If the bones of your home are solid, the kitchen and bathrooms are modern, or if your budget is tight, cosmetic renovations are the way to go. They’re cheaper, quicker, and you may be able to do the majority of them by yourself.
When we say cosmetic renovations, we’re talking about surface stuff that changes the look not the structure of your home. This includes:
If you do cosmetic renovations well, they can vastly improve the appeal of your home, increasing its value and attracting more buyers (if you were to ever sell). This is particularly true if your property is in good shape structurally, but looks a little rough around the edges.
Before starting on any major renovations, always consider if making cosmetic changes will suffice, as these are much cheaper and easier.
Costs can balloon out of control when making larger scale changes to your property.
If your home or investment has a mustard yellow kitchen fresh out of the 80s, or a backyard resembling a Bolivian jungle, cosmetic renovations alone might not cut it. Making comprehensive or expensive changes may be necessary, but to do so successfully you must approach your renovations with caution.
That’s because costs can balloon out of control when making larger changes to your property. To make sure this doesn’t happen, put an upper limit on your renovation spend and make sure you stick to it. Conventional wisdom says that 5 percent of your property’s value is a good amount to aim for.
Think about the people who are most likely to buy your home in future.
Before you rip out a single mustard yellow kitchen cabinet, think about the people who are most likely to buy your home in future. Even if you’re planning on living in the property for the foreseeable, these are the people who will decide its sale price when you eventually move on.
Consider what the typical resident of your suburb might value in a home. If you live in an affluent area occupied by families it may pay to undertake extensive premium renovations as the future buyers might pay more for a well-finished home.
On the other hand, if you live in an area primarily occupied by renters and owned by investors, cosmetic renovations could be the way to go.
By considering the end buyer, and what the market in your area wants, you can avoid some of the most common pitfalls of renovating, like over-capitalising or focusing on the wrong details. This will help ensure that your renovations add value to your home, instead of draining your bank account.
Well executed renovations can add to your enjoyment of your property, and increase its value in the future. However, if you don’t set a cost limit and have a comprehensive plan to make the renovations happen, it’s easy to go over budget without getting the results you want.
That’s why it’s best to consider the changes you want to make, the market you’re making them for, and your financial position before you begin. With a little caution and a lot of planning, you could improve every inch of your home, and line your pockets when you eventually sell.