Saying goodbye to your property, after months, years and decades, is hard enough. Then there’s the added complication of translating your home’s sentimental value, all those memories accumulated over time, into financial value. To make the most of a decision to sell, many homeowners are turning to renovation to increase the value of their home, once the decision to sell is in sight.
In fact, if home renovation were an Olympic sport, Australia would be a multiple gold medalist. For the past two decades, Australia’s have been consumed with a passion for DIY, seeking to discover what the best renovations to increase value are. According to research by the Sydney Morning Herald, The rate of home renovations increased 147 percent from 2010 to 2014. During that time, there has been some stunning aesthetic and financial successes and some not so fortunate experiences. The question is, does renovation increase house value?
If you’re a homeowner looking to add value to your home prior to selling, we’ve found the best renovations to increase value most often focus on kitchens, bathrooms and outdoor spaces – however the most effective investments depend on many factors.
After all, we’ve only got so many dollars in the bank, so you’ll want to make sure your money goes the extra mile. We’ve gathered essential insights for Aussie homeowners wanting to add as much value to their home, in the most effective ways.
Best renovations to increase value to a house in Australia?
Quick insights for Aussie homeowners
Back To Basics
There's a reason that kitchens and bathrooms are seen as the best rooms for adding value to a home prior to sale. As key living spaces, they offer great opportunities for simple functional yet aesthetic updates that’ll add value to your home and recoup the cost of the renovation.
A kitchen renovation “can add enormous appeal and value to a property, with the increase in value sometimes being as much as $50,000 to $60,000” says Dan Mulcahy, Mulcahy’s Construction Group
However, several factors influence the return you are likely to receive from a renovation:
- Are your bathroom and kitchen spaces outdated or looking tired?
- What’s the ratio of bathrooms to bedrooms? A laundry to bathroom conversion and building a separate toilet/bathroom may add more value than freshening up an existing bathroom
- Is your garden looking shabby? Is it low maintenance or feature an engaging entertainment area?
Though there’s great opportunity in sprucing these key rooms, you’ve only got so many dollars to spend – stretching your budget too far isn’t ideal. The rule of thumb on budgets for kitchen and bathrooms are 4 to 6 percent of the property value for kitchens and 2 to 3 percent of property value for bathrooms.
The Great Outdoors
Outdoor entertainment spaces bring great value, along with a sprinkle of “wow” to any home. Regardless of whether your outdoor space is large and sprawling or a small courtyard, a survey by State Custodians found, “Landscaping can add up to 12.7 percent to the value of a home”.
Through a growing “green” movement, there’s a newfound emphasis of environmental sustainability. Increasing your home environmental friendliness and efficiency can add a lot of value during a sale. New research by News.com.au found, “Adding green features to your house can add more than $137,000 to your asking price at sale. And if you’re selling an environmentally-friendly apartment you could bump up your price by $43,000.”
Increasingly homeowners are concerned with their carbon footprint while valuing the smaller utility bills that come with a more efficient home. Solar panels, water storage and reuse systems, passive design that takes advantage of natural heating and cooling all contribute to a green renovation.
Think Twice Before Diving In
Many homeowners consider adding a backyard pool, however there’s mixed feedback on a pool’s return on investment. According to a recent survey by State Custodians, “only 11.3% of Australians look for a home with a pool, yet a swimming pool will cost you in excess of $30,000 to install” – when crunching the numbers, those figures don’t add up.
In many cases, homeowners will struggle to recoup the cost of a pool and many potential buyers are deterred by the maintenance effort needed for a pool.
Over to you
Ultimately, the best home improvements for increasing your property value all depend on your home’s unique circumstances. Whether you’re hoping to sell in three months or three years, focusing your efforts on the most effective improvements will save you time and money. In the long run, you’ll want to focus on efforts that will make your property attractive to prospective buyers.
Using a mix of statistics and industry know-how, we've built a quick tool for helping you hone in your renovation dollars to all the right places. Discover where to focus your home improvements, for adding tangible value!