Increasing the value of a property with home improvement work is a New Zealander’s dream, but there are some renovation jobs that don’t add resale value, experts say.
In recent years, homeowners who cannot travel have spent a lot on renovations, with It is estimated that $2.4 billion was paid for consented modifications and additions. only in 2021.
Rising interest rates and costs have led to a sharp decline in renewals this year, says commercial employment platform Builderscrack. Despite this, making home improvements is still important to many Kiwis.
But not all renovation jobs are created equal, and while some improvements add value to a property, others do not.
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Renovation expert Jen Jones of Nine Yards Consulting says this is only a problem if people are making improvements and want to make a profit on their investment in them.
“If that is not the case and they plan to live in the property for more than eight years, they will benefit from the improvements and gain value that way.”
If homeowners want a tangible return on an improvement, the question is not whether the work increases the value of the property, says Chris Farhi, head of insights at Bayleys.
“In reality, the question is whether the added value is greater than the cost of the work.”
With that in mind, here are five upgrades that won’t add resale value to a home.
Many people dream of having a backyard pool in the summer, but installing one is unlikely to generate financial benefits.
One reason is that many potential buyers are actually put off by the maintenance requirements and safety issues that come with swimming pools.
Another is the expense involved, as it takes more than $100,000 to install one and ongoing maintenance costs. Farhi says that once costs are taken into account, pools become value neutral.
“Houses with pools generally have higher prices, but they also tend to have larger sections and be high-end. This probably explains the higher prices around them.”
They are likely to add value for a subset of homes and buyers, specifically high-end homes or buyers with children of the right age, he says.
Converting a garage into an extra bedroom or home office may seem like an upgrade that will pay off. But that’s not the case, Jones says.
Garage conversions tend to be a shortcut to solving a space problem, and their locations are rarely optimal for what people want to do, he says.
“But the biggest problem is that most people want a safe place to park their car and some space to store it. That is considered valuable.
“Changing it for something else that a lot of people don’t want takes away more than it adds, especially once you factor in the time and money required to do it.”
Battered and worn fences surrounding a section do not look good. But replacing fences that are simply in disrepair or mismatch won’t recoup what they cost or generate additional value, Jones says.
“If you have a fence with three different sections, it is better to repaint the entire fence black and plant in front of it rather than spend $10,000 installing a completely new fence.
“The plants will grow quickly and before long you won’t even notice the fence.”
At the same time, it’s a mistake to underestimate the appeal of a property on the street, he says.
“The façade does matter, because it suggests where people come in and what the property is like.”
But less expensive improvements, such as repainting fences, decks and front doors; replanting, including sod if necessary; and replacing exterior lighting improves street appeal and provides good returns.
There are many benefits to be gained from installing double glazed windows, but increased profits on resale is not one of them.
Double glazing improves insulation, reduces energy bills and reduces noise, and this leads to a better living experience, says Jones.
“But you could easily spend $50,000 or more, and while it might be worth spending to make your home more comfortable, buyers aren’t looking for it as a feature they’ll pay more for.”
Since 2008, most new homes built require double-glazed windows, so many people take this feature for granted.
Quirky interior design
Unusual paint choices, feature walls, and quirky wallpaper may suit the homeowner’s personality, but anything in this space that isn’t universally liked doesn’t add resale value, Jones says.
“There’s a reason real estate agents tell people to paint everything white: it allows them to better visualize life in it.”
Farhi says eclectic design options are unpredictable and turn off many buyers. “If you’re thinking purely from a value perspective, it’s best to go with a neutral palette.”
If homeowners are making improvements to add value before resale, then focusing on renovating kitchens and bathrooms is probably the smart move, he adds.
“Also, remember that non-compliant or non-consensual work adds no value and impacts potential buyers’ ability to obtain financing.”