Experienced contractors recommend capping your renovation budget to 10 percent of the value of the property. This is good advice. You don’t want to do a $30,000 kitchen renovation in a house valued at $300,000 because you won’t have money to spend on the other necessary renovations.
What is the Cost of a Kitchen Renovation? covers the three basic types of kitchen:
In some cheaper properties, even a $10,000 kitchen renovation may be too much to spend. You can save money by purchasing a flat pack kitchen and doing the installation yourself or you may be able to salvage some of the kitchen and give it a makeover. Read How to Do a Kitchen Renovation on a Budget for some more tips.
The same applies to your bathroom. While you do want the bathroom to look modern and clean, you don’t want to overspend. How to Do a Bathroom Renovation on a Budget offers a number of tips to lower your bathroom renovation budget.
Even if you’ve purchased an expensive property, adding a swimming pool may not give you a good return on your investment. Can a Swimming Pool Add or Subtract from the Value of Your Home? goes into more detail about swimming pools. If you have an investment property, keep in mind that not every family wants a swimming pool or is willing to pay more for it. Adding a swimming pool could exceed your renovation budget and keep you from doing more important renovations.
Keep this advise advice in mind. Do the renovations that add the “biggest bang for the buck” and stick to 10 percent of the value of the home. You’ll get a higher rental yield without going over-budget.
The same applies to your bathroom. While you do want the bathroom to look modern and clean, you don’t want to overspend.
Property updates for maximum return
An Extra Bedroom
If you’re renovating an apartment with a view to maximizing your rental return, two-bedroom apartments are more in demand than one-bedroom apartments and fetch a higher rent. The second bedroom doesn’t have to be large. Many people will want to use it as a home office. Adding a third bedroom to a two-bedroom apartment will limit your market and may not add to the rental value.
Adding a third bedroom to a two-bedroom house can add up to $100,000 in value to the home. However, a home extension may cost as much or nearly as much as the added value. Look for ways to add a third bedroom to your existing house. A builder may be able to knock out walls and add walls as needed to create the third bedroom.
An Extra Bathroom
If you’re selling your home and it has only one bathroom, look for ways you can add an en-suite bathroom. Buyers prefer homes with a master bathroom and an en-suite. Weigh the cost of the bathroom renovation against the value of your home. You don’t want to overspend, but you do want to have an en-suite bathroom. The en-suite can just have a toilet, shower and vanity and doesn’t have to include the most expensive fittings.
En-suites that are connected directly to the master bedroom are popular today. However, it is not a prerequisite. The important thing is to have more than one bathroom.
Renovating Your Kitchen
The kitchen has become the centre of the home. Buyers will pay more for a home that has a nice kitchen than for a home with a kitchen that obviously needs updating.
How much you spend on a kitchen renovation will depend on the value of your home, but buyers are always looking for open plan kitchens and kitchens with plenty of storage space. Engineered stone benchtops are popular, but may cost more than the value they add to your kitchen in some cases. What is the Cost of a Kitchen Renovation? will give you a better idea of the range of costs. Match the cost of your kitchen renovation with the value of your property for a maximum return on your investment.