Renovating To Increase The Value Of Your Property

Making improvements to your home is an excellent way of increasing its resale value. Even small upgrades can translate into a solid return on investment. With property prices continuing to rise and bonds in South Africa increasingly available and affordable, renovations are a very good alternative to making second property investments, and can pay off just as handsomely.

One doesn't need to add on to the property, as internal home improvements can add significant value. According to research cited by Mortgage SA, the leading mortgage provider in the country, kitchen and bathroom renovations can achieve a return on investment of up to 80%. In other words, if the renovations cost R20 000, the value of the house will increase by R36 000. This is a higher return on investment than anything else out there, bar a fluke stock exchange windfall. These renovations don't even need to be particularly extensive either. A bathroom overhaul might include simple things like replacing countertops, re-tiling, re-enamelling, re-grouting, and replacing taps, light-fittings and mirrors. This requires no structural work or plumbing.

Another, more extensive way to achieve this sort of high return on investment is to add on another room, but care should be taken not to compromise other sources of value in your house. One of the attractions of your property may be a large garden, and building on an additional room might compromise this, so that you end up losing as much as you gain. You should also be careful when adding rooms that this does not create a cramped feeling inside the house.

You also don't want to over-capitalise your property. If you improve the value of your house way over the average for your area, you may not be able to sell it that easily, as buyers are very sensitive to location. If the average house in your area is worth R500 000 and you upgrade yours to a value of R1 million, a prospective buyer will end up preferring to buy a house for the same value in an area where this is the average value, leaving you with the proverbial white elephant.

Renovating To Increase The Value Of Your Property

3/7/2008 4:04:56 PM