How to increase your home's value by renovating

Renovations can offer a substantial return on investment, often as high as 100% or more on the amount spent within the first 12 months. See our return on investment chart. However there are pitfalls to renovating - not every renovation will be profitable unless you plan carefully.

Some improvements may not significantly increase the value of your home but might help you sell quicker. You need to carefully weigh the cost against its likely return. During a recession or housing slowdown, it may be more cost-effective to stick with 'kerb appeal' and interior cosmetics.

1. Clean up outside

This is the very first thing home buyers see, yet it's an area that's often neglected. Ensure the lawn is mowed and cleaned of garbage & leaves. Trim shrubs & hedges and keep hoses, sprinklers and other gardening/landscape tools out of sight. Buy new welcome mats and a new letter box if the old ones have passed their use-by date. If you have cash to spare, consider a professional landscaping solution - or take out a short term loan to cover this cost. (see our Loan Packages)

2. Improve the look of the house exterior

Your home's exterior needs to create a strong first impression. Replacing or rendering the exterior cladding of a house has been shown to have the highest return on investment, exceeding the return from other renovations such as kitchen and bathroom makeovers. However rendering can be expensive and fo anyone on a resticted budget, a new coat of paint can perfom miracles. If you decide on a new colour, valuers recommend selecting a neutral colour such as off-white or beige.

3. Get rid of Barking Dogs

It's a good idea to consign all family pets (with perhaps the exception of the budgerigar) to a distant place temporarily. The worst thing that can happen is for potential buyers to be greeted by a barking dog (or an overly affectionate one!) Next is having a cat prowling inside. Some people are allergic to pets, so it's best all trace of them be removed. Remember that house pets do cause odors and these often aren't obvious to the residents because they've lived with it.

4. Odors and Smells

An odor is a smell that is considered offensive and a smell can also be an odor if it isn't immediately recognized as one that's pleasant. So air the house for several days prior to inspections. Track down the cause of any offensive odors and eliminate them. In bathrooms make sure the drains aren't a source of odors, sometimes stagnant water in drain u-bends can harbor bacteria and cause odors. Run all taps for a few minutes to clear these then disinfect the drains.

Thoroughly clean carpets and upholstery and give up food spices and smoking for the duration of the inspection period. A pot of coffee brewing on the stove, baking bread - these are some of the aromas that will help add a favorable atmosphere to your home.

5. Kitchen Renovations

A spacious and stylish kitchen can sometimes sell the house by itself. Improving the 'marketing appeal' of your kitchen can be an expensive project involving a kitchen renovation specialist and a long line of trades people. Or it can be a simple makeover with a clever repaint and new sink and white goods.

6. The Bathroom

Adding a spa, re-tiling the floor, upgrading the toilet or bathtub will improve the value of the bathroom. A major renovation should be preceded by a consultation with a design professional who can advise you on the latest design trends. Ensuring all mould and stains are removed are simple ways to improve the look of the bathroom. So get scrubbing.

7. Make more Space

Buyers try to imagine their family living in your house, so create as much space as possible. Remove items where you can to create a minimalist setting for each room. A clean, spacious room will be more appealing than a cluttered one with more floor area.

8. Keep the look Simple

Go for simplicity if you can - remove any items that might be regarded as "strange" - for example that moose-head over the fireplace, or the stuffed birds under glass. One Sydney real estate agent reported that he had a client whose living room had a collection of shrunken heads on the mantle. This might be great if your buyers are anthropologists, but for the average buyer such morbid items can send the packing.

9. Lighting

Good lighting can create ambiance and open your house. Have the lights on if the house is in shaddows. Schedule your inspection times and try not to have buyers arriving late during winter. Also take into account your buyers - older people are more sensitive to glare while younger buyers are more likely to prefer bright or direct lightning.

Summary

Many improvements may not significantly increase the value of your home but will almost certainly help you sell faster. For major renovations you need to weigh the cost of the improvement against the likely return.