Renovations offer a great way to make your home more comfortable and add value. But renovating your house costs money, and not everybody has unlimited funds to splurge on home renovations. If you happen to be in a similar situation, it could help to focus on revisiting small areas in your house rather than undertaking a complete design overhaul. You may also want to prioritise sprucing up spots in your home that are likely to give you the maximum return on your investment – think minor upgrades and potentially more value.
Renovation ideas that could help boost your home’s value
Before undertaking a renovation project, it’s important to check that the house is free of structural defects. If your house has any underlying structural issues, such as damp sub-floors, mould, termites, or roof leaks, you may want to consider fixing these issues before looking at other aspects of the house. Homes with structural defects lose value over time, and there’s no point in spending money on other upgrades when the basic upkeep of the house isn’t proper.
Once you have any major problems out of the way, you can think of areas to improve in the house to add to its value.
- Improve the bathrooms
Many people consider their bathroom to be a personal sanctuary, requiring a mix of aesthetics and functionality. Overall, a bathroom must be clean and airy, with adequate storage and some level of serenity. But upgrading a bathroom can be expensive though it doesn’t have to be. If your plumbing is fine, which can be a significant cost if it needs fixing, you can look at little upgrades to change how your bathroom looks and functions.
If you’re on a tight budget, start with thoroughly cleaning the space, as a dirty bathroom can be pretty off-putting. Clean the grouting, remove any rust, and, if possible, replace broken tiles and vanities. If you have more room in your budget, you could look at retiling, replacing old cabinets, and changing the showerheads and taps. If possible, opt for eco-friendly, water-saving shower heads that will help you use less water.
If you feel your bathroom looks congested, changing the lighting or adding strategically placed mirrors can give an illusion of space and airiness.
- Upgrade the kitchen
The kitchen is often considered the heart of a home. Unsurprisingly, tenants and buyers pay a lot of attention to the kitchen before deciding on a house. Whether you want to add to your home’s value or simply upgrade your personal comfort, a well-designed kitchen with modern equipment is everybody’s dream and requirement.
Depending on your budget, you may opt for a completely new kitchen by knocking down a couple of walls. An open-plan kitchen looks trendy and gives your home a modern look. However, if you can’t afford to spend too much, consider cosmetic changes, like painting the cabinetry, including some intelligent storage solutions, and replacing worn-out cupboard handles and knobs. You could also replace the benchtop or use a granite countertop overlay for an inexpensive upgrade.
- Clean up the exteriors
First impressions count. Sprucing up the exterior of your house helps make a good impression on potential buyers and tenants, even before they step inside to see the interiors.
Some simple things you can do to improve your home’s curb appeal include painting the exteriors, replacing broken tiles or fixing cracked pavements, and changing your main door if needed. If you can’t paint the house, consider giving a fresh lick of paint on the façade at least. You should also pressure-wash the pathways to remove dirt and slime. If you have a garden, trim the grass and overgrown bushes to create a tidy space.
- Consider adding a home office
If you have an additional room in the house, you may want to redecorate it to create a home office or study. As working from home gets more popular, having a dedicated space to work in the house can be a worthy addition for potential buyers. The room can be set up to be used as a study or a home office with some additional storage space for utility.
If you have a lawn, you might even think of building a granny flat, which could be rented out or used as a home office. If you’re toying with the idea of building a granny flat, speak to a mortgage broker to find out about different financing options to determine how much money you can spend before you move forward with the plan.
- Look for ways to make your house energy-efficient
Making your house energy efficient has multiple advantages. An energy-efficient house helps you cut down your energy consumption, which is good for the environment and your pocket, too. Energy-efficient homes are comfortable to live in without paying hefty energy bills. Such properties often also fetch higher prices in the market.
But how do you make your house energy efficient?
For minor upgrades, consider switching to appliances with higher energy ratings. While these appliances might be more expensive to buy, you’ll recover the additional costs by saving money on energy bills. Even tiny changes like switching to water-saving showerheads and using LED lights in your house instead of fluorescent tubes can help.
If you can afford to spend more time and money, you may want to consider installing solar panels to generate your own electricity. However, installing a solar panel isn’t cheap. You might have to look for financing options, such as a green loan, or even a personal loan, to fund the purchase.
Financing your renovation projects
You may prefer using your savings to fund your renovation project, but it might not be enough. The other options include:
- Using your credit card.
- Taking out a personal loan.
- Cashing out the equity in your home.
A credit card might be a convenient option for small expenses, but be careful not to overspend. You only get about 30 interest-free days on a credit card, and if you can’t pay your bill in time, you’ll be slapped with high interest rate charges.
Personal loans can give you a few years to pay off your debt, but you generally need a high credit score to qualify for one. Personal loans might also be more expensive than home loans in terms of the interest rate charged.
The third option, using your home equity, allows you to borrow money against your equity (or ownership share) in the house to pay for your renovation project. It is potentially one of the cheapest ways to finance your renovation projects due to the low interest rate charged on home loans.
Equity refers to the current value of your property minus the outstanding debt against it. Most lenders allow you to use a percentage of this equity to pay for personal expenses, such as renovating your house or even buying an investment property.
You can access your home equity in several ways. You can approach your lender for a loan top-up or refinance your loan with another lender if you find a more competitive deal. You can also take out a home equity loan, which works like a second loan on the property, to access your home equity.
Irrespective of how you decide to use your equity, it’s worth remembering that you won’t be allowed to use the entire equity you’ve built in the house. Most lenders require you to retain at least 20% equity in the home to reduce their risk. You can calculate your available equity by subtracting your outstanding mortgage debt from 80% of the property’s value. You could also speak with a mortgage broker to learn more about your usable equity and how you can unlock it. Depending on the scope of your renovation project, you may also be eligible for a construction loan, and a mortgage broker can guide you to the right type of home loan for your needs.
