To renovate, or not to renovate- that is the question?

Not satisfied with your home as it stands, and seriously thinking about renovating? It is completely understandable to have visions of your home with a remodelled state-of-the-art kitchen or a newly revamped Moroccan-inspired patio. Such thoughts may have you scrambling to the bank and spending thousands of your hard-earned money on excessive alterations to your property. However, homeowners should take some important aspects into serious consideration before jumping head first into preparations for a new and improved home.

Firstly, the most important thing that needs to be determined is whether the property that the homeowner is going to be spending large amounts of money on is actually worth the expense. At this stage, the selling of the house – in order to find a more suitable one- should be put up for discussion. Once the decision to remain in the house has been made, homeowners need to ask themselves three key questions: Is it the right thing to spend money on? Will I get my money back? And how much should I spend on the renovation?

According to Richard Gray, CEO of Harcourts South Africa, “People need to avoid overcapitalisation. For example, it is not worth it spending an exorbitant amount of money to create a mansion in an area that is not typically associated with high property prices as one will never get their money back.”

“Before spending their money, people should do their homework. Such things that need to be determined are: What the market is doing at that time? What the average selling price for a home in their area is? Did those who recently sold their homes in the area make their money back?” he continues.

Establishing the demographic of the area should be crucial before following through with plans to renovate, as demographics change, it will cause property to devalue or appreciate in value.

Once the above factors have been taken into account, homeowners need to ensure that the changes they wish to make to their home make sense to the configuration of the house. “Adding two extra bedrooms to a home that already has three bedrooms and not adding an additional bathroom is not the wisest decision. The changes need to suit the rest of the house and continue to be beneficial to subsequent owners” states Gray.

Although the above is necessary to take into consideration, when doing renovations make sure to do the changes based on personal enjoyment and not exclusively to increase the value of the property. At the end of the day, alterations to a home may make the home more appealing to potential buyers and create that important competitive advantage, but they will not necessarily increase the price of the property significantly.

Gray concludes, “Before making changes, people need to look at what the market is craving- security is currently at the top of the list, with bathrooms and kitchens always considered a great option when it comes to upgrading.”