The Impact of Home Renovation on Property Value: How Much Does it Really Increase?

When refurbishing a property, it's important to avoid overspending on projects that won't yield any returns, either in terms of your property's value or your wallet. Therefore, it's always wise to determine which renovations increase the value of your property and which ones don't. The amount that renovation adds to your property's value depends on various factors, including the property's location, interior appeal, and the condition of essential fixtures. Home buyers won't be happy to buy a property that requires repairs that should have already been made. Shift your mindset from that of a homeowner to that of a salesperson when planning renovations. Keep in mind who these renovations are intended for.

Here are the top five home renovations that can add value to your property:

1. Kitchen Upgrades

The kitchen is often considered the heart of a home, where families spend a lot of time together. A well-designed and modern kitchen with all the necessary amenities can make your property more appealing to potential buyers. Upgrading your kitchen can add value to your property and make it stand out in the market.

Does renovating your kitchen effectively increase the value of your property?

When considering a home renovation project, it is important to assess the cost versus benefit ratio in order to achieve the highest returns possible. The size of the kitchen is a key factor in determining the value added to your property. The scale of the renovation, cost of materials, and professional services hired can further impact the ultimate value added to your home. According to Sydney Renovations Hire, a standard kitchen upgrade may cost around $35,000 and add an average of $20,000 to your home's value, resulting in a return on investment (ROI) of 57%. A full kitchen remodel may be more expensive, with costs reaching up to $65,000, but can add up to $40,000 to your home's value, resulting in an ROI of 62%.

Below are 4 cost-effective kitchen renovations that can boost the value of your property:

1. By repairing and updating the existing hardware of your cabinets, you can save up to 80% of the cost of purchasing new cabinets.
2. Investing in a kitchen countertop that makes a statement and is affordable can be a smart choice.
3. Homeowners usually spend a lot of time on the kitchen sink and updating a new one is sure to be appreciated. The average cost to buy a countertop kitchen sink is $400. However, if you're on a budget, a $150 basic sink will work just fine.
4. Effective lighting in the kitchen can enhance its ambience and create a mood that complements its design. A variety of lighting options, such as ceiling lights and recessed lighting, can transform the look of your kitchen.

2. Add Value To The Garden

It’s a fact that having a garden can increase the value of a property by 5 to 17 per cent, depending on its location. However, these figures can be further increased with a few simple upgrades. How much a garden upgrade can increase property value depends on which key needs are addressed and which features are built for comfort and convenience.

Here are some garden improvements that have the potential to increase property value

1. A large, high-quality shed or garage can increase a property's value by around $20,000. Potential home buyers will appreciate having an extra storage space for items that don't fit inside the house
2. Terraces can increase a property's value by around 12.4%. A stunning terrace enhances the curb appeal of your home and provides a comfortable space to relax and unwind
3. Adding a fence not only provides privacy and security but also gives definition and purpose to your property, making it more appealing. This can increase the home's value by 10 to 20%.
4. Trimming the edges of your yard neatly and adding a few colourful plants can work wonders for your home.

3. Bathroom Upgrade

How can a bathroom increase the value of your property?

In contrast to kitchens, upgrading bathroom amenities and appearance can significantly increase a property's value. A 2021 study by Remodeling magazine showed that the less you spend on a bathroom renovation, the higher the profit. But how much can a bathroom renovation actually increase property value? According to Collings, bathroom renovations have a 75% return on investment. A mid-range bathroom renovation may cost between $15,000 and $30,000, depending on the materials used and the size of the bathroom. On the other hand, a high-end bathroom makeover can cost over $30,000 when using premium materials and hiring a professional.

4. Improved energy efficiency

Research indicates that properties with high energy efficiency ratings are more desirable and can command higher prices.

