Not all renovations add value. Homeowners often assume that a new kitchen or bathroom will pay themselves back in spades. Sometimes, the less sexy jobs such as paint and carpet bring the best bang for buck.
The return on investment doesn’t necessarily matter if the owner is renovating to live in the home for a good period of time, says Ray White Remuera agent Nick Lyus, who has renovated many properties with his wife and interior design expert, Philly “Some were standard flips. We’ve done minor [renovations] and major ones,” he says.
Few renovators can afford to do every job they desire, given their timeframe and available funds, which means picking their battles.
If making a capital gain is foremost, then get advice and plan well. That advice probably starts with the real estate agent who sold the home. Ask what other buyers liked and didn’t like about the home.
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“When we sit down with our clients we think about what is going to be the biggest obstacle to [reselling once renovated],” says Lyus. “What’s the biggest barrier to somebody falling in love with this home? From an emotional perspective and from a practical perspective.”
As well as real estate agents, talk to a range of professionals such as mortgage brokers, architects, project managers, builders, and in the case of a big renovation, quantity surveyors.
Lyus recommends dividing available renovation funds in two.
“You need to win the head and the heart. Spend 50% on getting people to fall in love with the property. The other 50% might be dealing with practical issues such as unconsented works, which might make it hard, or near impossible to sell. You don’t want additional clauses in the contract. You need to make sure that the buyer’s bank [is] going to approve the [loan]. So you need to make sure that from a legal perspective everything is squared away.”
If the renovations are planned with resale in mind, then adding usable space and improving indoor-outdoor flow are probably number one, says Lyus.
“Just purely from a resale perspective, if you can add additional space to the home, like a sleepout, or create better indoor-outdoor flow for a property, you will really dramatically increase the appeal and resale value.”
Ray White agent and expert renovator Nick Lyus: “You need to win the head and the heart." Photo / Supplied
Adding space doesn’t always mean an extension or other big building project. Sometimes rooms can be reconfigured. Water cylinders can be moved outside and laundries can become second bathrooms, bedrooms or the all-important post-Covid home office. Dining rooms can become bedrooms, the kitchen can be moved to an open-plan living area, or walls can be moved where rooms are large enough to create three from two.
Don’t be afraid to add personality into the renovation, says Lyus.
He cites a renovation he did with Philly at Corinth Street in Remuera where instead of white subway tiles, the pair chose herringbone tiles, black tapware and sliding barn doors. “Don’t be afraid to inject some personality into it and really speak to your target audience. If it’s a family home, celebrate that.”
Landscaping can be a big win for return on investment, he adds.
“Landscaping gets lost and forgotten about by sellers and by developers. You can get the bedrooms and the heat pump and all that right. But if you have a great outdoor space you can sell the lifestyle.
“Make it green. Make it lush. Make it private and try to make it edible, as much as possible,” says Lyus. “The landscaping in the garden is an emotional thing. If you’re going to be selling in three years time, just get in early with your landscaping.”
Loan Market mortgage broker Lisa Meredith agrees on landscaping as an important renovation.
“Homes that have beautiful courtyards, decking areas, and outdoor kitchens, entertaining and living, sell well. It can add value. If a garden is landscaped well it adds to the overall appeal of the property. It doesn’t even need to be professionally landscaped,” she says.
An updated kitchen can often lift the value of a home significantly. Photo / Getty
Lodge Real Estate managing director Jeremy O’Rourke says one of the renovations he sees add resale value to homes is adding outside decks. An outside deck can expand the home’s usable space and increase its value by up to 30%, says O’Rourke.
“Price will depend on the size and material you use. As a guide, a 20m2 deck can range from $8000 to $25,000 in most cases,” says O’Rourke. “Adding shelter [such as louvre roofs] definitely adds value, as does the addition of outdoor heating and, increasingly, other outdoor accessories such as televisions and kitchens. We seem to really value outdoor living so extending the hours, seasons and usage has real appeal.”
O’Rourke says to keep in mind that decks over 1.5m high need building consent.
Serial property investor Mark Trafford, director of Maintain to Profit Renovations, says nothing beats paint and carpet for return on investment.
Trafford, who has been a property investor since he was 19, has bought, renovated and sold multiple homes over the years. He sees the outcomes in sale prices from clients’ renovations.
Best return on investment definitely comes from paint and floor coverings, he says. “Paint and carpet or flooring if you’re looking at the biggest bang for your buck. You don’t have to spend a lot of money, but it will make the biggest difference.”
If your budget allows, then do other renovations, says Trafford. But sometimes the simple upgrades are the best value. Case in point was a pair of houses built in the 1970s and 1980s that Trafford sold at the beginning of 2022. He sought advice from his staging company about paint and flooring colours.
“All I did was paint top to bottom, put new carpet down and added modern sleek light fittings. Both of those properties were sold in 10 days and both got good results. If you want to take the renovation further then look at your available funds to see what you could do.”
Trafford is not a fan of renovating kitchen and bathrooms to sell. “The trouble with renovating kitchens and bathrooms to sell is they may not appeal to buyers.”
Trafford says his company is often contracted to replace those kitchens installed by previous owners. That suggests the kitchen upgrade to sell may have been a waste of money.
Finally, buyers are increasingly interested in energy efficiency. Heating, ventilation and insulation, doesn’t need to cost a lot, but can make homes feel and smell better at an open home, which in turn helps sell the home.
