There are many reasons to consider renovating, from making your property more liveable to driving up its market value and increasing the rental income if it’s an investment.
So, which renovations should you consider when looking to generate a return on investment? Here’s some inspiration.
The Kitchen Update
The kitchen is often the focal point of a property, and it gets a lot of use, so it’s little wonder kitchen updates often drive up resale value. The national average return on investment for a major kitchen remodel (mid-range) is almost 49.5%, so if you spend $50,000, you could recoup just under $25,000.
Consider giving your kitchen a facelift by removing walls and making it open plan, adding islands or storage areas or upgrading benchtops, splashbacks, cabinetry and appliances.
Cost guide: Anywhere from $10,000 to $45,000+.
The Bathroom Remodel
After the kitchen, bathrooms are possibly the next most popular area of the home to renovate. Buyers and tenants love fresh, modern bathrooms, so it’s worth considering as part of your renovation plans.
You can start simple by replacing old grout and upgrading fixtures such as taps, sinks, showerheads and mirrors. Re-tiling or adding new baths and showers will obviously cost more but may pay off in the long run. If you’re looking to get fancy, consider adding heated towel bars and flooring.
Cost guide: Anywhere from $8,000 to $35,000.
The Curb Appeal Boost
First impressions count, and when it comes to prospective buyers or tenants, you want your property to make a good impact. Landscaping can help boost the property’s curb appeal and add value.
If it’s an investment property, low-maintenance plants are a smart choice. You may also consider adding lighting and updating the fencing to give your property that ‘wow’ factor.
Cost guide: It’s recommended to avoid spending more than 5% to 10% of the property’s value on landscaping. The national median property value is $779,819, so budget for between $38,990 and $77,981.
Landscaping estimates vary widely, so make sure to consider multiple quotes before contracting a landscaper.
The Granny Flat Build
If you have space for it, why not consider building a granny flat to increase your property’s value? Many homeowners are turning to granny flats to generate extra income.
According to CoreLogic, adding a granny flat could boost home values by 30% and add around 27% to rental income.
Be sure to get in touch with your local council to find out about planning permissions and anything else that’s required. It’s also a good idea to speak to your accountant about the tax implications.
Cost guide: The average cost to build a granny flat is $80,000 to $160,000.
The Expansion
If your house is suitable, you could consider expanding the footprint of your home.
When you decide to expand your home, you generally have two options: build outwards or upwards. Many homeowners hesitate to add a second storey, fearing that the costs will be significantly higher than those of a ground-floor extension.
To reach a decision, you’ll need to weigh up your budget, your circumstances, the block of land and your existing home to work out which option suits you. It’s estimated that building up will cost about 30% more than building out, but could add between 30 to 60% to the value of your home.
Cost guide: Roughly $1,850 to $3,000 per square metre depending on the “degree of difficulty”.
Like to explore your finance options?
If you’ve paid down your mortgage somewhat or your property’s value has increased, you may be able to access your equity to get your reno off the ground. Otherwise, we can run you through other finance options available to you.
