Many properties across New Zealand have been increasing in value naturally over time. This is great news for homeowners who may plan to sell one day. But if you’re looking for a way to increase the property value now, renovations are perhaps the best way to do so quickly. If you’re a landlord, remodelling can work two-fold; you can have happier tenants and also charge a higher amount for rent.
However, not all remodelling is equal. And the cost that you put in doesn’t necessarily translate to the value you get out of it. We’ll cover some of the best value remodels to increase property value and to help better the experience of tenants–as well as a few of the worst.
While not as glamorous as a kitchen or bathroom remodel, adding or improving insulation can be a significant boost in home value and also be a boon for tenants at the same time. Adding insulation is the best way to combat the cold and see a return on investment, with an NZ study claiming that every dollar spent on insulation will bring a return of 5-7 dollars over time.
For tenants, insulation is more effective than a heat pump alone, and since it requires no power to use, it can greatly lower energy bills. Insulation on average saves several hundred dollars on energy bills alone, with some high-energy users seeing savings closer to $1000 per year.
The kitchen is the focal point of many homes. Old kitchens with outdated appliances, countertops, and cabinetry can make an entire home feel dated and obsolete. Kitchen remodelling can be expensive, but it can greatly refresh a property. Tenants are also more accepting of higher rents with a new kitchen, as the home as a whole feels more liveable and valuable.
If you’re planning to sell the home, it’s not uncommon for a kitchen remodel that costs $20-30k to add double that to the value to the property. Using modern, updated appliances, and fresh countertops can help increase this value even more. It also makes the home more appealing to a wider range of buyers!
Upgrading a bathroom can be a delicate one when it comes to getting a high return. Costs can easily go into the 10s of thousands, and it’s important to choose the right upgrades when you’re aiming for property value. Moving the tub, for instance, can be costly. Upgrading it or replacing it with a stall shower is less. It’s not uncommon to get twice as much money back on the sale of your property when you invest in a smart bathroom remodel.
Tenants are equally happy about getting a bathroom remodel. A few faucet changes and an old showerhead upgrade can do wonders for renter satisfaction!
Worst remodells for property value
Some renovations might be good for you personally, but don’t have a very high return on spend, and would take decades to get back from renting alone. Some of these include:
- Adding an upscale master suite — Adding on a whole new room is typically expensive, with a high end master suite sometimes going for over a hundred thousand dollars. Only about half of that will be added back into the value of the home.
- Upscale remodells — In general, upscale models are more for long-term occupants than for resale value. Higher end fixtures and designer models can look and work fantastic, but there’s eventually a point where the return won’t match the expense. Aim for more of a small or mid-range remodel for maximum return.
- Speciality room additions — Rooms like bars, sunrooms, music rooms can be great if you get the right party involved, but a typical buyer might not be interested. Because of the speciality factor, these tend to not increase the home value by as much as rooms that everyone uses, like bedrooms and bathrooms.
Choose Nexus for home upgrades or remodels
Our experienced team at Nexus can do all sorts of general maintenance and rental upgrades. From basic repairs to whole room remodels, we can do it all. If you’re looking for a local crew to upgrade your property, give us a ring or contact us through our website today.