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Boosting a property’s worth with home improvement work is the Kiwi dream, but there are some renovation jobs that do not add resale value, experts say.
In recent years homeowners unable to travel have spent up large on renovations, with an estimated $2.4 billion paid for consented alterations and additions alone in 2021.
Rising interest rates and costs have led to a sharp pullback in renovations this year, tradie job platform Builderscrack says. Despite this, carrying out home improvements remains important to many Kiwis.
But not all renovation jobs are created equal, and while some improvements add value to a property, others do not.
Renovation expert Jen Jones, from Nine Yards Consulting, says this is only an issue if people are doing improvements and want to realise 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 get the benefit of the improvements, and gain value in that way.”
If homeowners do want a tangible return from an improvement, the question is not whether the work increases the property’s value, Bayleys head of insights Chris Farhi says.
“The question is actually whether the added value is higher than the cost of the work.”
With that in mind, here are five improvements that will not add resale value to a home.
Swimming pools
Many people dream of having a pool in the backyard in summer, but installing one is unlikely to reap financial rewards.
One reason is that many potential buyers are actually put off by the maintenance requirements, and safety issues, that come with pools.
Another is the expense involved, with upwards of $100,000 required to put one in, and ongoing maintenance costs. Farhi says once you account for the costs, pools become value neutral.
“Homes with pools generally have higher prices, but they also tend to have larger sections and be higher end. This probably explains the higher pricing around them.”
They are likely to add value for a subset of homes and buyers, specifically higher-end homes or buyers with kids of the right age, he says.
Garage conversions
Turning a garage into a spare bedroom or a home office might seem like an improvement that will pay off. But that is not the case, Jones says.
Garage conversions tend to be a shortcut to solving a space problem, and their locations are hardly ever optimal for what people want to do, she says.
“But the bigger issue is that most people want a safe place to park their car, and some storage space with it. That is considered valuable.
“Swapping it out for something else which many people don’t want takes away more than it adds, especially once you factor in the time and money required to do it.”
Fence replacements
Battered, worn fences surrounding a section are not a good look. But replacing fences that are simply shabby, or mismatched, will not earn back what they cost, nor will it generate extra value, Jones says.
“If you have a fence with three different sections, you are better off repainting the entire fence black and planting in front of it rather than spending $10,000 putting in an entirely new fence.
“The plants will grow up quickly, and within a short time you won’t even notice the fence.”
At the same time, it is a mistake to underrate the street appeal of a property, she says.
“The frontage does matter, because it suggests what people are coming into, and what the property is like.”
But less costly improvements such as repainting fences, decks and front doors; replanting, including lawns if necessary; and replacing outdoor lighting improve street appeal, and provide good returns.
Double-glazing
There are many benefits that come with putting in double-glazed windows, but increased profits at resale are not one of them.
Double-glazing makes for better insulation, lower energy bills, and reduced noise, and this leads to a better living experience, Jones says.
“But you could easily spend $50,000 or more, and while it might be worth spending to make your home more comfortable for yourself, buyers don’t look for it as a feature they will pay extra for.”
Since 2008, most new homes built require double-glazed windows, so many people now take the feature for granted.
Quirky interior design
Unusual paint choices, feature walls, and quirky wallpaper might suit a homeowner’s personality, but anything in this space which is not universally well-liked does not add resale value, Jones says.
“There is a reason that real estate agents tell people to paint everything white: it allows people to better visualise living in it.”
Farhi says eclectic design choices are hit-and-miss, and put off a lot of buyers. “If thinking solely from a value perspective, it is better to go with a neutral palette.”
If homeowners are undertaking improvements to add value prior to resale, then focusing on renovating kitchens and bathrooms is likely to be the smart move, he adds.
“Also, remember non-compliant, or unconsented, work does not add value, and it impacts on potential buyers’ ability to get finance.”
Written by Miriam Bell from Stuff.co.nz
