Home Improvements that Pay Off

High house prices and transaction costs are prompting many South African homeowners to improve their existing homes rather than buy up.

Any homeowner would like to make home improvements that pay off by way of a quicker sale at a higher purchase price. Here are some tips and advice to keep in mind when improving your home.

Improving Rather Than Moving

An increasing number of homeowners choose to renovate or make additions to their homes, rather than pay the high transaction costs of upgrading to a bigger or newer home. Homeowners can use some of the equity they have gained in their existing homes over the past few years to fund these improvements.

The positive side to improving rather than moving, is that the existing housing stock is improved and modernised. It can lead to the rejuvenation of whole areas. But there is also a risk of over-capitalisation.

Don't Over-Capitalise

Over-capitalisation occurs when homeowners develop their property to the point where the cost of renovations added to the original cost of the home exceed the current market value of the property. There is less danger of over-capitalisation where the value of the property has appreciated considerably over a number of years of ownership. Over-capitalisation is also less likely where the owner purchased a home relatively cheaply in a more expensive suburb.

Homeowners need to weigh the original cost of the house plus the cost of any planned improvements against the current sale prices of properties in their area before starting any work. Ask a local estate agent for acomparative market analysis (CMA) of the property as it stands.

Homeowners need to take care when renovating or making extensions to a home in a modest suburb. Don't spend more on improvements than the highest prices currently being achieved in that area. Over-spending like this will limit the property's resale potential and put the homeowners in a difficult financial position if they needed to sell suddenly.

Improve And Enjoy

Homeowners should consider the lifestyle benefits of any improvements. They may, for example, not immediately be able to recoup the costs of a new swimming-pool, spa-bath or playroom if they sell immediately, but they will derive enjoyment from these improvements. This enjoyment factor may persuade them to add such improvements anyway, especially if it means they can delay a move.

Improvements And Property Value

Simple improvements are unlikely to add value to a home, in the sense that it will move into a higher price bracket. What it should do, though, is make any sale quicker and easier. In turn, this makes it more likely that buyers will pay close to the asking price for the property. So the amount of money in your pocket at the end of the process should be more.

Only a few projects will actually recoup their full costs, but this might not really matter.

Unless you are buying a property purely as an investment, any improvements will have a value of use for you. This value could be more than any increase in the value of your home. Improving your home, using it for several years and recouping most of the costs on selling, can be as valuable - if not more valuable - than a simple cash gain.

If there is one rule for improvements, big or small, it is to do whatever you do well. Quality will almost always hold its value in the longer term. So go for the best you can afford, and then sit back and enjoy it.

Home Repairs

A homeowner has to protect the investment he/she has already made - this means repairs. Without continuous love and attention the value of a property will deteriorate along with its condition. Put simply, regular maintenance is the best investment you can make in your property.

If your house is a wreck, or needs lots of other work, it will be cheaper to have small repairs done at the same time. Even if the property is basically sound, it pays to fix problems before spending on more aesthetic improvements. Fixing the basics might not add value to your home, but it will make it so much easier to sell when the time comes. Neglecting repairs will not make them go away - they just become worse, especially where damp, rot or infestation is involved. When you come to selling, a buyer will be more impressed with ongoing maintenance than quick fixes aimed at selling the property.

After the leaky roof and peeling window frames are fixed, you can start making the home more comfortable. Air conditioning, a new kitchen and bathroom are usually some of the basics at the top of most people's lists.

If you are carrying out any structural work, it will add more to your home, not to mention your piece of mind, if you use quality contractors. It makes sense to choose trades people who are members of a professional body and who will give guarantees on their work. This is vital for repairs such as damp proofing, electrical work or structural repairs. Home owners carrying out electrical repairs and alterations should make sure the contractors issue the appropriate safety certificates - especially if you plan on letting.

Repairs often take longer and cost more than anyone anticipates, so it is best not to commit to other expensive projects before the basics are right.

Using existing space

It is best not to rush into any projects. Take time to think about the layout of the home, how the rooms fit together and where services such as electricity, gas and drains run. When you have a feel for what is where, and where it could go, it is time to start thinking about fitting out the rooms.

The arrangement of your home might be perfect, but some rooms could benefit from a different layout or a different location. When remodelling, remember that space sells. Buyers do not want to invest large capital in a home that is just too small. Talk to a designer about how to take space that is not being used in one room and adding it to another. This redistribution of space can make your home seem much larger than it actually is. You can also create the illusion of space through proper placement of lighting and mirrors.

Open Spaces

More buyers are prepared to consider multi-function rooms and spaces these days. A house or flat with more rooms won't automatically have a higher value than one with fewer rooms anymore. How well the space works is more important nowadays. But at the end of the day, the number of rooms might still influence the value of a house. So, knocking down walls may not be a good move if a pair of double doors will do the trick.

Room Addition

With rising property prices and space at a premium, extensions and loft conversions are good bets for adding value. Extensions and loft conversions add space, and space almost always adds value. However, these are major projects and shouldn't be undertaken lightly. Loft conversions and extensions are expensive projects, and although they will add value, there are few guarantees that they will cover their cost.

Adding a new room is likely to add value if the addition puts your home in the same class as the others in your neighborhood.

Family rooms, sun rooms, master bedroom suite and a braai-room are fashionable improvements that will have a lot of useful value for your family and the extra space may be just what you need.

