Careful planning and consideration need to be given to the area where the investment is located, as well as the selling price parameters in the locale, the upgrades needed and to what level, extent and quality these should be to increase the property’s value without the risk of overcapitalising.
Renovating for profit includes fixing superficial defects such as damp walls, plaster cracks, painting and varnishing stair banisters and handrails, internal and external painting, and electrical, air-conditioning and plumbing services. These basic, cost-effective enhancements could improve property appeal, desirability, resale value and time on the market.
From the ValuStrat database, we have been able to gleam the type of upgrades mostly affected by property owners to improve their living standards or in preparation for resale. These cost-effective upgrades appear to meet buyer expectations and, at the same time, satisfy the sellers’ profit expectation. Here are the most popular refurbishment undertakings.
Kitchen and bathroom
Our reports show that owners are most likely to invest in kitchen and bathroom upgrades for property 10-15 years old or more. These are now considered priority for refurbishment and value enhancement.
The modifications often encountered include the installation of better-quality material for kitchen cup-boards and working surfaces, and improved layout, workflow, design and functionality. There is also a preference for fitted and concealed quality appliances.
Kitchens have been structurally extended at times and the internal layout reconfigured to separate work stations such as scullery, laundry, storage and utility rooms from cooking and food presentation areas. Kitchens that have been remodelled would feature better planning in terms of storage space, drawers, workflow and optimum use of corner space.
The modifications affected to outdated bathrooms include the upgrade of basic sanitary ware and tiling. Modern fixtures and water-efficient fittings are used, including better-quality taps and basins, off-the-floor water closet installations and solar-powered water heaters.
Lighting in the kitchen and other internal and external areas are converted to energy-saving ones, while the bathrooms are reworked to include recessed downlights, as well as concealed behind-the-mirror lighting.
Floor covering
In a number of upgrades to the flooring in both apartments and villas, our surveyors have reported that laminated timber strip flooring has replaced carpets and ceramic tiles, especially in the heavily trafficked living-room areas and bedrooms as it is found to be aesthetically more appealing, easy to clean and considered a good selling feature.
Bedroom, bathroom, pool
Increasing build size or remodelling the existing configuration to include an additional bedroom or bathroom will increase value, marketability and saleability, especially for families or extended families. We have encountered a number of refurbishments whereby the maid’s room and laundry room have been effectively converted into a guest bedroom with en-suite bathroom.
Our database indicates that homes with swimming pools in the UAE fetch better values, mainly validated by the lifestyle, health, fitness and social benefits of having a pool.
Buying the adjacent plot
Plottage can increase the value of a property if the adjacent area allows for further extension of the primary residence or serving the dominant site by increasing the garden or landscaped area, or providing additional parking, especially in a high-built environments.
Landscaping
According to our surveyor inspections, the most popular upgrades include patios and decks, irrigation systems, swimming pools, water features, gazebos and catering stations, often integrating with the house design. The softscaping also includes brick paved pathways, flowerbeds and energy-saving garden lighting.
In our observation of exterior improvements, some of the popularly ones include attractive boundary walls and decorative wrought iron gates incorporating wall-mounted lighting. Based on our finding, driveways are now extensively brick paved and well lit. As the garage is often the first approach to the house, we find that having modern electronic garage doors is fast trending as a way to enhance curb appeal.
Some advice would be to consider the proposed renovation cost carefully and weighed against the anticipated profit. Overdoing the refurbishment would risk making the property undesirable and overpriced, making it much more difficult to sell. Buyers who can afford more expensive homes will turn to other areas where this type of investment is more in line with neighbouring properties.
It should be remembered that the market will always place a premium on tasteful cosmetic improvements, but one should be cautious of overcapitalising and putting a bold personal stamp on a home, as your style and taste may not always match that of a potential buyer.
It is also important to note that a no-objection certificate/consent should be obtained from the concerned authority or developer prior to undertaking any refurbishment. This will allow the improvements to be itemised, approved and legalised. Not only is this a legal requirement, it is also essential for any financial institution that might be looking to secure a mortgage over the property for a prospective buyer.
