How to add value to your home
Before you start with major renovations, consider which home improvements will add the most value to your home. Here are some tips on how to add value to your home.
You may be considering some home improvements in the near future, but do you know which ones will increase the likelihood of a quick and profitable sale of your property? If you want to work your way up the property ladder to your dream home, you need to know how to maximise the value of where you live now.
Renovators Take Note: How to Add Value to Your Home
While some renovations may add immediate value, others could possibly diminish it.
1. Don’t over-capitalise
Over-capitalising means that what you have spent on your home, including the purchase price and the cost of alterations and improvements, exceeds the amount you could sell the house for in the foreseeable future.
Research is important when planning renovations. The most important thing you can do is find out the average selling price of homes in your area.
Suburbs usually have an average selling price where most homes within that specific area will sell within those price points. Building a five-bedroom mansion in an area that is populated largely by young, first-time buyers in two-bedroom houses is much riskier than renovating or adding on to a smaller home in a more upmarket area where most buyers have families and want the extra space. The key is to focus on what would make the property better if someone like you was looking to buy.
2. Improvements most likely to increase your property’s value
When a buyer is investing in a new home, factors like the economy, generational trends and basic modern requirements play an important role. These should inform the enhancements you decide to make, to add value to your property:
- Adding floor space to the main house: Extra bedrooms, extended rooms and open plan living are all popular improvements
- Building additional accommodation space: A cottage for income generation, or millennials staying home for longer, parents living with their adult children and extended families moving in
- Adding bathrooms: Consider adding more bathrooms, especially in older homes with multiple bedrooms and only one bathroom; adding an additional bathroom in this instance, instead of renovating the only existing bathroom will typically generate greater yield
- Kitchen: A more modern kitchen could add additional value to your home, but it’s important to ensure your kitchen renovation budget is in line with the price of the house. Spending R100 000 on a kitchen upgrade on a house valued at R1 000 000 will typically not yield a return on investment greater than the cost of materials and building
- Outdoor entertainment area: An outdoor deck/patio that extends the living area could add additional value
- Security: Increased security is a top-priority in South Africa.
3. Improvements not likely to increase your property’s value
While fancy fittings and features may help you sell quicker – especially in townhouse complexes where they can make your unit stand out from the rest – first consider if the price you’ll be able to sell your home for will cover the costs of these cosmetic improvements and yield a profit. The reality is that the following improvements are unlikely to add substantial value to your property:
- Building a swimming pool
- Installing air conditioning
- Replacing windows and doors
- Green energy, such as the installation of solar heating
- Fitting a borehole
4. Don’t lose money on improvements
- Ensure you hire reputable builders with a proven track record in the type of work that you need done
- Always demand high-quality workmanship and ensure any additions match the rest of the house
- Implement good budgeting and cost containment – no matter how small, the extras can add up quickly, even on the smallest of fixtures
- Create a checklist of what improvements you need and those you can afford, and include quotations from the best service providers available.
5. How to finance your renovations
Click here to learn more about how to finance your home renovations.