Windhoek
In tough economic times it might be wise to rather renovate your existing house than trying to sell to purchase something new and different. However, Brian Katjaerua, Head of FNB Home Loans, says: “There are a few realities that need to be taken into consideration when renovating. Not all renovations will automatically add to the value of your house, or if there is an increase in value, it may not necessarily cover the initial cost or hassle, so it is important to have a solid plan before you start out.”
Katjaerua gave some tips to consider before embarking on renovations.
He advises homeowners planning on renovating just to add financial value to understand the effect an additional investment will have on the value of the property.
“Homes are only worth the amount someone is prepared to pay for them,” said Katjaerua. “This means that although a renovation may lift the general value of your home, you may not realise the full value of what you have spent and end up overcapitalising.”
This is typical of luxury fittings such as imported floor tiles, crystal chandeliers or additions such as a lapa. For example, a new pool may cost N$50 000 to install, but only increase the value of your property by N$20 000. Or, buyers don’t see the value in a pool at all because of the extra cost and maintenance.
“If you are renovating purely to add value to your property, rather look at improvements that will increase overall appeal and marketability as opposed to actual dollar value,” Katjaerua advised.
If the decision to renovate is based on improving your lifestyle, then it is a different type of investment. “Homes are special places and if you are planning on living in a space for a while, then renovating cannot be counted in terms of increase in value in the house, but rather how much enjoyment you will derive from the changes,” said Katjaerua. “In this case, if you have small children, the hours spent playing in an installed pool outweighs the investment.”
“Budgeting for renovations is the key,” said Katjaerua. “There are many stories of renovations that go hugely over budget and take months to complete.” Before hiring anyone or buying anything, build a solid budget that not only consists of contractor and building material costs, but additional expenses such as rental costs if you are redoing your bedroom and need somewhere to stay, or eating out costs if renovating your kitchen.
Part of your planning stages should include an understanding of when you will need planning permission.
According to the Windhoek Municipality, every single alteration that includes a change to a structure will require planning permission before you start. “You may feel like you want to ‘chance it’ and not go the planning route, but this will cause big problems down the line,” Katjaerua says.
“You will not be able to sell your house without the required building plans, so an understanding of what permissions you require is critical. Renovating can be rewarding and add value to your home, if planned correctly.”