Alterations that work with the structure and layout of the house are generally the best investments. Extensions should blend with the rest of the house and not look significantly different in style. If the new layout feels 'odd' or uncomfortable, it could have a negative effect. Simply adding rooms to the top of a house might not be the best option. If the downstairs rooms are too small, the house can feel top heavy, and if there is only one bathroom, the extra rooms will not be as suitable as some extra bathrooms. In the same way, an extension that eats too far into the garden might actually put off some buyers, rather than add value.

It is better to invest in the design of the extension, using an architect if necessary. The home will feel more of a piece and it is an advantage to have an architect-designed home when you want to sell it. Remember to set money aside for general redecoration. If the rooms that have not been improved have a fresh coat of paint, the whole house will look much better.

You might have other reasons for adding space, such as accommodating Granny, but if adding value is the main goal, make sure extra rooms are added with care. Think about your "ideal buyer" when planning renovations.

If you're selling a flat in the city, your ideal buyer is likely to be a high flying professional with little time on their hands. The buyer will be looking for all the modern conveniences and a property that needs little maintenance. Whereas a four bed home in the country will probably appeal to a family who prefer traditional fixtures and fittings.

Extra bathrooms and large kitchens usually make good investments in family sized homes and an extra garage in a busy urban area will also add value.

Choose your materials and styles to compliment your existing home. It is important to consider the traffic flow and the accessibility of your room additions.

Kitchen Renovations.

Many families see the kitchen as the heart of their home and understandably want a good kitchen. Updating an older kitchen is one of the most valuable remodelling projects you can do. If you sell the home in the not-too-distant future, you stand a good chance of recouping nearly all of your remodelling investment on this project (in some cases, you can even make a profit!).

The kitchen is one of the busiest areas of the home and experiences a lot of wear, so it shows its age earlier than most other rooms. Also, with recent lifestyle trends shifting toward the kitchen as the heart of the home (rather than simply the utilitarian space where food preparation takes place), remodelling a kitchen can give your home a tremendous new appeal. A kitchen with space for a table for informal eating is a bigger selling point in many homes than a kitchen with wall-to-wall fitted units.

New flooring, fittings, countertops and appliances can be costly, but buyers typically look for updated kitchens. You are likely to recover a large percentage of your kitchen renovation expenses on re-sale. If your basic kitchen plan is good, you may not need a major re-modeling. Even a minor facelift-painting, new floor covering, new cupboard doors, new cupboard hardware, etc. will help homeowners achieve a faster sale at a better price.

Light, neutral colours, plenty of cupboards and counter top space, new light fixtures and hi-tech appliances are the top value adding features.

Bathroom Addition

Bathrooms have also become popular improvements because of better ranges of fittings from well-known brands and designers. Upgrading an existing bathroom is likely to pay off, both in value and marketability, especially in an older home. Remember, a buyer is not going to base their decision on how expensive your faucets or showerheads are, but they will expect that everything works well. Extravagance in this area is not likely to add more value to your home than the costs of the improvements.

Like kitchens, bathrooms age quickly-they get a lot of use, and styles change relatively frequently, so don't expect to get the same return ten years down the line. If you want the biggest return on your investment, pick neutral colours -- white for the bathroom -- and quality fittings. Quality costs more initially, but it will look that much better a few years on.

Adding a new bathroom or renovating one that looks worn can increase the sale price of a home enough to cover much of the original investment within a year of the remodelling project.

Improvements that were once seen as luxuries, such as a shower or second bathroom, are now 'must haves' for many buyers. Like a living room, an additional or improved bathroom will most likely add to your enjoyment of the home while you live there. Consider additions such as an en-suite bathroom from the start, as the cost of fitting a second bathroom will be less, if it is done alongside other work.

A second bathroom is not only a convenience. For many households a second bathroom has become a neccessity. A second bathroom may sharply enhance the sale possibilities of your home. Two and three bathrooms are the accepted norm in many neighborhoods, so if your house is lagging behind, you can't go wrong by adding an extra bathroom.

Upgradeing an existing bathroom may also pay off in both value and marketability, especially in an older home. Just remember that you are renovating an existing bathroom. Buyers buy a three bedroom house with two bathrooms, not a three bedroom house with one beatiful bathroom and one nice bathroom. The fact is that buyers don't neccisarily pay extra for a beautifull bathroom. They just don't think that way. The increase in the value of your home from a bathroom renovation, allthough it may cost a lot, may not be as big as you planned.

Go for good lighting, large mirrors, easily cleaned materials, plenty of storage space and neutral colours in your bathroom. It is important to consider the practical location and accessibility of a bathroom addition.

Outdoor Living Areas

Outdoor living areas allows you to take the inside outside. Our sunny summers encourage outdoor living. What better way to spend a summer weekend with family and friends than outdoors at the braai area?

The best value adder where outdoor living areas are concerned are pools and outdoor living areas that are incorporated into the lounge or family room, preferably overlooking your well-kept garden.

The simple addition of a pool alone may not add tremendous value if not adding to the overall ambience of the home. An impractical or unattractive pool may actually decrease the value of a home.

For those with existing pools at the bottom of the garden, a gazebo, thatched lapa or sheltered braai area tends to "connect" the home with your pool. Water tends to add a feeling of tranquility to any home - whether for entertaining guests or merely appreciating that well-earned leisure time.

Creating a living area outside doesn't have to involve a lot of construction. An inviting "kuier hoekie" under that shady tree in the back yard also adds value, even if the garden furniture moves with you!