Here are the top 5 upgrades that can help achieve a high energy rating for your home:

1. Insulation: The value added by this renovation depends on which feature of the house is being insulated. A well-insulated roof can save up to 45% on heating and cooling costs. Wall insulation adds an additional 20% in savings
2. Shading: Shaded houses can block up to 90% of the sun's heat. Shade all north, east, and west-facing windows during the summer or install pergolas, blinds, or plantation shutters
3. Draft sealing: Your electricity bill can be reduced by up to 25% if you prevent air leaks. Install self-closing doors with air stops at the bottom of the frame.
4. Appliances: If you are selling a furnished home, highly-rated everyday appliances will prevent the wastage of air and energy which new owners will love

5. Roof replacement

New roofs are always highly valued by homebuyers. A roof renovation can increase the value of your home between 15% and 40%. However, the amount that a roof renovation adds to the value of a home depends largely on the type of material used.

4 Renovations that Increase Your Home's Value 

If a high price tag isn't within your budget, there are ways to increase your property's value and yield by doing the bare minimum. These minor renovations take a little time and effort, but can make a drastic difference to the appeal of your entire home. Feel free to get started; You'll love how much these little healings can add to a home's value!

1. Paint - A fresh coat of paint can instantly give your home a brand-new look. A fresh coat of paint can increase the value of your property by up to 5%. If you're not experienced in interior or exterior painting, it's best to hire a professional painting contractor to ensure proper techniques are used for longer-lasting results
2. Install new flooring - If your carpet or linoleum still looks dull after cleaning, consider replacing it with laminate flooring. It's less expensive and gives a polished look similar to hardwood
3. Spruce up your ceiling - Improving your ceiling is another affordable renovation that can add value to your home. 
4. Update fixtures and hardware - Outdated tapware, doorknobs, and lighting can leave a negative impression of the house. Search for affordable yet stylish replacements that will give your home a modern look.

4 Renovations That Don't Add Value To Your Home

Many home appliances that you think will appeal to a potential buyer or renter may actually hinder you from selling or renting your property successfully.

1. Swimming pools

Generally, having a swimming pool at home is not always an attractive thing for potential buyers. While a swimming pool can be an attractive feature for a young couple, adults may be reluctant to take on the responsibility of maintaining it. Swimming pools require regular care and maintenance, and you also have to pay operational costs and spend time and effort to maintain the pool. An article from Open Agent.com also found that adding to home value through swimming pools depends on the size of the land. Large swimming pools may only be suitable for large blocks. However, a swimming pool is not something that adds value to your home. The value of the home may increase slightly, but not so significantly that it's not worth the cost. Plus, families with kids can quickly back out due to the safety concerns and maintenance hassles required.

2. Extensive landscaping

When renovating your home, make sure you choose neutral options so that they can accommodate the needs of more clients. Some things won't add value to your home if they don't suit everybody or may be too expensive to maintain. Synthetic turf and excessive landscaping can reduce a home's value by 5%. Families with children who want to play in the park will not be willing to pay more for the feature. An unkempt garden can reduce a home's value by 1 to 2%.

3. Wall-to-wall carpeting

Even though this gives an attractive appearance in the room, one may pay more attention to the chemicals used in its manufacture and the presence of allergens that may be trapped in it.

4. An expanded en-suite

Upgrading the master suite with a luxurious bathroom and walk-in closet may be an attractive feature, but if it reduces the number of bedrooms in your  four-bedroom home to three its value will be on par with other three-bedroom homes in the neighbourhood. Regardless of how lavish the owner's suite may be, the greater the number of bedrooms and living spaces a home has, the higher its value.

Conclusion

Overall, the value of your home can be significantly increased with the right renovations. While investing more in necessary upgrades will yield a good return, you can also make a significant difference on a tight budget. So, take a seat, plan your improvements and appreciate the extent to which renovations add value to your home! At Realty One Real Estate, we utilise a diverse range of marketing strategies to ensure that your home is visible to potential buyers. This includes listing your home on our website and promoting it through social media channels. Realty One Real Estate can assist you in maximizing your home's potential for a quick sale and getting the best price for your home. Our agents also have extensive knowledge of the local market and can help you price your home correctly to attract potential buyers and get the best possible price for your home. Contact Realty One Real Estate today to learn more about how we can help you sell your home quickly and for the best price. Contact us today to speak with Rossana Winters, one of our experienced real estate agents and get started on your journey to homeownership.

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