08 Mar 2013
Home loans are difficult to get with the new credit rules and many existing homeowners who have thought about upgrading are staying put because they are worried they might not qualify for another home loan if they were to sell their property and buy again.
This is putting a completely different complexion on home renovations and alterations, says Berry Everitt, MD of the Chas Everitt International property group.
He says those who are upgrading with the idea of increasing their home value prior to selling need to consider which ‘fixes’ are likely to deliver the best immediate return on expenditure. Those with longer term plans to stay put have more freedom to make changes that will improve their own lifestyles.
Everitt says this doesn’t mean they can go overboard and create a mansion in an area of starter homes which they could never sell for what they’ve spent on it. However, it does mean that they can undertake projects that might take a bit longer to become cost-effective.
Everitt says based on the consumer preferences the group is currently encountering, there are five home upgrade choices at the moment that can improve lifestyle and add value in the longer term.
1. Improve security measures by installing an alarm system or improving the existing one. Put in motion-sensor beams or outside lights and upgrade the doors and garage doors. You will increase your peace of mind and the appeal of your home for potential buyers if you do decide to sell.
2. Improve your energy efficiency. Add proper insulation, a solar geyser, a heat pump, a wind-turbine or even a rainwater tank. You will reap the benefit for years to come in lower council bills and future buyers will love it.
3. Convert any outbuildings. If you have staff quarters or a garage that can be converted into a decent bachelor or one bedroom flat with its own bathroom and kitchen facilities, don’t hesitate. You can rent the space out to help pay your bond in the early years of homeownership and use it to accommodate teenagers, guests or a home-based business later on. It will be a definite plus for future buyers, especially if you’ve built a secure carport by then to replace the converted garage.
4. Add additional bathrooms. If you’ve settled in for at least the next five years, it’s worth adding a second bathroom to a one bathroom home, or a third bedroom to a two-bedroom home. These are bigger and more costly projects but they will make life easier with no queues in the morning and no sibling squabbles over space, as well as add value that can be recouped in the medium term.
5. Make a home office or study. If you have an unused bedroom or outbuilding that could be fitted up as an office, do it. But if not, it’s worth creating a distinct and quiet workspace away from the living areas. It can double as a homework or media space for children, and so many people are working from home these days that it is bound to have value for future buyers.
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