The encroacher to pay compensation
  • Transfer or lease of the affected land
  • Grant of an easement
  • Or removal of the encroaching part of the building.

It is best to take action to resolve disputes before they happen. Get your survey done first before anyone complains to you.

noise pollution

Noises and Pollution

Noises, smells and dust are a predictable part of renovation. Renovators can avoid many disputes with good site management practices that include time restrictions on the use of power tools, (7am to 7pm is a good rule of thumb, with local and weekend variations). Other issues may arise with recycling, litter and sediment controls. Be particularly aware of the need for asbestos remediation in pre-1990 buildings and lead paint remediation in pre-1970 buildings.

checklist

Land Use

Before any renovation that changes the use of land, renovators must generally apply for consent from the Council. Adjoining owners often have the opportunity to inspect plans and make objections if it appears that the building or development will affect their property. If the building is too tall, too close to a boundary, out of character for the neighbourhood, or likely to block sunlight, the Council may disapprove. Working with the Council from the initial stages of planning is the best strategy.

Nuisance

This is a continuing activity or natural occurrence on a property that is unreasonable and preventable. An example might be excessive water runoff caused by re-grading. The objector, however, must show that the consequences are unreasonable. Renovators should monitor and attempt to remediate unintended consequences of this sort. Savvy renovators know that preventative measures are much less painful than a cure. If it becomes necessary to consult with legal counsel, make sure to work with one who is familiar with local rules

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