The local housing market remains a hive of activity despite the recent interest rate hike. This is largely driven by an uptick in home loan approvals, a surge in first-time buyers and South Africans looking to semigrate.
But, with so many looking to sell their homes and capitalise on this activity, how can a seller make their home stand out in a crowded market while still getting their desired asking price?
The answer, says Sayo Folawiyo, chief executive and co-founder of Kandua.com, lies in strategic home upgrades.
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“The trick is to invest in strategic home improvements without overcapitalising. There are certain upgrades that – even if done on a budget – will greatly increase the value of your home and allow you to up your asking price.
“The more than 30 000 experts available on our platform have worked across more than 100 areas of home maintenance and improvement services. Their experience has given us unique insights into which upgrades translate into greater monetary value.”
Chief among these, he says, is in the kitchen, where sellers can expect to recoup between 60% and 120% of their investment.
“While your refurbished kitchen’s Return on Investment (ROI) is also reliant on the condition of the rest of the home, an open-plan, modern kitchen is a major selling point for prospective buyers. Here one should consider elements such as having enough space for appliances, the general functionality of the kitchen – such as a dishwasher that’s close to a sink, and attractive countertops.”
Following kitchens are bathrooms, where savvy upgraders can potentially add 3% to 4% to the total value of their home with a recently updated bathroom, according to The Property Centre, while also appealing to a bigger pool of buyers
“A lack of bathrooms and outdated bathrooms can be a big turn off for potential buyers. Consider ripping up the outdated bath-over-shower fixture and going for a clean, contemporary look. New taps, basins, tiles and/ or an updated vanity can make all the difference.”
Folawiyo adds that security features and improving comfortable and easy-to-maintain outdoor spaces pay off with local buyers.
“Another big selling point currently is solar power and electricity backup systems.”
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Upgrades without the upsides
On the flip side, there are some home ‘improvements’ that add very little monetary value to the home, or even worse, may put some buyers off entirely. These include:
– Swimming pools: Bond originator ooba Group found that the average increase to value in property from installing a pool is only 15% and that many prospective buyers would rather not carry the burden of pool maintenance costs.
“A pool pump uses significant amounts of electricity each month and must be run each day to keep the pool in good condition. With electricity prices being what they are and the average costs of installing a large pool at over R100 000 according to our estimates at Kandua.com, this is something to carefully consider,” Folawiyo says.
– Inconsistent high-end upgrades: Wine cellars and cinema rooms may appeal to some buyers, but these luxury upgrades aren’t to everyone’s tastes.
“These kinds of upgrades cost a lot of money and often don’t increase value substantially unless the rest of the house is similarly high-end.”
– DIY can be disastrous: Attempting ambitious home improvement projects like a kitchen or bathroom remodel without any expert training should be avoided.
“It’s often more cost-effective to use a qualified contractor from the start instead of having to pay someone extra to fix the DIY problems. Reality TV makes renovating look easy and fun but the results of a poorly executed renovation can be disastrous - plus most prospective buyers can spot amateur DIY from a mile away,” he says.