One of the greatest dangers when renovating your home is over-capitalisation. Over-capitalisation means that the total expenditure on your home, including the purchase price and the cost of alterations, exceeds the amount you could sell the house for in the foreseeable future.
A number of agents have been asked for their advice on renovating; what improvements increase the value of a home, and which ones don’t.
“Do not spend more than one-quarter of what your property is worth on improvements,” says Mona Broadhurst, Just Property Alberton. Find out the average price paid for properties in your area and make sure your renovations won’t push you over that.”
The majority of buyers will negotiate on price, so choose which upgrades you do wisely – this could mean the difference between spending possible profit on unnecessary “improvements”, explains Johannes van den Berg, Just Property N1 City Branch (Burgundy Estate Office). Kitchens, bathrooms, entertainment areas and sustainability (e.g. water harvesting, alternative power) are important to today’s buyers but overspending on each of these is easy, so upgrade with caution and due diligence.
“Before you do renovations, especially if it’s for the purpose of getting a quick sale, get a qualified property practitioner (estate agent) specialising in your area to do a valuation on your property and give input on which improvements will achieve a better selling price,” says Maritza van Rooyenof Just Property Durbanville. A property practitioner will look at your property objectively and with an understanding of how it compares with other properties on the local market.
What improvements will positively influence the value of a house?
First focus on the basics. Curb appeal is one of the main factors that attract interest. “It’s important to make sure that the buyer’s first impression of your property is positive. Just changing your garage door can make a huge difference,” says Maritza.
Johannes agrees, advising that sellers make sure the garden is neat and tidy, and repair or repaint the exterior of a property. “Inside, it is vital to keep clutter to a minimum. A proper clean will also go a long way,” he says.
Tracey Hutton of Just Property Port Elizabeth adds that DIY repairs and a fresh coat of paint will do wonders. “But choose neutral colours for the walls, and stick to cold colours for decor and accents so that buyers can imagine their own furniture in your spaces.”
Lindy Breytenbach of Just Property Mossel Bay and Hartenbos says that improvements to the kitchen and bathrooms are good investments. “Older cabinets can either be painted and handles replaced with new hardware or completely gutted and replaced with new cabinetry. But keep to light neutral-coloured floors and walls as this will make your rooms look bigger and brighter. A new gas stove will immediately lift a boring old kitchen, but the gas installation should be compliant and come with a certificate.”
Tracey suggests taking the demands of current times into account when thinking about how you can add value to your home. She suggests improvements like a gutter-fed water tank, an inverter system or solar panels.
Lezaan Mentz of Just Property Kalahari agrees: “Consider a pressure pump for municipal outages and climate-control devices. And security upgrades, like well-placed lighting outdoors and beams, are definitely worth the investment.”
What improvements do people make that may negatively affect the value of a house?
You might think that adding a lettable granny flat would increase value, but it should be properly planned. Lezaan and Mona note that converting a garage or outbuilding into a flat can mean you lose a garage as well as security and privacy. “Properties like these stay on the market for longer,” says Lezaan.
Johannes also emphasises the importance of proper planning and approval for any additions. “Yes,” says Maritza, “always make sure that your improvements are approved and on plan, so you don’t have any problems when it’s time to sell.”
Johannes warns against very bold colours and finishes. “Spending a lot of money on finishes that are not neutral should be avoided,” he says. “You’d be surprised at the difference even the flooring can make. We sometimes come across a seller who has spent thousands on carpets, when these days most buyers prefer laminate flooring or tiles.”
The cleverest improvements our agents have seen
“There are many simple ways to upgrade a kitchen or bathroom that don’t cost a fortune,” says Tracey. She suggests painting old fashioned tiles white, painting a feature wall or some artwork.
Debi shares a small bathroom renovation that made a huge improvement. The guest toilet was at the end of a passage, sharing a wall with a smallish family bathroom. “The owners brought the loo forward, inserted an extractor fan, and extended the next-door bathroom into the space where the toilet had been. This allowed them to add a lovely shower.”
The best low-cost improvement Lindy has seen was shelving that was painted the same colour as the wall. “It looked expensive and sleek, and solved the storage problem in the house.”
“Outside, it’s a great idea to paint a vibracrete wall dark grey and add some hanging plants to soften it,” says Tracey. “And get your garden going before you list your property – if you start in time, it doesn’t have to cost much and it’s amazing the difference this can make to your property price,” says Maritza.
Johannes notes that a swimming pool, while expensive, can significantly impact the comparative value of two otherwise similar properties: “The one with a sparkling pool will almost always fetch the higher price, usually more than covering the cost of installation.”
“Our agents get called in when it’s time to sell and by then people have already made mistakes, like emotional choices rather than wise investments,” concludes Paul Stevens, CEO of Just Property. “The smartest idea is to buy the worst looking house in a good area. Over time, make careful improvements. Ask your local agent where to start. They’ll be able to give you the right advice.”