"How to Maximize Value: Avoiding Over Capitalisation in Home Extensions and Renovations"
- tony gronowski
- May 8, 2024
- 1 min read
When selling a property, buyers typically have limited time for inspections before they bid at an auction or make an offer. Consequently, they focus on key aspects such as the house's size and its state of renovation, or potential deal breakers like a small backyard or an unfavorable floor plan.
In planning renovations or extensions, it's advisable to avoid over-investment in features that don't increase value, such as high-end toilets, architraves, skirtings, lighting, and luxury tiles. Buyers assess the property's value based on comparable sales in the area, which likely have standard fittings, meaning you may not recoup the additional investment.
For home extensions or adding a second story, it's recommended to avoid alterations to the existing floor plan. Renovating these areas can be almost as costly as new construction. While adding square meters to your home can enhance its value, renovating existing rooms might not yield a return on investment that's equivalent to the expenditure.
Overall, adding a second storey addition or home extension in Sydney increases the valuable square meters of your home. When it comes time to sell, this can give you an advantage over other smaller and less valuable homes in the area that lack modern features such as walk-in robes and ensuites, for which buyers may be willing to pay a premium.