Can Renovations Raise Your Property Value?

This question has started more flame wars than a “Twilight sucks” comment on a teenage forum. Some people insist the answer is yes, renovations raise property value. But those people tend to have job titles like “Interior Decorator”, or something that involves making money from renovation. Other people, like property investors, say they don’t care. Which is funny, because when they’re selling you a house, the expensive flooring is a big issue to them. In this article, I look at the half-truth behind this question:


Lavish living room

All our renovations are functional. That sofa, for example, conceals the burst toilet pipe behi…oops.


What Are The Factors?

For the most part, renovations don’t play a big role in the official valuation. But when you take into consideration extras like cash over valuation (COV), renovations do result in a higher sale price. The factors that make renovation matter are:

  • Buyer’s Experience And Intent
  • Current Median COV
  • Designer or Contractor
  • Prevailing Design Trends
  • Functionality of Renovations


Condo Living Room

In conclusion sir, the buyer's reluctance has less to do with your flooring, and more to do with your referring to her as a stupid cow.


1. Buyer’s Experience and Intent

If you’re selling to a property investor, your renovations are as relevant as your hair style in a bar fight. Most property investors are not looking to move in, so it doesn’t matter how pretty your chandelier is.

Property investors will stick close to the valuation. If they’re interested in rental yields, they only care that the place looks neat. In fact, if they’re looking to rent, renovations can even be a disadvantage. Can you imagine renting a house with vertical gardens or a crystal chandelier to college students? There’d be European debts smaller than the monthly repair bill.


HDB flat with indoor theatre

Perfect for anyone who spends their life watching TV, drinking beer, and staying unemployed. (i.e. The clientele of every Lucky Plaza KTV).


With home buyers, the situation is different. Comfort is their main focus, so renovations can prompt them to pay more. Also, home buyers tend to be less experienced than property investors; they may not know the hard rules of location and resale value.  As such, they may prize the cosmetic features of the property over its real value.


2. Current Median COV

However pretty your renovations look, the current median COV will be the main determinant. The COV determines the amount paid for the property above the official valuation; it’s a sensitive issue, because a bank loan does not provide for it.

So before forking out for renovations, take look at COV prices in your area. If the median COV is low ($10,000 or under), then don’t expect your renovation to “pay for itself”. Singapore’s property market is highly efficient; with sites like iProperty, H88, and SmartLoans, there’s almost no chance of suckering a buyer.

If the median COV in the area is $10,000, then paying for a $50,000 renovation gets you…well, 40,000 reasons to take up adult maths classes.


People staring out the flat

Here come the viewers. Get ready: Once Block 76 signals their new asking price, raise ours to match,


3. Designer or Contractor

Yes, a contractor can double as an Interior Designer. But that’s as clever an idea as getting your car mechanic to double as your dentist.

Interior Designers and contractors seem similar, but they’re not. Interior Designers are up to date on current trends (see point 4), and prestigious design firms can lend branding to your property. Contractors are execution stage, hands-on people: They’re the ones who stick on the tiles and drill into the walls.


Ruined house

When will the contractors get started? What do you mean? This IS the end product.


In Singapore, the term “Interior Designer” is not heavily regulated. At some point, contractors started calling themselves designers as well. And home owners started wondering why, after $30,000, their flat still resembles the set of Prison Break.

Since renovations in general aren’t cheap, it’s best to fork out a bit more to get a recognized design firm. Remember: If the renovations are anything short of spectacular, they won’t justify your asking price.


4. Prevailing Design Trends

Like the fashion industry, interior design has its own trends. Back in the 80′s, art deco was all the rage in Singapore. As of ’05, the industrial look has grown in popularity.

If you’re not intending to stay long, picking something “in vogue” might help. Contemporary styles (all chrome and mirrors) can make a HDB flat resemble an upmarket condo. That’s why few showrooms use traditional design schemes; they’re counting on a “wow” factor to halve the buyer’s IQ.

But if you’re not intending to sell for a while, it’s inadvisable to follow trends. The industrial vibe may be cool today, but in five years, your viewers might be wondering why you live in a factory supply closet. Traditional design schemes (e.g. country house, east Asian, high modernist) are a safer bet. They may not raise your property value, but they won’t detract from it either.


All white design

Excuse me, I think you missed a few spots with the wallpaper.


5. Functionality of Renovations

Functional renovations are the biggest contributor to COV. That is, renovations that do something besides look good. Local favourites are:

  • Walk-In Wardrobes
  • Wet Rooms
  • Kitchen Islands
  • Any sort of partitioning that allows the kitchen to double as a study room or TV room
  • Bar counter seats (sometimes attached to the kitchen island)

These renovations count for more than cosmetic features, such as materials used in tiling, or a ceiling motif. The downside is that these renovations also cost more; so while they may raise your COV, your asking price still may not cover them.


