Do renovations increase the house price?
Whether you are renovating your house to create more space, rejuvenate or to put it in the market, getting to grips with how renovations impact the sale price will help you make an informed decision.
Many consumers mistakenly assume that when you invest in renovations, the money spent will be regained when selling the house. However, not all renovations you make will necessarily increase the value of the house. For example, adding an expensive swimming pool can often be a disadvantage due to the required maintenance. As a result, some potential buyers may not be willing to pay more for it and would have preferred to have the extra space instead.
Here is a list of renovations that can potentially increase the value of a house in lower to middle income neighbourhood:
- Kitchen and bathroom alterations – these renovations add significant value as bathrooms and kitchens are regularly used by consumers.
- Garage – having a garage increases security in your house and can also reduce your car insurance premiums.
- Energy saving features – as the cost of electricity continues to increase; many households are looking for efficient means of saving. Therefore, energy saving features like a solar geyser will add significant value.
- Automatic gate and garage door – these additional features increase security and convenience in a household.
- Cottage – cottages and outside rooms are useful if you are staying with your domestic worker. The rooms can also be rented out to generate extra income for the family.
- Storeroom – having storage space can give you an advantage when selling the house. Every household needs space to store important household content that are not used regularly.
Also be careful not to over-invest in renovations that may result in your house being overpriced, compared to other properties in your neighbourhood. You may find it difficult to attract buyers, and eventually have to sell at a loss.
Lastly, don't try and cut costs by hiring unqualified renovators. Poor workmanship will cost you more in the long-run and may require the job to be done all over again.
If you are unsure about the current value of your house, you can consult the bank or a professional valuator to assess it for you. You can also get a free value estimate through the FNB Banking App and online. For more information please call Tel:(061) 299 2222 or visit www.fnbnamibia.com.na