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Demand on the secondary housing market remains strong despite the weak economy.
Certain upgrades can add value to a property should you decide to sell, but before planning the renovations, it’s important to know which ones will yield the highest return on your investment.
Budget is also a consideration because you could end up putting in more money than is worthwhile considering the returns.
You must be sure about what you hope to achieve by renovating the house. Not every upgrade adds value to a home.
Here are some important points to consider when thinking about investing in a revamp.
1. Eliminating rooms
Think twice before changing the layout of the house as it can affect the long-term value.
A major design trend in recent years is creating a large master suite by combining two bedrooms that are next to each other.
It sounds like a good idea, but it may take buyers who are looking for a certain number of bedrooms out of the running.
For resale, it is always better to have more designated bedrooms, not fewer.
2. Overly high-end renovations
No doubt, most people would love a luxe renovation, but it is easy to go too far from a value creation perspective. Do not splurge on most door hardware, internal light fixtures and so on as people usually overlook these as added value.
Sometimes homeowners overspend on things no one else would notice but them.
For example, an all-slab marble bathroom does not provide a high return as a bathroom with one slab focus wall and matching tile throughout.
3. Renovations that are too costly for the location
For most buyers, the neighbourhood is more important than the house they are viewing.
Extensive additions in an area of modest homes, high-end finishes in a rundown suburb or expensive landscaping in a poorly maintained street will not increase the value of the home.
An exception may be if an area is undergoing gentrification, although most buyers would want to do the renovations themselves to their own taste.
Until most homes in an area have been upgraded, market demand is usually for fixer-uppers people can put their stamp on.
4. Too much customisation
It is good to create something you like according to your personality. But drastic cosmetic or custom renovations, such as wallpaper, expensive fixtures or painting a design on the walls will not increase the value of the house.
These features tend to be very personal to the current homeowner and don’t necessarily translate into added value for the next.
Opt for more classic finishes that can easily be updated with some small tweaks.
5. Do-it-yourself renovations
Do-it-yourself (DIY) is great way to save money on certain aspects of a renovation – simple tasks such as painting, switching hardware and so on — but not for more complex projects.
If you are planning to sell your home in the future, bring in the professionals for the jobs that are beyond most DIY-ers such as tiling the bathroom or skim-coating the walls.
If these things are not done professionally, a future buyer may notice the lack of quality of the work.
In the worst-case scenario, your DIY project can end badly.
For example, even something as simple as installing a sink can be a disaster. If it leaks, it can damage flooring or worse, cause structural damage to the home.
This article was written by Sharina Ahmad of PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.