Top tip: How to maximise the value of your home for optimal cost

Here's the first in a series of articles on renovating for  profit or lifestyle - or both.

We all want to get the "best bang for our buck" when we're improving our homes, and that's what we mean by maximising value for optimal cost.

Unfortunately, many of us are so hung up about over-capitalising that we actually end up spending too little. Yes, really. Optimal doesn't always mean "cheapest". The definition of "optimal" is "most favourable or beneficial given the circumstances".

Take a recent case where the owner of a reasonably upscale house replaced his old kitchen with an inexpensive one he'd purchased from one of the "big box" home improvement retailers. There was nothing wrong with the kitchen, but it just wasn't in keeping with the rest of the house. Potential buyers thought so too when the owner tried to sell. The home only sold when the owner agreed to deduct the price of a quality replacement kitchen from the asking price. The owner effectively ended up paying for two kitchens. Oops.

The key to spending the right amount on your renovation, to finding the optimal price, is to carefully judge the circumstances. Ask yourself: What type of kitchen or bathroom would you expect to find in a home of this type and value? What would you find in other homes in this neighbourhood? And most importantly, what kinds of people would be most attracted to this home, and what would they be looking for? 

Unfortunately there's a bit of an obsession amongst Kiwi renovators with appealing to widest possible market. All too often, they end up with a bland result that really appeals to nobody except perhaps accountants.

What's needed in the New Zealand real estate market is a little more flair. The kind of flair that makes the house stand out from the rest and gets potential purchasers oohing and ahhing over it.

But how to achieve this kind of flair without breaking the bank? That's the subject of our upcoming series "How to renovate with flair for maximum return". Watch out for it in the next issue of Fix It's email newsletter Home Improvement.