Beware over-capitalising when renovating

HOME renovation projects are tackled for a variety of reasons, and homeowners believe that no matter what upgrades they make to their homes, their property values will, one day, increase as a result.

But this can be a costly mistake as not all money spent on renovations will be repaid when the property is sold.

Some upgrades may even put off potential buyers.

So whether you are renovating your house to create more space, rejuvenate, or to put it on the market, get to grips with how renovations affect the sale price as this will help you make informed decisions, says Dr Simphiwe Madikizela, head of retail sales and special projects at FNB Housing Finance.

“Not all renovations you make will necessarily increase the value of the house. For example, adding an expensive swimming pool can often be a disadvantage due to the required maintenance.

“As a result, some potential buyers may not be willing to pay more for it and would have preferred to have the extra garden space instead.”

But there are some renovations that can potentially increase the value of a house in lower- to middle- income neighbourhoods, and these include upgrades to kitchens and bathroom, garages, storerooms and cottages.

Adding energy-saving features is also likely to make a home more marketable and appealing, Madikizela says.

Alterations to kitchens and bathrooms are always the most impactful as these areas are the most regularly used. Having a garage is also a good idea as not only does it increase security for vehicles but it can reduce car insurance premiums. Similarly, he says automatic gates and garage doors also increase security and convenience.

“Cottages and outside rooms are useful if you have a live-in domestic worker. The rooms can also be let to generate extra income for the family.

“Having storage space can give you an advantage when selling the house as every household needs space to store important contents that are not used regularly.” Furthermore, as the cost

electricity continues to of increase, Madikizela says many people are looking for efficient means of saving. This means energy-saving features like a solar geyser will add significant value.

“Also be careful not to over-invest in renovations that may result in your house being overpriced, compared to other properties in your neighbourhood,” he says.

“You may find it difficult to attract buyers, and eventually have to sell at a loss.”

Importantly, Madikizela warns against employing the services of unqualified renovators to try to cut costs.

“Poor workmanship will cost you more in the long run and may mean the job has to be done all over again.” – Property Writer

Garages, especially those with automatic doors, are good investments to make in a property.