Most homeowners plan to sell their property invest in expensive renovations with the aim to increase their home sales value. However, some of these improvements can have reverse effects that could damage a property’s market value if it is not properly executed or researched even if you have properties that fetch good pricing like housing development board unit (HDB) in Toa Payoh or private condominium in Orchard area.
Home renovations are costly investment that should not be taken lightly whether they are done to reflect homeowner’s personal preference or trendy interior designs. What we are about to share are the common renovation mistakes homeowners often committed.
1. Forcing your vision on how the property should look like
There are many homeowners overcapitalize their renovations as they focus on making the property look like how they want it, instead of appealing to the target buyers or tenants. It is not advisable to invest in real estate that is where you would want to live but rather where the numbers and profits make the most sense.
2. Focusing solely in kitchen and bathroom reservations
Kitchen and bathroom area are most popular for renovations but those are not the best places to renovate. While many assume that kitchen and bathroom area are usually linked to hygiene and needed to be renovate for hygienic looks that is appealing to their potential buyers or tenants. You can renovate the room by adding walk in wardrobe or replace the house lighting, you will be surprise the number of chances that potential buyers or tenant want to take the house. It is highly recommended that to check out those alternatives that offer great returns on home value.
3. Renovations leading to property overpricing
Homeowners should consult with their real estate agent to ensure that the plans they have for renovations do not price them out of neighbourhood or similar properties. In other words, granite is hot for counter surfaces in the kitchen, but if the neighbourhood or similar properties upgraded laminate at most, installing granite may provide the homeowner no return on investment in the future.
4. Not choosing for universally appreciated investments
If you think that all investments in a home is equivalent to the same amount of increased value, well, you are wrong. Focusing on value added that is universally appreciated like the kitchens, baths and master suites, are the best way to get return on your home improvement investment.
5. Not knowing when to stop upgrading
Most home owners often thought that they will need to upgrade all things. However, the key is to find those 20% upgrades that will add 80% of the value to the property. Here’s a tip, most of these renovation or upgrades will be cosmetic and much cheaper than expected.
6. Not considering to hire a professional interior designer
When people don’t spend the extra money to hire a professional interior designer and end up spending money on things that do not fully add value - the biggest mistake, this results the distasteful to most potential buyers. If you have the intention to add water feature or swimming pool in your landed house, we suggest you to drop that idea. Not many home owners want to bear the responsibility of maintaining or upkeep the pool or water feature.
7. Overspending on expensive add-on enhancements
If you are considering to over leveraging homes using equity lines of credit to construct add-on enhancements such as extensive additional landscaping or interior false columns because that often only add the incremental value but it could be costly with great deal up front and sometimes continue to add significantly to their annual maintenance which eventually draining every liquidity that is available.
8. Failing to complete work before refinancing
There could be cases where home owners begin their renovation project and run out of cash midway through which later they need to cash-out refinance to finish it. Often, the idea is to do all the work and refinance with higher appraisal amount. With tight follow through on the renovation plan and budget, the entire project can be completed before refinancing.
9. Overspend on materials and underspend on craftsmanship
Home owners who have little experience often choose expensive materials with the mindset that it will translate to higher property value and realise the craftsmanship looking cheap. With poor craftsmanship, it can ruin the value of even the best materials. On the other hand, if the skills of craftsmanship is top notch, the budget-friendly materials can look expensive too.