Numerous factors may prompt renovation, such as enhancing livability, boosting market value, and increasing rental income for investment properties. Wondering which renovations offer the best return on investment? Here are some ideas to inspire you.

The kitchen update

The kitchen typically serves as the heart of a property, experiencing frequent use, which makes kitchen updates a key driver of increased resale value. Consider enhancing your kitchen by creating an open-plan layout, incorporating islands or additional storage, and upgrading benchtops, splashbacks, cabinetry, and appliances.

While redesigning the entire kitchen layout might be appealing, moving plumbing or electrical fixtures can substantially raise expenses. Keeping existing cabinets and opting to replace or refinish doors can provide significant cost savings.

Cost guide: Anywhere from $10,000 to $45,000+.

The bathroom remodel

After the kitchen, bathrooms are perhaps the next most popular areas of the home to renovate. Buyers and tenants highly appreciate fresh, modern bathrooms, making it a worthwhile consideration for your renovation plans.

You can begin with simple upgrades such as replacing old grout and updating fixtures like taps, sinks, showerheads, and mirrors. For a greater investment, re-tiling or installing new baths and showers can yield long-term benefits. For a touch of luxury, think about adding heated towel bars and flooring.

Cost guide: Anywhere from $8,000 to $35,000.

The curb appeal boost

The first impression is crucial, especially when showcasing your property to potential buyers or tenants. Landscaping plays a pivotal role in enhancing curb appeal and increasing property value.

For investment properties, opting for low-maintenance plants is a wise decision. Additionally, consider adding lighting and updating fencing to create a striking visual impact that leaves a lasting impression.

Cost guide: It’s recommended to avoid spending more than 5% to 10% of the property’s value on landscaping.

Landscaping cost estimates can vary significantly, so it’s wise to gather multiple quotes from landscapers before making a decision.

The granny flat build

If space allows, building a granny flat can be a strategic way to enhance your property’s value and generate additional income. According to CoreLogic, adding a granny flat could potentially increase home values by up to 30% and boost rental income by approximately 27%.

Make sure to contact your local council to inquire about planning permissions and any other requirements. It’s also advisable to consult with your accountant regarding the tax implications.

Cost guide: The average cost to build a granny flat is $80,000 to $160,000.

The expansion

If your property permits, expanding the footprint of your home is a viable option to consider. When deciding to expand, typically you have two choices: extending outward or upward. Some homeowners are hesitant to add a second storey due to concerns that the costs might exceed those of a ground-floor extension.

To make an informed decision, you’ll need to carefully consider your budget, personal circumstances, the layout of your property, and the existing structure of your home to determine which option best fits your needs. It’s estimated that building up will cost about 30% more than building out, but could add between 30% to 60% to the value of your home. 

Cost guide: Roughly $1,850 to $3,000 per square metre depending on the degree of difficulty.

Like to explore your finance options?

If you’ve reduced your mortgage balance or your property’s value has appreciated, you might have the option to access equity to fund your renovation. Alternatively, we can discuss other available finance options that may be suitable for your situation.

Get in touch with your 1^st Street Mortgage Broker today.

* Costs and prices in this article are indicative and should only be used as a guide. They also vary locally and are subject to market forces.