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One of the greatest dangers when renovating is over-capitalisation (when your total expenditure, including the purchase price of the property plus any alterations costs, exceeds the amount you could sell it for).
So, what improvements increase the value of a home, and which ones don’t? We spoke to the experts to find out more.
Start with the basics
In general, kitchens, bathrooms, entertainment areas, and sustainability (water harvesting and alternative power) are important to today’s buyers, but it is easy to overspend on these.
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A good and cost-effective renovation can start with something as simple as sprucing up your curb appeal. ‘It’s important to make sure that the buyer’s first impression of your property is positive. Just changing your garage door can make a huge difference,’ says Maritza van Rooyen of Just Property Durbanville.
Simple modifications inside can include a fresh coat of paint in a neutral shade, swopping out carpets for laminate floorings, and adding shelving and storage solutions like fitted wardrobes to give extra space.
If you are going to upgrade big-ticket rooms like a kitchen or bathroom then do so with caution. The kitchen has always been viewed as the heart of the home, and as Graeme Steen, chief executive officer at Kandua.com explains, you can expect to recoup between 60 and 120% of your investment in a kitchen remodel, provided you don’t go overboard.
‘The average building cost is 8,000 per sqm and a medium-range kitchen renovation can cost anything between R65 000 to R90 000,’ says Steen. ‘Remember too, that there are always unknown costs in the construction process. Good planning, design, and management can minimise these, but you should still allow about five and eight percent of your total budget for these extras,’ he advises.
Although expensive, a beneficial outdoor renovation is the addition of a swimming pool says Johannes van den Berg of Just Property N1 City Branch (Burgundy Estate Office). ‘The home with a sparkling pool will almost always fetch the higher price, usually more than covering the cost of installation,’ he says.
Know the renovation rules
In general, you don’t want to spend more than one-quarter of what your property is worth on improvements, and you should never make your kitchen fancier than the rest of the house, or the neighbourhood.
‘Before you do renovations, especially if it is for the purpose of getting a quick sale, get a qualified property practitioner that specialises in your area to do a valuation and give input on which improvements will achieve a better selling price,’ says van Rooyen. They will look at your property objectively and with an understanding of how it compares with other properties in the local area.
Also, make sure that whatever work you have done is completed correctly. A new gas stove can immediately lift a boring old kitchen for example, but the installation should be compliant and come with a certificate.
Remember not all renovations are equal
‘The pandemic has considerably changed people’s lifestyle needs and priorities, so it is critical to take this into consideration to best capitalise on your renovation,’ says Claude McKirby, co-principal for Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs
‘Whilst there are numerous pre-pandemic features that remain at the top of prospective buyer’s wish lists, including open plan living areas, lots of natural light, and energy-saving features, there are now also several trends that have emerged as a direct result of the pandemic, such as having a home office for example,’ he explains.
If you are thinking of adding a new office, make sure it is properly planned. Converting a garage or outbuilding into an office can mean you lose a garage as well as security and privacy. Similarly, adding on to the existing houses without properly considering a practical floor plan can result in poor flow. In either case, properties like these become difficult to sell.
Taking other demands of the buyer into account is also wise. ‘With the ever-increasing price of electricity and ongoing load-shedding saga, South African homeowners are likely to pay premium prices for homes with alternative energy options, so installing a solar and battery system will certainly add value to your home,’ says Tim Ohlsen, chief executive officer of Hohm Energy.
Other things to consider are the addition of a gutter-fed water tank, an inverter system, solar panels, and climate-control devices.
