How to invest in your home to make money
Your home is the most expensive asset you will ever own. Chances are, you worked hard to afford a nice home and took the guidance that investing in bricks and mortar isn’t just beneficial to renting your home forever but is a sound investment.
Although the housing market is on fire for 2021, house prices have risen by around 10%. Some areas see the average house price rise by £24,000; the demand is far outstripping the supply thanks to recent government initiatives to help people get a foot on the property ladder.
While shared equity and 95% mortgages are proving popular with UK buyers, you have to ask, is this sustainable and are people facing a future of negative equity once this property boom is over and the housing market crashes? Time will tell.
But if you have already bought your property and are looking to invest your money, have you considered investing in your own home? If not, then why?
There is a wealth of home improvements you can do that will add real value upon resale, if this isn’t going to be your forever home. If you fancy taking your chances on a hot property market by selling; then, some well-executed home improvements will provide you with a substantial ROI when you do sell.
Boost your kerb appeal
What does your house say to you from the outside? Many people quite rightly focus much of their refurbishment efforts on the interior, but improving the exterior of your home could increase the value by 1-2%. Think:
- Repointing brickwork
- Checking or replacing guttering
- New windows and front door
- New pathway
- Rebuilding or repairing fences and walls around your home
- Adding a driveway if possible
Build a kitchen extension
As a country, Brits are obsessed with kitchens. Much like talking about the weather, we have a penchant for redesigning our kitchens and creating a welcoming and inviting home hub. Creating an open-plan kitchen-diner that flows seamlessly into the garden thanks to sliding or bi-fold doors is a current trend many people are jumping on board with.
Shaker style kitchens featuring deep, rich greens and blues are popular with homeowners as it cleverly utilises space to give a seamless look. Monochrome kitchens give a sleek modern design and feature colourful splashbacks or units on kitchen islands. Granite worktops are also popular and can provide a sleek and stylish finish to kitchens, check out Granite Transformations to discover your options when choosing granite for your new kitchen.
In some cases, a well thought out single-storey kitchen extension can often add more value than a loft conversion, and planners agree that this type of remodelling is usually within the realms of permitted developments. Figures wise, an investment of around £45,000 can see around 15% added to the value of your home. Being able to extend or redesign your kitchen will always be a hit with buyers. Plus, you get to enjoy it if you don’t sell.
Install a new bathroom
Be honest, how many times have you gone into someone else’s home and secretly judged their bathroom or took inspiration. Most people have at one time or another whether they meant to or not. If you are planning on selling, bathrooms can play a big part in how well potential buyers receive your home. If not, it can provide a luxurious space to relax in.
The average cost of a full new bathroom suite is around £6,500; however, depending on the products you buy, the finish you go for, options you choose, i.e. wet room instead of a bath, separate freestanding bath and shower cubicle etc., this can vary.
If making home investments is on the cards for you and you want to know where best to put your money to maximise your investment, a bathroom is a solid bet with an increase in the resale value of around 2-3%.
If you were to relocate your bathroom or increase the size, this could be more like an 8% increase in the value of your home. If you are extending your kitchen and have planning permission for a two-storey extension, you can use this added space to relocate and configure the bathroom. Of course, this requires a heavier investment, but it is easily recouped when you do sell, especially if you are taking advantage of the booming house market right now.
Add a loft or cellar conversion
Building up or renovating down is another option that can add extra space to your house and increase the value. A good way to identify if permission is likely to be granted for work of this kind is to check out what neighbours have already had done. This will increase the chances of any plans you submit being accepted, especially for loft conversions.
A loft conversion, depending on what type you choose, can add up to 15% to the value of your home. Smaller loft conversions that include utilising the space you already have and adding an extra room and a window light will generally be cheaper and come in at around £15,000 to £35,000. In sought after areas, this type of investment can increase the home’s value by 30%.
Consider where you are and your property type before going ahead. Some loft conversions don’t make any sense, while homes in popular areas will always be more attractive with extra rooms and conversions already completed.
A cellar, meanwhile, can add anywhere up to 30%, but this type of renovation is a big task depending on your home. Typically the cost of a cellar conversion is upwards of £1,00 per square meter, and any work carried out could be subject to planning permissions. However, generally, this is covered in your home’s permitted development rights. But it is always worth checking.
Cellar conversions aren’t quite as popular in the UK, but in areas where space is at a premium, such as London, any way of increasing the size of your home will always help you sell your home for more.
How can you add value to your home?
When it comes to adding value to your home via home improvements, it is important to weigh up the costs involved in completing these works and assess why. If your sole aim is to increase the value of your home, then choosing a higher level of finish will help you achieve the maximum value possible when you do sell.
Photo by Jimmy Dean