Text by Diana Wemyss. Photographs by Anthony Johnson and Supplied
Source: This article was taken from the May 2011 issue of Garden & Home
Fancy yourself an amateur property developer or just want to ensure that your alterations add to the resale value of your home? Before you call in the builders, consider this expert advice on how to renovate for profit
There’s definitely money to be made from renovating a property, whether you make alterations to your own home or to a speculative buy that you plan to sell on for a profit and not live in yourself – but it’s important not to confuse the two. “The biggest mistake people make when renovating purely for resale is to think about what they want, rather than about what the market wants,” says Peter van Wyk of Maxim Property Development Group that renovates properties in the Cape.
Needless to say mistakes like this can be costly; to help you avoid common pitfalls, we asked the experts for advice on how to revamp a house for maximum return.
BUY THE RIGHT PROPERTY
“If you want to sell well, buy well,” says project manager Wendy Holmes of Living Design, who has been renovating properties professionally since 1975. “It’s no good paying top dollar for a house if, once you’ve renovated it, the selling price will have to be way over the price of the most expensive property in the area.”
Her advice is to find out what the highest-priced homes in an area sell for as well as what the demand for properties is like. “A suburb where the demand is high will offer a greater chance of a profit,” she says. “Buy the ugliest house in the best neighbourhood because no one else will want it and you’ll get it for a good price.”
Once you have this information, you can work out whether a renovation is a financially viable option. Developer Peter van Wyk explains: “Take the average selling price of similar properties in the area and deduct what the house you’d like to buy is worth; the difference is what you could spend on the renovation – but don’t forget to take whatever profit you would like to make into account.”
Decorator Shelley Sacranie, owner of the decor shop Artefect, points out that if you choose a property that’s under capitalised you may be able to improve its value just by painting the walls and redoing the flooring or by adding space, such as turning a three bedroom house into a five bedroom house.
When considering doing major alterations or building on additions, Wendy points out that it’s important to purchase a property with the ‘right bones’ – one with a square or rectangular footprint will often be easiest to work with – and cautions against buying a house that’s been badly renovated already.
As any major building work will require plans to be drawn up by a professional and approved by the relevant municipal authorities, Andre Rademeyer of ST&AR Architects suggests that it’s a good idea to consult an architect before you buy the property.
ALWAYS CONSIDER WHAT BUYERS WANT
While researching the area where you’re thinking of purchasing a property, it’s essential to find out what sort of people buy homes there: are they professional couples, large families or small families? Are they young or old?
This information will steer you in the right direction when it comes to deciding what type of improvements to make. “Well-appointed kitchens and bathrooms generally add the most value to a property, but this will ultimately depend on the person wanting to buy it,” developer Peter van Wyk explains. “For instance, young first-time buyers may put more emphasis on living spaces than on bathrooms and garages, whereas buyers looking for a family home will look for ample parking and good kitchens and bathrooms.”
When it comes to decorating and choosing finishes and fixtures, play it safe and opt for a neutral look that will have mass appeal. “Putting your own personal stamp on a house can often be the wrong thing to do as your idea of what’s stylish may be very different to everyone else’s,” says Peter. “Try not to be too distinctive; keep it simple so that potential buyers will be able to picture themselves living in the space and think about how they would make their own mark on it.”
KEEP THE BUDGET UNDER CONTROL
“When renovating for profit, always ask yourself if something is going to add extra value,” says developer Peter van Wyk. “For example, will marble floors make more profit than porcelain tiles? If the answer is no, choose the more cost-effective option.”
Cost-effective does not mean cheap, however. “A cheap toilet, for example, is a liability as the porcelain might not be as strong,” says project manager Wendy Holmes. “Besides, the labour involved in terms of plumbing and tiling will be the same whether you purchase products from the cheapest or the ‘middle-of-the-road’ price bracket.”
As bathrooms and kitchens almost always help to sell a property, Peter maintains that you shouldn’t skimp on the finishes used in these areas. “If you can’t afford a whole new kitchen or bathroom, try replacing the worktops and vanities or even the door handles to give the cabinets a fresh new look,” he says.
