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Friday, March 7, 2008

The rules of Renovating

People renovate homes for a myriad of reasons, but be aware that the end result could raise the value of your property or, actually make it harder to sell.

RENOVATING one’s home is something very personal and people do it for various reasons. Whatever your reason may be, renovations can enhance the value of your home. From basic touch-ups to expensive extensions, the different types of renovations done will affect the value of your home differently. Nonetheless, spending a huge sum of money does not necessarily mean that you will get the same returns when you put your property on the market. In fact, it may even be difficult to sell your property.

Several real estate agents PropertyPlus spoke to agree that before deciding on any renovations, it is important to work out a reasonable budget while keeping in mind the trends that would appeal to a wider market.

Teh: Don't go for unconventional renovations

“Keep things simple to appeal to a broader market and don’t go for unconventional renovations,” said Kayte Teh, principal of Pacific Alliance Realty. From Teh’s experience, a lot of buyers prefer doing their own renovations and would only consider buying a renovated property if it’s not too pricey. “Heavily renovated homes are always priced at a premium, but the market for it is small,” she stated.

Ng: Keep renovations, simple, nice and cozy

Alice Ng of Reapfield Properties (KL) Sdn Bhd agrees. “If you’re going to renovate, keep it simple, nice and cozy. Do not go for grand renovations, as it makes it difficult for the new owners to remodel or redecorate,” said Ng.

Andrew Ngiam, also from Reapfield Properties recommends the modern and contemporary look. “Renovations are quite personal, it depends on personal preference and taste, so renovate tastefully. If it looks like something you can pick out of an interior magazine, it would most probably sell,” he said.

Goh: Don't spend more than 50% of the cost of your home

When it comes to budget, the rule of thumb is not to spend more than 50% of the cost of your home on renovations, said William Goh, head of sales at Reapfield Properties (KL). “If you’re looking to renovate, make sure the cost is within your budget. Extensions are costly, but it will greatly affect the price; an increase in space translates to an increase in selling price.”

A renovated home could increase the value of the property by 10% to 20%, said Goh. “It can even increase by 30% to 40% if the renovations are properly done, with high quality finishes. The home should also be in very good condition,” he added.

Enhancing value
According to Teh, who has been in the industry for 15 years, some things that would enhance the
value of a home include wet and dry kitchens, spacious master bedrooms and living areas or a remodeled bathroom. “A well-designed garden helps too. A landscaped garden, koi pond, water features or perhaps a quiet area in the garden all significantly add value to a home,” she said.

Ngiam agrees. Having been in the business for eight years, he said the kitchen and bathroom are the most important areas of a home. “People are looking at modern kitchens and modern bathrooms. The modern and clean look is the trend now.”

The garden is very important as well, said Ngiam. While adding items, such as water features, ponds and fountains, enhances the aesthetic value of the home, it also lends a feng shui appeal; especially features with elements of flowing water.

Foo: Renovating a very old house is not recommended

Meanwhile, SM Foo of Oriental Realty does not recommend renovating an old house. “If the house is more than 30 years old, the design would be really outdated. Just a basic touch-up or simple refurbishment would do,” said Foo, who has been in the business for 13 years. It is not worth it to spend too much on renovations just to remodel an old house, unless there is enough capital for grand renovations, which would place the property in a premium market, he explained.

Extensions, especially to the back of the house, are very common, said Foo. “An extension of between five to eight feet to the back would cost approximately RM20,000,” he said, adding that
an extension could add to the value of the home about 40% of the cost.

Market feedback
From her experience, Teh said, it is difficult to sell renovated linked houses at a premium whereas bungalows sell better because the unit is larger and offers more space. “Buyers are willing to spend more if the cost is justified with space.

Nicely renovated homes are sellable of course, but it narrows down the market. In which case, you need to find the right buyer,” Teh shared. Although the market for premium, renovated homes is small, renovated mid-range and lowrange homes are more common compared to renovated bungalows, said Goh. “If a buyer is looking for a bungalow, he most likely wants to do his own renovations, and would have the capital to do so,” he added.

Goh, who has been in the industry for 20 years feels the target market for renovated mid-range and low-range homes are mostly first-time buyers such as young couples who do not have the capital to do their own renovations. “They prefer a unit in which they can just move in without having to spend too much.”

Renovated kitchens can add to the value of a property


The current trends in renovation, observed Teh, are Balinese and modern contemporary. “Many homes are sporting Balinese-inspired wood flooring and trimmings. The modern design is also hot right now, which is basically a really clean cut look featuring colours such as black and white or metallic,” she said.

“Spend on good quality built-ins with granite tops and have separate wet and dry areas in the kitchen. The kitchen should have a modern and classy feel,” advised Ngiam. “In the bathroom, rainshowers (a type of shower head attached to the ceiling) are the ‘in’ thing now,” he added.

Other features such as lighting and flooring also play a part in creating the look and feel of a home. “Downlights are really popular, and buyers generally don’t like fluorescent lighting, which can be too harsh,” said Ngiam. “Flooring depends on individual taste, but keep in mind if you decide to put in wood flooring, make sure it is of high quality. Expatriates also favour wood flooring, if you are planning to sell or rent to an expatriate,” he added.

Foo on the other hand recommends getting a designer. “You can tell when a home has been modelled by a designer; it makes a difference,” he said. Although it can be costly, it is worth it as properly renovated homes are definitely easier to sell as well as to rent.

Keeping cost down
If you’re strapped for cash, there are still ways to enhance the value of your home. “Finishings, a new coat of paint and built-ins add value to a home without having to spend too much,” said Goh.

“Refurbish your home to make it look nice, touching up parts that have gone through wear and tear. A change of flooring, especially if it is parquet, makes a difference. If you have wooden flooring that isn’t too old, a coat of varnish would do the trick,” he added.

According to Ng, basic touch-ups are adequate. “Fix any and all obvious problems; buyers are especially particular about watermarks, which lead them to think that there is a piping problem,” she advised. “Clean and tidy your home prior to viewings, to make it look spacious. First impressions are important,” she added.

“As a rule of thumb, make your house look nice and presentable,” said K Soma Sundram, president of Malaysian Institute of Estate Agents (MIEA).

Soma: Renovations are a personal choice

Leaky roofs, peeling paint, a rusting gate, cracks in the wall, watermarks, termite problems and a faulty toilet should be fixed. “Spend some money to make it look habitable,” advised Soma.

“One of the things we’re [estate agents] required to do is to make sure any property for sale is in habitable condition and free of repairs. Therefore, the seller should make the necessary repairs as new owners would be turned off by having to fork out more than the cost of the property,” he explained.

Although renovations — especially those done tastefully — definitely add value to a property, there are no set rules to follow. “Renovations are a personal choice; it is to meet the home owner’s needs and is ultimately for the home owner to live in and to enjoy,” he said.

By theSun - PropertyPlus - (by Yeong Ee-Wah)

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