For people growing their wealth through property as a buffer against currency depreciation and market volatility and uncertainty amidst a pandemic, renovation can offer a fast-track solution by adding significant value to a home as well as improving the resident’s quality of life.
However, not all upgrades are equal and the onset of Covid-19 hasn’t only impacted investment markets but it has also considerably changed people’s lifestyle needs and priorities for the foreseeable future, and it’s critical to take this into consideration in order to best capitalise on home renovations and upgrades, says Claude McKirby, co-Principal for Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs.
McKirby said that certain projects are simply not worth the cost or the inconvenience unless they are purely for personal comfort or lifestyle and you plan on staying in the property for more than a couple of years.
“The relationship we have with our living spaces has changed significantly since March last year and we have all had time to reflect and re-evaluate how we live in our homes.
“And, with the impact of the pandemic likely to last for years to come, the past year has also highlighted the importance of being more self-sufficient and creating a more multi-functional home.”
McKirby said that the two key factors to consider when it comes to renovations remain unchanged – to determine what would make your home as comfortable as possible for the immediate future and which upgrades make the most financial sense for resale value.
“Whilst there are a number of pre-pandemic features that remain at the top of prospective buyer’s wish lists, including open plan living areas, lots of natural light and energy-saving features, there are now also several trends which have emerged as a direct result of the pandemic.”
According to McKirby, the following renovations and upgrades are among those that are likely to have the best potential return on investment in the foreseeable future:
Create a home office – At the moment, lots of people are still working remotely but many companies have made a conscious shift to a work-from-home hybrid model that only requires employees to come into the office on certain days, so a comfortable home office now ranks high on the wish list of many buyers.
Spruce up the outdoor living area – After having spent the best part of a year at home, it’s no surprise that homeowners now look for more living, dining, entertaining, and recreational options within their own homes and, with outdoor spaces now more valued than ever, optimising functionality and appearance is a great way to add value for a future sale.
Update the kitchen – As the heart of most homes, kitchens have always been prominent rooms but Covid-19 has placed new emphasis on this room’s importance.
Re-purpose under-utilised spaces – Most homes have at least one area or room that seldom gets used and, with multiple family members at home much of the day in many households, it makes sense to optimise all your available space.
Smart features – More time spent at home has led to a greater desire for hi-tech features to facilitate everything from greener living to added amenities. Proper installation and a fully integrated suite of services can certainly add value, both now and in the future when it’s time to sell.
Health and sanitation – The pandemic has precipitated a greater concern about the transmission of illness and germs and along with this, an increase in demand for features like hands-free and touchless fittings and air purifiers. Bear in mind that the seemingly minor act of choosing a tap or lighting in the guest bathroom can make a difference now as well as in the future.
Things to look out for
Veteran architect and builder, Tom Smuts-Erasmus, chief executive of All Projects, cautions that there are a number of factors to consider before you decide on the scale of renovations to be undertaken – especially if you plan on doing more than giving your home a lick of paint:
Does the proposed renovation fall in line with local council planning laws?
How long do you plan to stay in your home?
Are you prepared to put up with living in a building site while your home is renovated?
Do you have the time and energy to supervise builders and contractors and the overall renovation plans?
“It’s also critical to safeguard against the most common pitfall, over capitalising and the best way to do so is to determine the current value of your home as well as property and pricing in your area as neighbourhoods will generally have a ceiling value, meaning a certain threshold buyers and renters are willing to pay,” he said,
Smuts-Erasmus said that the stress and inconvenience of home renovation is often exacerbated ten-fold when homeowners are not diligent in their choice of contractor and the project drags on or goes horribly wrong.
”Be sure to appoint a well-established firm with long-serving craftsmen, even if it costs a little more as a small, cheap, fly-by-night contractor will almost certainly end up not only costing more money at the end of the day, but also your sanity.
“Ask around and take recommendations from trusted acquaintances and always check the company’s previous customers’ finished work. Building contractors live and die by their reputations.”
Once you have done your homework, decided to go ahead with the renovation and have chosen a reputable contractor, do not ignore the one step which could completely derail your project – city council approval.
If you are merely changing the fittings or flooring surfaces, replacing bathroom fixtures or adding a few new cupboards then this final step is not necessary but all structural changes – including breaking through a wall to create open plan flow – can only commence once the City Council has approved the plans.
Smuts-Erasmus cautions home owners not to take the chance of building without council approval as it could end up being very costly and as well frustrating.
A stop order is issued on unauthorised building and work cannot commence until plan approval is attained. An inspector will check regularly that building is not continuing and if it is found to be in progress in spite of the stop order then a summons to appear in court will be issued.
“This could result in a fine or even an order to take down building work already done, not to mention that sellers will also run into problems down the line if their homes do not match the building plans that the council has on record,” Smuts-Erasmus said.
“Additionally, insurance claims for damages to – or that may result from – unapproved or non-compliant building work, such as leaking roofs, will probably be rejected by your insurer.
“And when the time comes to sell, unapproved alterations or plans that don’t match the existing structure can hold up or even sink a sale, because sellers have to disclose this before their house goes on the market.”
He said that they then have to have new plans drawn up and go through the lengthy council approvals process, which can be costly, especially non-compliant work has already been completed.
Source: https://businesstech.co.za/news/property/500099/the-home-renovations-which-will-give-the-best-return-on-investment-in-south-africa-right-now/