Property Investor Advice Column: Part 22
Don’t do it!
Home improvements to avoid
One of the appeals of owning your own home is that you’re able to mould the space to suit your taste – you have the freedom to create the house you’ve always dreamt of. And often, these improvements will add to the value of your home. Putting in a new kitchen, modernising your bathroom or improving your energy efficiency will not only make your life more comfortable, they are also likely add to your long-term financial returns.
Not all home improvements are going to make your property more desirable, however. You could be spending money you will never recover or you may be adding features that will be a turn-off to future buyers – so it’s worthwhile to think carefully about your approach.
For a start, be wary of anything too personal. Far from adding character, that floor made from old coins or a built-in aquarium are unlikely to appeal to the majority of homebuyers. You may be limiting how many people are going to be interested in your home at a later date.
Similarly, adding a special-purpose space rarely pays off. A movie room or sunroom might sound wonderful, but unless you live in a neighbourhood where these are expected, you are unlikely to be adding value. Most people would prefer to have a more functional space such as an extra bedroom or a bigger kitchen.
If you work from home and need an office, be careful about building or altering it so that it can serve no other purpose. Not everyone needs this type of area, so instead of built-in desks and bookshelves, think of using multipurpose fittings.
Niche electronic fittings or built-in home theatre systems are also tricky, because technology is changing so quickly. What might seem ultra-modern now can be terribly dated in just five years’ time and if it’s all set into the room, it can be costly to upgrade.
When it comes to the property’s exterior, watch your spending on expensive landscaping and outdoor features. A lovely garden is a great asset, but improvements such as extensive water features and pizza ovens are not going to appeal to everyone. Also, while pools are often a plus in South Africa, Jacuzzis and saunas can be the opposite. Most people recognise that they will rarely be used and are a maintenance headache.
Finally, think carefully about renovations that are well above the norm in your neighbourhood. House prices are dependent on the area in which the property is located, so the value of your home can only increase so far. A rule of thumb in this regard is to limit any major remodel to no more than 20% of the full value of your house.
Next issue: buying property with someone else
Text Patrick Cairns
Photograph iStock by Getty Images