Home renovations that may give you the best return on investment

If you can’t afford to renovate your entire home, you may want to think carefully about where you want to commit your time and money. Whether you’re renovating to sell, or looking to grow your home’s long-term value, renovating certain areas of the home could provide a much bigger return on investment.

Before you start, are there structural problems? 

If a property has major underlying issues, such as problems with mould, damp or rot, you may want to prioritise fixing these over giving the place a cosmetic makeover.

Repairs and maintenance may not be the most pretty or exciting renovations, but they can help to keep the property from losing value. If nothing else, this will give the next buyer a solid foundation upon which to realise their own vision for the property.

Kitchens and bathrooms 

There’s an old saying in real estate circles that kitchens and bathrooms sell houses. Obviously, there are also other factors in play, but renovating these rooms could make a noticeable impact upon potential buyers and even some professional valuers.

Updating a kitchen or bathroom can be expensive, though it doesn’t have to be. Rather than completely removing and replacing the existing tiles, cabinetry, fixtures and appliances, you may be able to focus on some smaller upgrades that can still make a big impression. For example, if your cabinets are looking a bit dated but are still in good repair, you could simply replace the handles and knobs to update their look and feel.

Depending on the design of the property, you could consider knocking down any walls that enclose your kitchen in favour of the open plan look. New appliances can also make a big difference to a kitchen. You don’t need to go straight to the expensive luxury names, but brands with a reputation for quality and reliability can be just as impressive to buyers, as both tenants and owner occupiers could benefit from their performance.

Many people consider their bathroom as a kind of personal “retreat” from the world, so little changes you can make to encourage this could make a big difference. Replacing chipped tiles, replacing outdated vanities, and changing the taps and showerhead can all contribute to creating a new look and feel, without needing to make big changes to plumbing and the like.

The great outdoors 

It’s important to make a good first impression, and that includes potential buyers who first arrive at your property, before they’ve taken a step over the threshold. To encourage this, you could look at replacing the front door, cleaning up the entry path, and generally creating an impressive entryway.

Freshening up the exterior paint, landscaping the front garden, and replacing rusting gutters can all also contribute to making your property look as good on the outside as it does on the inside.

Low maintenance gardens can appeal to both owners and tenants, as they can provide a beautiful space without requiring too much gardening knowledge or experience. Setting up an outdoor entertainment space can also appeal.

A bigger commitment could be to build a granny flat in your backyard. While this could be a significant renovation project that requires a bit of time and money, it could also help to enhance your property value and even potentially introduce a new income stream.

Increasing natural light 

Lighting in a household can make a big difference to how inhabitants and visitors perceive the property.

Depending on the layout and structure, adding or expanding windows or skylights could introduce more natural light, though you may want to also include quality blinds or curtains to help control light levels if required.

Strategically placed mirrors can also help to make a space feel bigger and brighter than it really is.

A splash of paint 

A fresh coat of paint can greatly freshen up an otherwise tired looking space, potentially increasing its appeal to buyers. It’s also relatively easy to do it yourself if you have the time and ability, which could save you some money.

It’s up to you though whether you want to stick to plain neutral colours, or to add a feature wall – while you may appreciate the extra colour, other buyers may not.

Adding storage space 

Whether it’s adding some built-in wardrobes, adding or updating an attic space, or turning some spare space into a walk-in storeroom, giving new tenants and owner-occupiers more places to stash their stuff could really help to increase the appeal of your property.

Adding or improving a garage could also make a big difference to the right buyer, though it’s important to make sure it can still be used to park a car and isn’t solely useful for storage.

Financing a renovation 

Unless you’re already sitting on some significant savings, you may need some level of finance to afford a renovation.

There are a few different options you could choose from, such as:

• Withdrawing money from your mortgage offset account
• Redrawing extra repayments from your home loan
• Refinancing your mortgage to get a top up
• Accessing your home’s equity to take out a line of credit
• Appling for a construction loan (though these are often more for large-scale projects, such as building a home from scratch)
• Taking out a home improvement personal loan

Remember that it’s possible to “overcapitalise” a renovation project by spending more than the amount it would increase your property’s value by. If you’re renovating to sell, overcapitalising could mean effectively losing money. Doing some research into property values in your area could help you get a better sense of perspective when planning your renovation project and setting your budget.

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