Improve your property with a further loan

There are two types of further loan - an ordinary further loan and a further loan to build. The former can be used for anything of your choice, including cosmetic improvements to your property, whereas the latter must be used for something related to building. For example, if your existing bond was used to purchase a vacant stand, you could use a further loan to build on that stand. Or, if you have an existing property, you could use a further loan to add a bedroom, bathroom, garage, swimming pool, etc.

There's a difference between cosmetic changes that will improve your quality of life while living in a property, as opposed to changes that could increase the value of your property.

Cosmetic improvements include:

• Interior and exterior painting
• Upgrading security
• Energy-saving lighting, heating and cooling
• Adding storage, e.g. built-in cupboards or floating shelves
• Kitchen renovation
• Bathroom renovation
• Creating a home office
• Installing high-speed fibre internet
• Floor replacement or repairs
• Roof replacement or repairs
• Landscaping
• Rainwater harvesting, grey-water system, waterwise plants
• Outdoor

Structural changes include:

• Adding another bedroom or bathroom
• Adding a garage or converting a single into a double garage
• Adding a swimming pool
• Adding a cottage or granny flat that could generate rental income

How much could the property value increase?

Your property value will not increase by the same amount that you spend on the building work. For example, if you add a cottage and the construction costs R150,000, your property will not increase in value by R150,000 because that amount includes building materials, labour, etc. So, while your property value will most likely increase, you should not expect it to be equivalent to the money you spend on the building work.

It is often said that kitchen and bathroom upgrades greatly increase the valuation, but in reality these are more likely to improve the experience of living there than it is to boost the resale price of the property dramatically. This doesn't mean you should not invest in improvements - just be clear in terms of your expectations and the outcomes.