Renovation can increase the value of your property investments
By: Nesa Rahmat/
Image credit: Grant McLean/Flickr
Getting ahead in real estate investments is not just about buying properties – the most strategic move for you may be to improve the value of a property you already own, even your home. If you are happy where you are, renovation can be a sound financial strategy. When you renovate your own home, you win twice – once when you enjoy the benefits of a better home, and once again when you sell the home.
When it comes to resale value, however, not all renovations are created equal.
Let’s look at an example. Suppose you live in a landed property and fancy a hot tub on your back deck, and decide to invest $10,000 or so. Will that add $10,000 to the value of your home? Likely not. The truth is, not everybody wants a hot tub. In fact, somebody bidding on your home might not want to bother with the maintenance, and may be inclined to get rid of it. Their bid, therefore, will not take your investment into account – it might even be seen as a negative.
The lesson here is that when you’re prioritising your renovation, make sure you consider which ones add the most value to your home.
Here are some guidelines for renovations:
- Chose improvements that are most popular with prospective buyers. Kitchens and bathrooms are at the top of the hit list according to statistics gathered by several agencies.
- Keep your home in top shape. Homes that are not looked after deteriorate rapidly in value. For private landed properties, a leaky roof, for example, can cause damage to your hardwood floors. Siding that is in bad shape can lead to animals and other pests getting into