Renovations can transform a drab property into your dream home. But everyone’s dreams are different, and the jury is still out on how renovations affect your property value.
Before you start hacking away at your walls, it pays to consider the ways in which the works can affect the desirability of your property to prospective buyers, and to know how to use renovations to your advantage to boost your sale value.
How renovations affect resale value
The influence of renovations on resale value is highly variable. It is difficult to offer a specific estimate of how much it can boost or lower your property’s price.
But what is certain is that renovations do in many cases positively affect resale value.
OrangeTee agent Darren Ong says, “In a resale condominium transaction, we usually approach a banker for the bank’s indicative valuation, and often the banker will ask if the property is renovated or original, as they can request for higher valuation if it is renovated.”
“In HDB transactions, usually buyers are more willing to pay a bit of a premium for a fully renovated flat compared to a flat in its original condition.” he says.
But every buyer is different. Generally, younger buyers tend to want to customise the home to their own tastes and are thus less concerned with existing renovations than being able to redo the décor.
Source: Qanvast
ERA agent Tjhai Citanegara says, “In my experience, buyers aged between 26 to 32 tend to prioritise having a home of their own design and renovation. They go for original-condition houses as the price tag is lower compared to renovated houses and they can invest in their own renovation. Buyers beyond that age group tend to go for houses that are in move-in condition with minor works to be done.”
It’s also important to remember that the value of your renovations won’t last forever. As a general rule of thumb, recent, trendy renovations are more likely to boost property value than older, dated renovations, which could become a liability.
“If the renovation was done 10 to 15 years ago, likely it’s a liability rather than a feature of the house. Renovation style comes and goes, and with the bulk of the buyers belonging to the younger crowd, and any renovations above 10 years old would likely be deemed old-fashioned,” advises Propnex agent Justin Kwek.
Just bought a home and need help budgeting for renovations? For a rough estimate on renovation costs, you can use Qanvast’s free renovation calculator or meet with IDs to discuss your design ideas and get a quote.
Renovations that may boost your property’s resale value
1. Renovations only raise your selling price if potential buyers like them and want to keep them.
Danny Han, an agent at OrangeTee, has observed a positive correlation between renovations and property value in many cases, but cautions that this is subject to how much the buyers like the appearance of the home.
“If the house is nicely renovated, it gives the buyer a very good first impression. This feel-good impression will improve the chance of selling the house, as opposed to a house that is in original condition,” he says.
If your renovations are done in really good taste, they might even push a buyer to pick your property over others.
Mr Han says, “I was serving a couple whom I took to view a beautifully renovated condo one weekend. They made an offer on the same day. There were two other parties who made an offer for the unit, but my buyers loved it so much that they upped their offer to $38,000 above the asking price, which was a new record for that project.”
2. Simple renovations seem to be a hit with buyers.
Mr Kwek recommends going for low-key, neutral-looking renovations rather than bold, polarising looks.
Source: Qanvast
“If it’s done in a neutral theme with few built-in items like feature walls or cabinets, it would be easier to sell and at a higher price,” he says.
What’s the safest bet?
“Minimalist for sure,” says Mr Kwek. “Fewer built-in items means more room for design creativity and less hacking on the buyer’s side.”
Renovations that are potential buyer turn-offs
1. Bold and atypical designs
Mr Kwek warns, “If the renovation is highly personalised with design and color that caters mainly to the tastes of the seller, it is likely to pull prices down or have a hard time finding a buyer.”
Bright colours might express your vibrant personality, but they’re a bad idea when selling your home.
“Walls that are Purple, green or any color that’s strong in nature would create a bad first impression. What we want the buyer to remember when they leave the unit is how bright and spacious it was, and not because it has a colour that doesn’t sit well with them,” says Mr Kwek.
2. Knocking down walls to merge rooms
“While it makes the room much bigger, usually it is more disadvantageous than advantageous. When a buyer wants to buy a house with three bedrooms, it is because they need three bedrooms. One room short means more renovation needed. A bedroom-turned-walk-in-wardrobe looks nice but may not be practical,” says Mr Han.
3. Open kitchens
The same goes for open-concept kitchens which, while very trendy right now, might be impractical for buyers who intend to do lots of heavy cooking.
Source: Qanvast
4. Built-in carpentry
Built-in carpentry might enable you to customise your furniture, but it’s not always a great idea when it comes time to sell the home.
“Too much built-in carpentry work like study tables, cabinets or beds is sometimes not desirable. If there are built-in cabinets, make sure they are in impeccable condition. The style may not suit the taste of the buyer. Or they might be too old to keep. To remove them may damage flooring which the buyer intends to keep,” cautions Mr Han.
5. Wallpapers
Wallpaper is another no-no, as it is too much of a hassle to remove and can be an overkill visually.
Conclusion: Renovations are very subjective
The beauty of your renovations is in the eye of the beholder. As appealing to the highest possible number of buyers is likely to boost your selling price, it’s a good idea to opt for renovations that will appeal to the masses—minimalist with lots of white.
Source: Qanvast
Remember that renovations generally don’t age well. Popular designs are highly seasonal, and older renovations that are no longer trendy can become a liability.
Highly personalised renovations may also lower your asking price as buyers might want to get rid of them. After all, if you renovated your home to express your unique personality, it’s not unreasonable to assume that buyers will want to do the same.
Most of the agents surveyed said that buyers tend to inspect flooring, the kitchen and bathrooms during property viewing sessions, as these are the most expensive areas to overhaul. That being said, it’s more about functionality than aesthetics.
Source: Qanvast
According to Mr Cintanegara, the bathroom and kitchen tend to be areas that many of his clients wish to overhaul, so instead of obsessing about the design, it would be more worthwhile to ensure these areas are in good condition and that all stains, water leaks and unevenness are removed.
So, inspect carpentry below the washing areas, check the ceiling for leaks, test the water pressure of the taps and hope for the best.
Bonus: 4 tips for sellers looking to sell their place
Declutter – Remove unwanted items and anything that looks worn out or broken. Buyers tend to prefer a minimalist, bright and airy look that’s free of clutter.
Repaint – A fresh coat of paint can instantly make your home look fresher and newer.
Replace damaged flooring – Prospective buyers tend to inspect flooring for damage and unevenness. If yours is heavily damaged, you can opt for more affordable materials like laminate or vinyl.
Bleach and wash toilet – A soiled toilet is an instant turn-off, so bleach and wash it before viewing sessions.
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