Making money by renovating your property

You may be keen to buy a property you can renovate or do up, thinking it’s a good way to make money.It’s true that one of the joys of owning a home is making it your own. But it’s not always true that you’ll get your money back when you sell. You need to be careful not to overcapitalize (spend more on a home than it’s worth).

Anything you plan to do should be in keeping with the value of the home and the location. If you think you’ll want to do big alterations, talk with a valuer first.

Some things that can add value

• redecorating that makes a home feel lighter, more spacious and cleaner

• work that cuts down on maintenance

• improving kitchens and bathrooms

• extra living space and indoor-outdoor flow

• easy-care, attractive gardens

• simple fittings like heated towel rails

• better lighting and skylights.

Some things that may not

• renovations that are out of character with the home and neighbourhood

• anything that takes something away, such as turning 3 bedrooms into 2, or making a garage into a games room

• adding unusual features or things most people don’t want

• turning your home into the most expensive one in the neighbourhood.

Why buy the worst house in the best street?

Being in a good area rubs off on the value of your house and you may make a gain by improving your property to match others in the area. But you need to be realistic. If you won’t have the time or money to renovate, it may be better to look for a place that doesn’t need much work.