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Should I renovate my property to add value?

By Louise Morrin

If you buy property at the right time and in the right area – real estate in St George or Carlton, for instance – it should naturally appreciate in value over time. But what if you want to give its value an extra boost? That's when you might consider renovating your home. 

There's ongoing debate about whether or not renovating a home is the right idea or not. Here we lay out a few of the basic arguments for and against.

Pros

On the one hand, there's the fact that doing up your home and making improvements can give it a better resale value down the line. If you add a feature like a deck or pergola, or even something comparatively smaller like updating your bathroom or kitchen, buyers may end up paying a lot more for the property. 

In addition to this, sprucing up your property also means you might be able to raise your rent if you have tenants. Just make sure you keep your target market in mind when you carry out any work. Will the tenant or buyer you have in mind want that particular feature or redesign?

Cons

Of course, it's also important to be aware of the risks. For one, renovation costs can end up being expensive, moreso than you first budgeted for, and there's no guarantee how much they'll raise the property's value, if at all. You might end up selling that piece of real estate in Allawah and find the renovation is a sunk cost.

The process of renovations can also be disruptive. If you're an owner-occupier, the constant work might become a serious irritation, particularly if you work from home. Meanwhile, if it's a rental we're talking about, depending on the scale, it might mean you can't house tenants during that time. That could mean months of receiving no rental income. 

These are just a few of the issues you should consider before trying to renovate your home to add value. 

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