Day: February 10, 2021

Why Renovating Your Bathroom Can Boost Home Value

The bathroom is one of the most profitable rooms to renovate. However, it can be a huge undertaking, costing unprepared investors thousands of dollars. With potential returns of $4 for every $1 spent, to make the most of this room it’s crucial not to overcapitalise.

Yet, as one of the most expensive renovation projects of a property, those on a budget need to spend strategically to see the return.

The bathroom is one of the most profitable rooms to renovate

Why the bathroom?

Second to the kitchen, the bathroom is the most profitable room to renovate in a property, and therefore should be on every investor’s list.

With potential returns of $4 for every $1 spent, to make the most of this room it’s crucial not to overcapitalise.

Yet, as one of the most expensive renovation projects of a property, those on a budget need to spend strategically to see the return.

While anything beyond a simple cosmetic renovation – which covers painting tiles, replacing the vanity and lighting, as well as new fittings – will cost a sum, budgeting carefully and making astute choices can still bring in a substantial profit.

Of a property’s total renovation budget, a decent portion needs to be dedicated to the bathroom alone.

As a guide allowing 10 to 20 per cent of the total renovation budget to the bathroom renovation would be a good starting point

For example you can complete a minor bathroom renovation including retiling, new shower screen, new vanity and a new toilet for around $3,000.

If it requires new flooring, tiles, a new bath or shower, then this could stretch up to $8,000, and so, where possible, investors will want to look into options that avoid replacing everything.

Examining the costs involved

To keep costs down and to pull the most from a renovation project, investors need to be looking carefully at their expenditure and expected return. This means having a specific budget.

A bathroom renovation, while it may be a third of the size of a kitchen, may cost the same as a kitchen. For this reason, it is doubly important to watch your outgoings.

When it comes to bathrooms, a good rule of thumb is 1.5 per cent of the property value. Generally, of this figure, 50 per cent is labour and 50 per cent is materials.

Unfortunately, there is little scope for DIY in a bathroom renovation but there are savings to be had. Some ways you can save money include the selection of materials and products, as well as strategic planning for the bathroom fit-out.

Keeping the items and fixtures in place may actually be the most effective option. For instance it may simply be a case of changing tap fittings and handles. You always want to be thinking about the result and whether you have added the wow value or not.

Doing it yourself

While the majority of bathroom labour is best done by a professional, many renovators do consider getting their hands dirty with a spot of tiling.

This can serve to reduce labour costs, but investors need to be honest with themselves about their abilities. If you don’t do a good job, you may actually reduce the value of the renovation.

The other factor to take into account is timing. A professional can usually complete an entire bathroom renovation within seven days. If you are learning as you go it may take much longer and this can affect the bottom line far more than many calculate.

What should you focus on?

Some items immediately curry favour with prospective tenants and buyers, helping to bring in more rent and profit.

One addition that generally adds value, provided the demographics are family orientated, is a bath.

Moreover, shiny surfaces have a higher perceived value than matt or satin surfaces, so you always want to make sure your wall tiles are shiny.

Water-efficient shower heads are also an absolute must, whether for a home or rental property.

Overall it is important to remain emotionally unattached if you are renovating a rental property. Too much time on minor details is a sure-fire way to overcapitalize.

Where to Buy – Country or City?

There’s no two ways about it, buying a house is a big decision. You can spend months compiling a list of all the things a potential home must have- the process really is that absorbing. Once you’ve locked down the features of the perfect house, then it’s time to think about location. At the end of the day, location can make or break a house. Location isn’t just what street the property is on, but also what suburb, in what part of the country.

When it comes to property location there is no one size fits all. So before deciding on a house, there are some considerations to make note of. Firstly there is the idea of money, how much would a like for like property cost in a country or city setting. Secondly, is the house a reasonable distance away from schools, work and the shops. Finally, consider what it is you want from the property. Once the goals of the investment are determined, you can go along way towards deciding if you would like to buy in the city or country.

Where Should You Buy?

Deciding whether to buy in a city or in the country might sound simple, but it’s not as straightforward as it may appear. Finding the right location can be a daunting prospect, and not just for first time investors.

One way to sort through the noise is to define the broader parametres for where you think you might like to invest. Choosing between a regional and metropolitan property strategy is one way to narrow your search.

Deciding between the two is an individual decision which will be based on the goals of your property investment strategy and the level of risk with which you are comfortable. However, deciding between the two will be all about the research.

People who have never lived in the country before can encounter pitfalls they never knew a property could have if they are not well prepared. If you’re considering a rural property, do your research. This is because there are risks to purchasing rural properties that simply don’t concern suburban or inner-city property buyers.

When looking at a rural property, asks questions. There may be some instances where a vendor is not legally obligated to disclose the aforementioned things about a property. So to combat this, be prepared to ask questions. If you are aware of any issues before you buy, you have all the information needed to make the best decision possible about buying a rural property.

It should be noted that investors of rural properties can reap huge rewards. House and land prices often cost much less for a lot more property than what house hunters in the city region would pay. Of course there is also the added bonus of enjoying life in the great outdoors when you buy in the country.

A Numbers Game

With 68.4 per cent of Australia’s population living in cities, investing in a metro area can be an easier bet. In capital cities, there are always a lot of people and therefore you will usually see a steady flow of tenants. The city’s more extensive employment opportunities are directly responsible for the greater demand for property in metropolitan areas. The more diverse the economy, the lower the investment risk.

However, city properties do have a pitfall- the fact that they are so expensive. The median house price in Sydney sits at $945,000. For example, an investor could buy a property in Lidcombe for exactly that amount. The property is unrenovated and features 2 bedrooms and 1 bathroom and is 16kms from the CBD.

In comparison, $950,000 can buy you a six bedroom, three bathroom property in Rosetta, Hobert. Located 12kms from the city’s centre, this property boasts panoramic views over the River Derwent.

At the end of the day, the fact remains that city properties are much more expensive than rural properties. So the decision between the two locations comes down to many factors. Firstly, what lifestyle do you want your property to allow for. Secondly, would you rather a bigger property in a rural location for less money, or a smaller property in a city location for a lot more money.

Knowing how far your money will get you in both city and rural locations is the first step to coming to terms with where you want to buy.

The Broad Differences

Buying in either a rural or city area is going to provide buyers with two distinct lifestyles. Rural property owners will notice how peaceful and slow paced life can be. There really will be time to stop and take in the vast surroundings of mother nature. Whereas city livers will notice that everything moves in a fast pace, there will always be some cafe to try, a show to see or a place to shop in.

Where you buy will determine the lifestyle you will have. In the city there will always be the noise of others. Be it sirens, the sound of traffic or just people living their lives. In a rural town, buyers will find that the majority of sounds come from the landscape, which in turn leads to a more peaceful feeling.

In the city of course there will be lots of access to just about anything one could think of. Entertainment venues, food stores and activities. While in the country residents may find themselves spending a lot of time in the car in order to access shopping precincts.