Lifestyle

Fixer Upper - Rennovation Boost ROI

Fixer Upper - Rennovation Boost ROIMany investors, and more than a few young families, have taken a chance on what is casually referred to as a “fixer-upper.” You know the types: one of those moderately disastrous flats or houses that, with a little love and creativity, can be transformed into a gem of a modern home.

Assuming you’ve picked one up for a reasonable price and that it’s structurally sound — no foundational issues, floor and ceiling faults that are irreparable except for great cost, no pests or dangerous elements buried in the building at construction — fixer-uppers are a great way to considerable capital gains. (They can also be money pits, but that’s another story.) Conversely, if you’re selling your current home, get accredited inspectors in to make sure you’re not passing along faults that could come back to haunt you.

Whether an owner-occupier or an investor, chances are owners want to maximise the property’s value for future sales or attractive rents. In either case, as with the fixer-upper, an investor needs to have a clear goal in mind to make it work. “When the owner redesigns the flat to increase the sales value down the road, they will [need to] think about improvement of the existing condition via developing from space planning, lighting … and the purpose of renovation. So every time we meet [a] client, we will ask about details to plan the overall picture and show them the difference between long or short-term use,” remarks Lawrence Lau, creative director at LLS Design & Associates.

As is commonly the case with property, space is an issue in the SAR and if you can make more, better space than anyone else, the price could reflect that. “The best way to redesign the home to get more value from it: Make the space seem like it is bigger than what it already is and also maximise space efficiency. Keep the design simple, clean and light,” explains Hong Kong interior designer Monique McLintock. It’s not a shell game. Redesigning for maximum space is nearly standard practice, and can be done easily and relatively inexpensively. If you’re fortunate to have few structural walls, knock them down and open it up.

From contractors and real estate agents to designers and home publications, the list of ways to bump the value of a home is topped by bathroom and kitchen upgrades. “As a general rule, with new bathrooms and a new kitchen, new window treatments and a fresh coat of white paint throughout you can increase the value of a property by between 25 and 35 percent,” says Suzanne Watkinson, managing director of Macau boutique developer Ambiente, which specialises in redesigning old walk-ups. Tiny kitchens and purely functional bathrooms are falling out of favour, and the common consensus among interior designers is that clients are demanding better on both fronts. Just don’t get crazy: kitchens and bathrooms out of sync with the rest of the flat defeat the purpose. Similarly, vaguely tropical design is right for a villa in Clear Water Bay — not a 30th floor flat in Mongkok and no one buying there is looking for tropical.

Also taking more prominence on the redesign front: energy efficiency. Energy saving windows and lighting in particular help with a home’s value. A hint that running the household won’t break the bank because of inefficient air conditioners is a bonus for investors renting out flats.

Finally when it comes to showing off the flat, too much of the personal can get in the way. The idea is to show off its strong points, not how wonderful life is while in it. “Remove all surface clutter,” Watkinson states. Art, simple furniture, ambient lighting, and a couple of plants will make a flat feel liveable. “With these simple touches the value could even go up as much as 40 percent.” Consider it fixed.