To make a profit on a renovation, it helps to follow a proven formula, Susan Edmunds finds.
In the booming Auckland property market, most money put into renovations will add to a house’s value. But spend well and you could get up to $4 back for every $1 spent.
Troy Patchett recently completed a Mangere East renovation for which a spend of $45,000 boosted the home’s value by $160,000. A new paint job was key. “It’s always the biggest bang for your buck.”
Interior walls should be a neutral, warm and inviting colour. If the exterior colour just needs a lift, paint the window frames, guttering and fascia a fresh white. For the best result, take care in the preparation. Walls should be washed, sanded and skimmed well.
• Cost: Paint for a medium-size room, about $100.
• Return: $2-$3 for every $1 spent.
How your house looks from the road makes a big difference to your price.
David Whitburn, of Fuzo Property, advises considering your type of fence, the condition of your front door and even your roof. Waterblast paths and driveways and keep garden edging crisp. Mitre 10 spokesman David Elliott said: “People should consider things like their letterbox and the numbers on it. You can make it really impressive.”
• Cost: About $100 for a new letterbox and numbers.
• Return: $3 for every $1 spent
If you’re going to splash out on one area, make it the kitchen. Small touches make a big difference, so replace a benchtop, add soft-close hinges, replace handles and taps and add storage or a bright splashback.
Renovation expert Jane Eyles-Bennett said: “I’ve been getting lots of people to do a flatpack-type kitchen. That’s a really inexpensive way to replace the kitchen. If you’re going a bit basic on cabinetry you can spend extra on accessories.”
• Cost: From $3000 for cosmetic improvements.
• Return: $1.50-$2 for every $1 spent.
Eyles-Bennett says a lot of people underestimate the impact of good lighting. “Even if you just put new lightbulbs in each room so all the colours are consistent, it makes a difference.”
Whitburn recommends LED lightbulbs – they are long-lasting and cheaper to run than standard lightbulbs. “Many older houses are dimly lit. Good lighting is important to showcase a property.”
Sharon Trafford, who runs Renovate to Profit, says lighting should match the style of the house. Although downlights are stylish, they are more expensive than regular light fittings. Lights around patio areas and decks can boost the amount of use you get out of those areas.
• Cost: From $10 for LED bulbs.
• Return: Dollar neutral.
If the house has carpet, take a look at what is underneath it. If the floor is in a good condition, it can be worthwhile ripping up the old carpet and polish and stain the exposed floorboards.
If the floor is concrete or particle board, consider laminate, which looks like timber but is easy to clean.
• Cost: Laminate flooring from $70-$100 a square metre for supply and installation.
• Return: $2 for every $1 spent.
With many councils banning open fires, Whitburn recommends a heat pump. “They are low-cost to run. I think they’re a great investment and good for the environment, too.”
• Cost: From $2500 for heat pump.
• Return: $2 for every $1 spent.
Add a deck
Whitburn sees a lot of properties with small, sloping lawns that don’t get much use. Building a deck adds a flat outdoor area for kids to play on and for entertaining.
“I’ve had so much success with wraparound decks because it instantly adds liveable area.”
Decks more than a metre off the ground require a building consent.
• Cost: $300-$500 a square metre.
• Return: Up to $4 for every $1 spent.
Are the door handles dated, do doors shut properly, do the light switches work, does anything squeak that shouldn’t? Give the house a deep clean and declutter. NZ Property Investor publisher Philip Macalister says these things are often forgotten but can have a big impact on a buyer or valuer assessing your property.
• Cost: Can be free.
• Return: Unlimited.
Don’t splash out on
• Pool: Unless you are doing a very high-end renovation, pools don’t add much value as they are often seen by prospective homeowners as a lot of work.
• Specialist room: Your dream might be a wine cellar or music room, but anything that limits the usefulness of any part of your house will not pay off.
• Carpet: If you have wooden floors, repolishing is a great way to make them look good and it’s less expensive.
• Extensive landscaping: A carparking space might be better.
• Solar power systems: They’re nice to have but don’t add value and can be pricey to install.