Kitchens and bathrooms are known to be high-traffic zones in a home, and also the most valued assets when people are looking to buy a house, says Ahid Shaikh, co-founder and CEO of Bianca & Bianco. He shares more tips to ensure a high return on investment (ROI).
How can property owners increase the valuation of a property that has lived beyond its prime years? What should be done to ensure a high ROI?
The logic of renovations is very simple. When you go to buy a house that is priced at Dh1 million and looks quite ordinary and the neighbouring unit is for Dh1.2 million but looks like a high-end property, which one would you opt for? You would obviously go for the second option.
A home or property is one of the largest investments a person makes in his lifetime. Whether you use it as your residence, or rent it out, it is important to plan for ways to safeguard its value during its prime years as well as renovate, upgrade or refurbish it as needed to enhance its valuation post its prime.
In the US, Canada and the UK, investors hunt for old houses and redesign them and enjoy great returns. Dubai is no different, so a property that is refurbished will ensure great returns.
The key to refurbishing for valuation purposes is to carefully remember your ROI math, as there is a fine line between making upgrades that add an immediate resale value, and investing in choices with low ROI down the road. A quick review of the current value of your property versus upgraded ones in the market can help create a ballpark figure, which might be good to spend on renovations.
When one is living in the property, the ROI considerations are slightly different, as you need to factor in that you would also enjoy the upgrade to a better lifestyle. However, the math would largely remain the same.
What is your advice to increase property value?
I would say kitchen and bathroom upgrades are known to provide the best return on investment as research indicates potential buyers put great emphasis on these two areas. I also think any of us that has gone to buy a house will agree that flooring can make or break deals. Large slabs or porcelain flooring, marble and parquet can instantly revamp the look of a place and therefore add to the price it can command.
Landscaping can be another low-cost step to increase value. Tiling and paving the garden space can immediately improve appeal and deliver great ROI.
Another important fact to remember is that even simple renovations or refurbishing, like painting, cleaning, fixture changes, are great ways to retain property value over the course of its lifetime.
What kind of demand is there in Dubai’s refurbishment and fit-out market?
The demand is massive. Many large communities in Dubai have crossed the cycle of 10 years and more, and are no longer in their prime. They definitely need some amount of upgrades to maintain the upkeep. So there is a huge captive market of existing owners of older properties that are actively looking to upgrade to appeal to end-user buyers and get the best possible price. Another interesting trend is that today buyers in Dubai are looking to pick up cheaper properties, which they then want to upgrade or remodel.
In terms of fit-out, the Dubai market is flooded with newly delivered shell-and-core villas and mansions. All of these need fitting out before they are ready for occupancy. And affordable luxury is a burgeoning space, with demand skyrocketing for competitively priced but high-quality luxurious finishes.
You have launched a brand that will showcase tiles, kitchen and bathroom ensembles. What role do kitchens and bathrooms play in the look and feel of a property?
Kitchens and bathrooms are known to be high-traffic zones in a home, and also the most valued assets when people are looking to buy a house. Therefore, kitchen and bath upgrades are very popular, as they not only add aesthetic appeal but also several hundred thousand dirhams to your property value. For example, tiling and porcelain slabs used for kitchen or bathroom counter tops can immediately transform a dull but functional space into a designer room.