Some improvements more profitable than others

Press, 28 September 1988, Page 57

Some improvements more profitable than others

The prevailing wisdom in real estate is that investment in property should be governed by location. There is really no way around this fact other than watching property prices in non-prime areas constantly in order to pick out upward price trends. At present with a market just starting to move with some strength again is probably a good time to carry out this exercise. Ultimately, however, picking an area that appears to have

good prospects in the future is like all risk investments something of a punt. It is also something of a vital exercise — there is no point improving a property where the neighbours show no interest in pride of ownership themselves. A house in this sort of area is the most at risk of panning out as over-capitalised. There are some fairly hard and fast rules to apply to houses if a hefty profit is sought. The prime targets for home

improvement these days are the kitchen and bathroom. Both areas provide the best investment return when they are upgraded. Many homes purchased for renovation are also the first home for many people. It is worth bearing in mind that while you live in a house the improvements you require most urgently may not be in the kitchen or bathroom. If this is the case tackle the

tasks that affect your immediate comfort first. They may not be such certain sources of capital gain but they will count for something when it comes to sale time. Should a sale be planned within a few years keep your improvemente to a middle-of-the-road style. Flamboyant colour schemes and room designs are best reserved for more permanent homes.