Walk-In Wardrobe

It's a shoebox apartment. Can we count the entire design as a single walk-in wardrobe for billing?


In general, renovations can raise your COV, but do little to help the official valuation. Also, it tends to be high cost renovations that justify a higher asking price. Even if those renovations raise your COV, you may not see a return on investment.

As such, it’s best to treat renovations as a luxury to enjoy, rather than an investment of any sort.

Image Credits:
rogue-designs, ssedro, aenertia, abdulrahman.elections, Sarah_Ackerman, MAZZALIARMADI.IT, MAZZALIARMADI.IT (Last Image), OlgerFallasPainting

Do you expect your renovations to raise your property value? Comment and let us know!

Get more Personal Finance tips and tricks on

Click to Compare Singapore Home Loans, Car Insurance and Credit Cards on our other sites.

More From MoneySmart

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Phl, Japan sign P9.6-B ODA projects
    Phl, Japan sign P9.6-B ODA projects

    The Philippines and Japan have signed agreements for six official development assistance (ODA) projects amounting to 22.289 billion yen or around P9.6 billion. …

  • Commission to launch glossary of Pinoy meteorological terms
    Commission to launch glossary of Pinoy meteorological terms

    The Komisyon sa Wikang Filipino (KWF) will release a glossary of meteorological terms in Filipino to help the Filipino people better understand weather forecasts and instill disaster awareness among them. National Artist for Literature and KWF president Virgilio Almario said yesterday the KWF produced the glossary titled Patnubay sa Weder Forkast to simplify scientific terms used in the weather bulletins of the Philippine Atmospheric Geophysical and Astronomical Services Administration …

  • Divorce bill good scapegoat for couples – CBCP
    Divorce bill good scapegoat for couples – CBCP

    Contrary to what romance novel writers would want their readers to believe, there are no perfect marriages in the real world. This was according to Catholic Bishops’ Conference of the Philippines (CBCP) president Lingayen-Dagupan Archbishop Socrates Villegas. In a statement titled “CBCP Position Against the Divorce Bill and Against the Decriminalization of Adultery and Concubinage,” Villegas said that while it is not easy to make relationships last, learning how to work out differences – and …

  • DND holds off infra dev’t in Pag-Asa
    DND holds off infra dev’t in Pag-Asa

    The defense department is holding off repairs and other planned infrastructure projects on Pag-Asa Island, one of seven islets and two reefs occupied by Filipino troops in the disputed Spratly Islands. Earlier, Foreign Affairs Secretary Albert del Rosario pointed out that the maintenance and repair of facilities in Pag-Asa Island are not covered by the Declaration of Conduct (DOC) of parties involved in the West Philippine Sea territorial disputes. “Repair and maintenance is okay but before …

  • Blackout to hit 5 Aurora towns
    Blackout to hit 5 Aurora towns

    An 11-hour power outage will hit five towns in Aurora on Tuesday, the National Grid Corp. of the Philippines (NGCP) announced yesterday. The NGCP said Baler, Dingalan, San Luis, Ma. Aurora and Dipaculao would be affected by the blackout. The NGCP said parts of Nueva Ecija and Aurora were hit by a power interruption yesterday due to the tripping of the Cabanatuan-Baler 69kV line. …

  • Rules set for climate change programs
    Rules set for climate change programs

    The Department of Budget and Management (DBM) and the Climate Change Commission (CCC) have released the revised guidelines to track and monitor climate change adaptation programs of the government. “The government of the Philippines has demonstrated leadership and strong commitment in implementing a comprehensive reform agenda to respond to climate change,” read the joint memorandum circular published in The STAR yesterday. “With the goal of using the budget process to plan, prioritize and …

  • It’s time to move on– Speaker
    It’s time to move on– Speaker

    The nation can now move on as President Aquino has satisfactorily explained his side on the Mamasapano incident for which he even begged for understanding, lawmakers led by Speaker Feliciano Belmonte Jr. said yesterday. “It’s time to move on,” Belmonte said in reaction to Aquino’s pronouncements made before new police graduates at the Philippine National Police Academy (PNPA) last Thursday. The President has spoken far too much about what he knows and about his limited involvement in the …

  • ToyotaPH continues it’s strong sales in February
    ToyotaPH continues it’s strong sales in February

    Toyota Motor Philippines (TMP) sustains its strong sales in its February performance. Toyota’s strong performance last month was due to the  high demand of the Vios, with sales of 2,012 units and of course the rest of Toyota’s line up such as the Fortuner, Innova, Wigo, Hilux, Avanza and Corolla Altis. Toyota’s luxury brand, Lexus, recorded 60 units last month. …


Should Aquino be held accountable over the Mamasapano operations?

Poll Choice Options