Now is the ‘perfect’ time to renovate
Historically low interest rates are creating the ideal environment for investors to add value to their properties.
Wealth coach Zaki Ameer, founder of Dream Design Property, says with property prices rising but holding costs low, the climate is right for investors to renovate – as long as they are adding value where it matters, he says.
“The most important things to renovate if you’re looking to improve value are the things you most notice. Imagine you’re looking to buy a new house or take up a tenancy in one. What would you notice on first inspection? These are the things you should consider renovating. Inside the house, this is normally the kitchen, bathroom and floors. Internal painting is also important,” Mr Ameer said.
In the current market, Mr Ameer said investors could benefit from carrying out similar projects in multiple properties.
“Always doing the same set of renovations on each house you purchase means you don’t have to rethink anything the next time you buy a property,” he said.
“Whenever I purchase a property under $400,000, I always stick to my same ‘trademark’ look and feel. For the outside, I normally stick to the same sort of colour scheme. For the interior I stick to similar kitchen designs and bathroom tiles.”
Investors who use this approach, he says, can also reuse leftover materials on their next renovation project.
Despite the favourable conditions in today’s market, Mr Ameer warns investors not to get carried away with value-adding projects.
“Just because you can renovate a property doesn't mean you should. There are certain circumstances where I recommend you don't renovate. Attempting to renovate under some conditions would cause you to spend money for little gain and possibly even a loss,” he warned.
“For example, I recommend you don’t spend money on renovations if you bought a property that is already in relatively good condition for under market value. If you negotiated very well or, for whatever other reason, got an exceptional price under market value, then there is no need to renovate. Yes, it might not be brand new and the kitchen might be 10 years old – but by putting in a new kitchen, you wouldn't necessarily increase the value of the property.
“Bottom line is, if the property is in relatively good nick, don’t renovate.”