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Renovate and Profit – Revamp for max return
Fancy yourself an amateur property developer or
just want to ensure that your alterations add to the
resale value of your home? Before you call in the
builders, consider this expert advice on how to
renovate for profit.
There’s definitely money to be made from
renovating a property, whether you make alterations
to your own home or to a speculative buy that you
plan to sell on for a profit and not live in yourself –
but it’s important not to confuse the two.
“The biggest mistake people make when renovating
purely for resale is to think about what they want,
rather than about what the market wants,” says
Peter van Wyk of Maxim Property Development
Group that renovates properties in the Cape.
Needles to say mistakes like this can be costly; to
help you avoid common pitfalls, we asked the
experts for advice on how to revamp a house for
Buy the Right Property.
“If you want to sell well, buy well.” says project
manager Wendy Holmes of Living Design, who has
been renovating properties professionally since
1975. “It’s no good paying top dollar for a house if
once you’ve renovated it, the selling price will have
to be way over the price of the most expensive
property in the area.”
Her advice is to find out what the highest-priced
homes in an area sell for as well as what the demand
for properties is like. “Buy the ugliest house in the
best neighbourhood because no one else will want it
and you’ll get it for a good price.”
Once you have this information, you can work out
whether a renovation is a financially viable option.
Developer Peter van Wyk explains: “Take the
average selling price of similar properties in the area
and deduce what the house you’d like to buy is
worth; the difference is what you could spend on the
renovation – but don’t forget to take whatever profit
you would like to make into account.”
Decorator Shelly Sacranie, owner of the decor shop
Artefect, points out that if you choose a property
that’s under capitalised you may be able to improve
its value just by painting the walls and reducing the
flooring or by adding space, such as turning a three
bedroom house into a five bedroom house.
When considering doing major alterations or building
on additions, Wendy points out that it’s important to
purchase a property with the “right bones” – one
with a square or rectangular footprint will often be
easiest to work with – and cautions against buying a
house that’s been badly renovated already.
As any major building work will requrie plans to be
drawn up by a professional and approved by the
relevant municipal authorities, Andre Rademeyer of
ST&AR Architects suggests that it’s a good idea to
consult an architect before you buy the property.
Always Consider What Buyers Want
While researching the area where you’re thinking of
purchasing a property, it’s essential to find out what
sort of people buy homes there: are they
professional couples, large families or small families?
Are they your or old?
This information will steer you in the right direction
when it comes to deciding what type of
improvements to make. “Well-appointed kitchens
bathrooms generally add the most value to a
property, but this will ultimately depend on the
person wanting to buy it,” developer Peter van Wyk
explains. ” For instance, young first-time buyers
may put more emphasis on living spaces than on
bathrooms and garages, whereas buyers looking for
a family home will look for ample parking and good
kitchens and bathroom.”
When it comes to decorating and choosing finishes
and fixtures, play it safe and opt for a neutral look
that will have mass appeal. “Putting your own
personal stamp on a house can often be the wrong
thing to do as your idea o what’s stylish may be very
different to everyone else’s,” says Peter.
“Try not to be too distinctive; keep it simple so that
potential buyers will be able to picture themselves
living in the space and think about how they would
make their own mark on it.”
Keep the Budget Under Control
“When renovating for profit, always ask yourself if
something is going to add extra value.” says
developer Peter van Wyk. “For example, will marble
floors make more profit than porcelain tiles? If the
answer is no, choose the more cost-effective option.”
Cost-effective does not mean cheap, however. “A
cheap toilet, for example, is a liability as the porcelain
might not be as strong,” says project manager
Wendy Holmes. Besides, the labour involved in
terms of plumbing and tiling will be the same
whether you purchase products from the cheapest or
the “middle-of-the-road” price bracket.”
As bathrooms and kitchens almost always help to
see a property, Peter maintains that you shouldn’t
skimp on the finishes used in these areas. “If you
can’t afford a whole new kitchen or bathroom, try
replace the worktops and vanities.
Transform a Kitchen Into A Drawcard
A stylish, functional kitchen can bump up your home’s resale value. When renovating, follow these tips from Nick Rawlins of House of Kitchens:
– The rule of thumb is to spend 7 – 14 percent of the estimated market value of the renovated house on the new kitchen, especially on items like the work surfaces, units and appliances.
– Today open-plan kitchens sell houses; it may be worth the extra expense and building work required to create one.
A less expensive, practical kitchen will sell better than an over-priced poorly-designed space. Choose a “safe” colour scheme to appeal to as many buyers as possible. Create a scullery / laundry additions; here you can use cheaper, yet hard-wearing materials helping to bring the total cost of the kitchen renovation down.
Tiles are still the best priced option to use both on the floor and the wall behind the hob. It’s not necessary to tile all the kitchen walls; washable paint works just as well.
“An attractive garden will always increase your chances of resale,” says project manager Wendy Holmes. “Every part of a site counts. Even the narrowest side alley can add to the appeal of a property when revamped into a usable space,” says Wendy.
“Where possible, create direct access into the garden or onto a terrace to improve flow and add light,” advises Wendy.
Salvaged parquet floors were added to give this revamped home character. Decor by Shelley Sacranie
Cape estate agent Helen Hoare stresses the importance of presenting your renovated house in the best light on show day. Gunge-free bathrooms, clean, shiny windows, a sparkling pool and platters of fruit and vases of fresh flowers will help to secure a sale.