Personal Finance

Barry McCall gives us some tips on home improvement costs and some important holiday loan information from St.Patrick’s Credit Union.

Home improvements don't necessarily add value

When it comes to home improvements, the old adage regarding one man's pleasure being another's poison certainly applies. And this is probably nowhere more true than in the case of investment property, where extreme caution should be applied when considering any significant spending on improvements.

That fitted kitchen or bathroom may be entirely to your taste and might be something which would make you pay a little extra if you were buying that home. However, there is absolutely no guarantee that anyone else will share your taste or appreciate your efforts in this regard.

The best advice for investment property owners in this regard is to consult a local estate agent before making any spending decisions. For example, most estate agents will tell you that a conservatory will not necessarily add any value to a home. This is due to a number of factors with the main one being that most home buyers are not looking towards added extras when making their purchasing decisions. If two similar houses in the same area are on offer and one has a conservatory and a higher asking price, the one with the lower price will almost certainly sell first.

With the smallest and most basic conservatory now costing around €20,000, this could be a very expensive investment with no real prospect of a return.

The same applies to new kitchens and bathrooms. The lowest common denominator will apply to home values. Buyers are unlikely to pay more for a house just because it has a different colour bathroom suite or a nicely finished shower enclosure if another is on the market for a lower price without these embellishments.

There are, of course, exceptions to this situation. Among these are attic and garage conversions, as well as extensions that add additional living or bedrooms. For example, an attic conversion which creates a new bedroom - possibly with en suite facilities - can turn a four-bed home into a five-bed and bring it into a new price category and deliver a very significant return on investment

However, caution should be exercised. If the attic is quite small, the room created may not be of sufficient size to be regarded as anything other than a guest or storeroom, and so may not actually add significantly to the value of the home.

Garage conversions are also quite interesting in this regard. Sometimes it may be may be wiser not to convert the garage and to use its existing as a selling point in the future. A buyer will pay a premium for a home with a garage capable of conversion and this extra amount may be all that you'd get after converting it yourself in any case.

Turning to the outdoor areas, estate agents usually advise investment property owners to take a minimalist approach to gardens. In other words, no fancy decking, rockeries or water features. In first place, it is unlikely that tenants will look after these with the same level of tender loving care that an owner would and therefore they are likely to deteriorate and actually impact negatively on the value of the home.

Secondly, very few people will pay even €1 extra for garden features. As in the case of bathrooms or kitchens, it's a matter of personal taste and the home with the lower price tag and the more basic garden will usually sell first.

So don't go overboard in making improvements to an investment property. By all means, keep it in good repair and make whatever improvements which may improve its rental value. But anything more than that is unlikely to be repaid when it comes to selling the property.

Beware of surcharges

With most people's annual holidays now fast approaching, it is time to consider the hidden extras that might be involved in the overall cost of the holiday. The first thing to look out for is fuel surcharges on your flights. These might be applied by the airline or charter operator and it is worth checking in advance if you might be subject to them.

The second charge to consider is excess baggage. Rising fuel costs and the increasingly competitive nature of ticket pricing have meant that the days of a free and easy attitude towards baggage weights are well and truly gone. Check out your baggage limits in advance of travel and make sure you are well within them when flying out, otherwise those few holiday souvenirs you pick up might end up being very costly indeed. Also check out the specifications for hand luggage - if your bag is too big it will be put in the hold and its weight will be added to the rest of your baggage.

Finally, there's the golf clubs or other sporting equipment. These are now charged separately by most airlines with the costs ranging up to €30 one-way. If a few people in the party want to bring their clubs, this could add very significantly to the overall cost of the holiday. If it's a case that you only intend playing one or two rounds it could end up cheaper and more convenient to hire clubs at the course.

St. Patrick's Credit Union (ESB Staff) Ltd.)

Holiday Loans

With an interest rate of just 6.5% p.a., St. Patrick's Credit Union should be your first port of call for a loan for your summer holidays, with a typical payment of €20 per week or €87 per month on a loan of €1,000 over 12 months. So you don't have to wait for your SSIA funds to mature before you can go on that dream foreign holiday or well-deserved city break.

Remember that your current loan balance does not have to be cleared before you can apply for a top-up loan, and you are not restricted to borrowing three times your shares.

St. Patrick's Credit Union can also look after your foreign currency needs through Thomas Cook on a no-commission basis. Members can avail of this service by completing a Foreign Money Order form and sending it to the Credit Union with a Share Withdrawal form or Loan Application form (all forms available on the website www.stpatrickscu.ie). The Foreign Currency can either be collected at the Credit Union office or posted to the member's home address by registered post - usually within 2 days of the Credit Union receiving the completed forms.

Our Dublin-based members can also deal directly with Thomas Cook by calling into the Thomas Cook office (bottom of Grafton Street, opposite Trinity College) and by showing their ESB ID card will not be charged commission.

Please contact Valerie or Kathleen on 01-6325100 if you have any questions.