Property

Which Renovators have the Top Design for their Block?

Ray Fayad - Tuesday, August 09, 2011

 Renovators Delight

You would be forgiven for thinking that a new renovation show has come to your street. Sydney is in a grip of a renovation boom.

The Australian Bureau of Statistics shows that private large value renovations increased by almost 40% for the 12 months to June 2011. In contrast new home approvals were flat for the year with only a 3% increase.  Total renovations added almost $3.1 billion.

The boom for builders comes at the expense for real estate agents as homeowners are choosing to stay put and do up their existing homes rather than move. Putting a home on the market and hoping to achieve the price you need to upgrade to your next home can be a stressful experience especially when auction clearance rates are averaging a mere 47% nationally. The transaction costs, agents’ commissions and stamp duty on a new house are tipping the scales towards renovating. People generally don’t like change and this allows them to stay within the familiarity of existing schools, shops and community surroundings.

Renovations Builds Value

Those who decide to refurbish need to assess whether the home is suitable for renovation. Not every home is a candidate. With a weatherboard home, it's better to extend at ground floor level not as suitable for a first-floor extension as brick homes.

Adding another storey or extending your existing layout or even knocking down a few walls to add an little extra space or updating a kitchen can all add additional value to your home, but more importantly added love and enjoyment of your old home.

Unlock your homes hidden equity

Facade: Added Value 5% - 10%

The facade is often the first thing buyers see - either in advertising or in a drive-by. That's why improvements to it are among the biggest value-adds for your house

Landscaping: Added Value 5% plus

From the street it sets up a good picture of the house ... At the rear, it is about enlarging the outdoor space: providing lawn for kids and trees for shading and privacy. The more privacy, the more buyers,

Deck or Terrace: Added Value up to 10%

Creating outdoor entertainment space adds big value, adding an outdoor living area that leads off the indoor entertaining area can make a big difference to value

Add a Bedroom: Added Value 15%

An extra bedroom is a significant way to increase value. If you are comparing two- and three-bedroom homes, the price jump is significant,

Convert an Attic: Added Value 8% (Storage) & 15% (Room)

Attic conversion is a definite bonus, especially in areas where land sizes are small and extensions are limited by space.

Update Kitchen: Added Value 7% - 10%

A kitchen can make or break a sale. If you open up by taking a wall down, to make the living space more open-plan, to make it look and feel bigger, you really add value

Add or update Bathroom: Added Value 10% plus             

In a terrace if you can put a bathroom on the same level as the bedrooms, or add an ensuite to a master bedroom they are worth its weight in gold and can improve the price significantly.

Add Home Office: Added Value 10%

A dedicated study is a smart idea, as more people are working from their home a few days a week. A good home office can add great value. Typically it has a separate entrance (not through the living space), internet connection and data cabling

Green your house: Added Value 3% plus

According to an Australian Bureau of Statistics study, greening your house adds far more value than initial outlay. The report estimated that on a 10-star rating basis, every star the house went up in energy efficiency it added 3 per cent in value. (See nathers.gov.au.) Especially with an introduction of a Carbon Tax the saving on future energy bills could add more value to your home.

Build a swimming pool: Add Value may decrease may increase.

While they are popular among families with young children, swimming pools can stop people buying a house."You are better off not to have it, you can cut your market in half on the selling side. Make sure the swimming pool has a second value, that it is an integral part of the design of the house, so you get an aesthetic as well as practical benefit. This is where the value add can be found.

Renovate for Profit: How not to over spend

• New kitchen: Spend between 4% and 6% of the property value.
• New bathroom: Spend between 2% and 3% of the property value.
• Landscaping: Spend 1% to 2% of the property value.
• If you're rebuilding a home from scratch, don't spend more on the structure than the value of the land.
• If you're doing a significant renovation of an existing house, don't spend more than half the value of the property – i.e. if you buy an old house on land for $500,000, don’t spend more than $250,000 on renovation

Tips for a Successful Renovation

• Always start a project with a firm budget, otherwise it can lead to an unfinished project or unexpected borrowing which cuts the investment potential dramatically.
• Always seek competitive tenders from builders or you may end up paying 50% to 100% more than they need to.
• Always  get a proper contract in place, one that deals effectively with changes that arise during construction as variations are inevitable
• Don’t treat your new house as a package into which they put all their favourite things: gold taps, expensive floor tiles or a particular bathroom basin they love. To add value as well as improve their lifestyle, you need to consider other people’s tastes as well as your own – and understand which features add value and which do not
• Get the external look right, with the extensions matching the existing structure and roof shape, and to achieve an internal layout that makes sense, with rooms of the right size
• Pools are a big trap. The market is split 50-50 on whether they're desirable or not. Many people dislike the cost and hassle of maintaining pools

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