Overcapitalising: What it is and how to avoid it – Part 2

Some areas where home improvements can make a big difference include:

  • new curtains or blinds
  • a fresh coat of paint inside and out
  • updating light fittings with modern fixtures
  • renovating an old kitchen or bathroom
  • refinishing floors and replacing carpets
  • adding a carport or garage.

When it comes to renovations, the key is to increase the kerb appeal without exceeding your budget. Consider your neighbourhood and the types of features that buyers or renters are likely to be looking for, and be willing to set your personal preferences aside. While you may enjoy having a beautifully landscaped yard or pool, the next person living in the house may not. In other words, it pays to be practical. A good rule of thumb In general terms, you’ll probably avoid overcapitalising if you keep the cost of your renovations to less than 10% of the value of your home. The less you need to invest in your home to give it that wow factor, the more you can expect to get back when it’s time to sell. And always keep a close eye on the sale price of similar properties in your area. With many people continuing to depend on property investments to meet their financial goals, it’s important to make sure you have the right information and tools on your side. Talk to your Gail or Terry about how to unlock the full potential of your home or investment property with a renovation.