Ask anyone, and they’d say they would want to own a home with the interior design of their dreams – a beautifully designed kitchen, spacious living room, luxurious bathrooms: you know the works.
If you are an investor, you should ask yourself: will the renovation costs bring you higher returns? What other factors should be considered before renovating a home?
A common mistake investors make is spending too much on renovation. You may visualize the home in a certain way for photos or for others to view, but that could hurt your returns in the long run. So, before deciding to renovate your home, be sure to ask yourself these 5 questions:
Any design you choose will be part of the property investment. You need to consider whether investing in renovations will bring considerable returns.
It’s a known fact that renovating your home can be very costly. Therefore, you must first identify your budget and how much you are willing to spend on renovations, including additional costs such as building permits, capital costs, electricity and plumbing, etc.
Aesthetics and practicality are both important factors when choosing a home’s interior design. However, the comfort and usability of the home should complement its aesthetic value. Focusing too much on the aesthetics rather than the functionality of the home will bring unnecessary trouble in the future – not to mention become a costly problem.
Experienced investors will always think about their ROI (return on investment). They will ask questions such as, “if I spend RM200,000 on house renovations, how long will it take to get returns?” As a matter of fact, you can roughly calculate the future rental income based on the current property rent and the additional renovation costs.
Ask yourself, why do you want to renovate? Is it necessary or are you just looking to change the look of your home?
Suppose you spend RM18,000 to renovate the floor of the house, and the current monthly rent is RM2,000, and the renovated floor can only increase the rental yield up to 5% in the future. After that, you can increase the monthly rent to RM2,100, which is an increase of RM100. Therefore, it will take you 15 years to obtain all the renovation capital invested initially. Will it be a good investment?
Home improvement is an extremely important investment decision that requires careful thought and calculation. Therefore, it is necessary to do your research on budgeting in order to make the best decision.
IQI Concept is your choice for interior design! From professional advice to a variety of design options, save yourself the hassle and consult with IQI Concept to determine the best design for you!