TRANSFORM A KITCHEN INTO A DRAWCARD
A stylish, functional kitchen can bump up your home’s resale value. When renovating, follow these tips from Nick Rawlins of House of Kitchens:
- The rule of thumb is to spend 7-14 percent of the estimated market value of the renovated house on the new kitchen, especially on items like the work surfaces, units and appliances.
- Today open-plan kitchens sell houses; it may be worth the extra expense and building work required to create one.
- A less expensive, practical kitchen will sell better than an over-priced, poorly-designed space.
- Choose a ‘safe’ colour scheme to appeal to as many buyers as possible.
- Create a scullery/laundry addition; here you can use cheaper, yet hard-wearing materials helping to bring the total cost of the kitchen renovation down.
- Tiles are still the best priced option to use both on the floor and the wall behind the hob. It’s not necessary to tile all the kitchen walls; washable paint works just as well.
IT’S SHOWTIME
Cape estate agent Helen Hoare stresses the importance of presenting your renovated house in the best light on show day.
Gunge-free bathrooms, clean, shiny windows, a sparkling pool and platters of fruit and vases of fresh flowers will help to secure a sale.
Danie Louw of ADsquared Architecture & Design opted for two basins, closed storage and back-lit mirrors to add value to this Waterkant bathroom.
MAKE THE BATHROOM A BEST-SELLER
Lisa Millbacher Designer of Bespoke Bathrooms gives some tips : on transforming a bathroom into a strong selling point:
- Choose neutral tiles and, as people like to ‘furnish’ their bathrooms with mirrors and paintings, leave some wall space untiled.
- While you can save on wall and floor finishes never skimp on fittings. Invest in the best-quality taps and shower heads you can afford and buy products that are made from DZR-approved (dezincification resistant) brass so they don’t rust.
- If there is space, include two basins in the master bathroom. It doesn’t cost that much more but it looks more luxurious. Give an ordinary bathroom a glamorous new look by replacing a single central light with recessed downlights, back-lit mirrors and wall lights.
- If you are renovating your own home, take advantage of the present subsidies from Eskom and install a solar geyser. It will definitely pay for itself.
- Improve natural light by replacing old-fashioned patterned or sandblasted glass with clear glass; if privacy’s an issue, add a horizontally slatted blind or vinyl sticker in a custom design. If the budget allows, enlarge the windows to take advantage of lovely views. If the outlook isn’t great, add a high strip window or skylight.
- Storage for toiletries and towels is a must. Opt for closed storage if space is tight as it looks much neater. Also remember that cabinets with doors will usually be more cost-effective than drawers.
To bring costs down when doing structural alterations, Wendy suggests that you keep any changes within the original footprint of the house. “Knocking down interior walls is relatively inexpensive, whereas anything you add on will be costly in terms of foundations and roofing.”
It’s also important to be aware of any hidden costs. Architect Andre Rademeyer says: “Opening up rooms can reveal problems such as inadequate foundations or if you replace a door, the rest might look tatty and also need to be replaced.”
He adds that most building work comes in at 20 percent over and above the tender price. (A quote is a less formal document with room for negotiation; a tender is more thorough and the conditions and costs are clearly defined.)
Another tip is to stipulate to your builder which materials should be reused. “For instance, roof timbers can be used for flooring,” says Andre. Incorporating salvaged materials saves costs and can add character to a revamped house.
SOURCES
- Andre Rademeyer, ST&AR Architects – 021 788 2714 or www.studiostar.co.za
- Oanie Louw, ADsquared Architecture & Design 021 431 2724
- Helen Hoare, Helen Hoare Properties 083 658 2970
- Lisa Millbacher, Bespoke Bathrooms 021 422 1331 or www.bespokebathrooms.co.za
- Nick Rawlins, House of Kitchens 021 853 3008 or www.houseofkitchens.co.za
- Peter van Wyk, Maxim Property Development Group 021 439 5216 or www.maximgroup.co.za
- Shelley Sacranie, Artefect 021 447 0583
- Wendy Holmes, Living Design 082 569 3989 or www.livingdesign.co.za
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