How To Increase Property Value Through Renovations

How To Increase Property Value Through Renovations

Read time: 3 minutes, 57 seconds.

Increasing property value offers a lot of benefits. Whether you flip properties or you’re hoping to use your home’s equity to buy another, renovations make all the difference when it comes to ROI. 

A Westpac study found that 89% of Australians believe that renovation is a good strategy to increase the value of their property.

How Much You Should Be Spending on Renovations

Property experts recommend spending no more than 5% of your home’s value on renovations. If your home’s value is $500,000, the bathroom renovation cost should be $25,000 or less, ideally. 

Choosing the Right Renovation Projects

Not all renovation projects provide a high return on investment. How you go about increasing property value through renovations should be based on what your intentions are. 

If you plan to stay in the property for a long time, a full-scale kitchen remodel may be justified. However, if you’re planning to sell in the short term, it’s best to keep renovation costs to a minimum. 

Here are some effective ways to increase your property value through renovations: 

Garage Conversion

When executed correctly, garage conversions have the potential to increase your property’s value by up to 10-15%

Conversions of existing spaces to make them habitable dwellings could prove a better investment than the construction of new rooms altogether. 

For the growing family, it can provide a much-needed additional bedroom or an entertainment area. 

Rental Income

Converting your garage to a self-contained rental unit will enable you to earn rental income. This move can offset loan repayments and help you pay off your mortgage faster. 

“More often than not, we see a large array of clients looking for properties with granny flats for a range of options. The normal family often seeks this addition should they wish to move into a property with their parents, splitting the costs of living while also keeping the family unit tight. We also note that a range of astute property buyers is looking for this addition to ease their mortgage by leasing out this external flat.”   -Rebecca Mikellides, Ray White Willoughby Agent

Bear in mind that garages were not made to be habitable. A garage conversion involves the reclassification of the structure. So you’re changing it from non-habitable to habitable. 

Before proceeding with any work, will need to seek the approval of the Building Code of Australia (BCA).

The Value of Adding Square Footage

When executed correctly, garage conversions have the potential to increase your property’s value by up to 10-15%

Conversions of existing spaces to make them habitable dwellings could prove a better investment than the construction of new rooms altogether. 

For the growing family, it can provide a much-needed additional bedroom or an entertainment area. 

Repair or Replace a damaged roof

A new roof has the potential to boost your property’s value by up to 40%. While a damaged roof can deter potential buyers. Let’s say the added value of the roof replacement is higher than the cost of the roof replacement. It makes sense to proceed in this case. 

It’s much easier to justify a higher listing price when selling your property if the roof has recently been replaced. Potential buyers are happy to know that the roof is not an expense they will have to consider immediately.  

Install new flooring

Research suggests that hardwood flooring can increase a property’s resale value by nearly 3%. They can last for over ten years with regular maintenance. Plus, they are considered a great long-term investment strategy for high-end property owners. 

Properties on the smaller side, like apartments, can benefit most from cost-effective solutions like engineered flooring.  

Unlike hardwood prices that can run as high as $120 per square metre, engineered flooring can help you achieve the hardwood look without the expensive price tag. Both hardwood and engineered flooring provide years of durability. When you are ready to sell your property and move on, refinish your flooring to give them new life. It will be much more affordable than having to completely replace it.

There are a plethora of things that you can do to increase your property value. When it comes to renovations, value will vary by location, property value, etc. Increasing resale value can be done simply and methodically. So, instead of an expensive overhaul, consider which changes will provide the most value. If you’re aware of what potential buyers are looking for, you’ll know which renovations will make the most sense financially.

If you need assistance navigating through the renovating process MLS Finance are on standby to help.  

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📩 Email: enquiries@mlsfinance.com.au

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