The quality and condition of your bathroom will affect the value of your property, writes Harvey Grennan, but overcapitalising can get owners into hot water.

Bathrooms are among the most expensive areas of a home to renovate but are critical in determining its value. A stunning bathroom, or the addition of an ensuite, can greatly enhance the selling price, not to mention your lifestyle.

The first decision is whether to give the bathroom a quick facelift or a full makeover. If the wall and floor tiles are passable you may get away with just a new vanity, mirror, toilet and cistern. You might get change out of $2000.

If the tiles are a bit shabby but still firmly affixed to the walls and floor, you needn't spend money replacing them. But if the tiles are 'drummy' - that is, they sound hollow when tapped, indicating that they're loose - there's no point trying to save them; for every one you glue back on, another will come loose.

Wall tiles can be painted with a special coating for a brand-new look or simply regrouted if the grout is grubby or falling out. This is not as difficult as it sounds. You can buy a grout rake at Bunnings for a few dollars, scrape out the old grout to a depth of around 3mm, then mix up new grout and apply it with a sponge.

If the floor tiles are ugly but sound, you can tile straight over the top of them. This will involve tucking new floor wastes into the old ones, installing an aluminium angle to finish off the doorway, and possibly trimming the door down.

At the other extreme is a completely new bathroom, a project that may be justified by the value of the property. This involves removing the vanity, shower screen, toilet and so on, although you may be able to save the bath. Then the floor and wall tiles need to be removed. Depending on what you find under the floor tiles, you may have to waterproof the shower base before retiling. Then comes the cost of a tiler and a plumber, as well as someone to install the shower screen and mirror. Cost? From $5000 to infinity, but typically $10,000 to $20,000. The key is to ensure your renovation is in proportion to your home's value.

Over-capitalisation can apply to bathrooms as well as whole houses. Putting a marble bathroom in a fibro cottage, for example, would not be a great idea. Try to keep spending on any bathroom renovation under three per cent of the value of the property.

And when it comes to selecting a colour scheme, there are three foolproof colours for bathroom renovations: white, white and white. Avoid patterned tiles, feature tiles and borders unless you really know what you're doing.

Inside the box
Many buyers expect an ensuite bathroom. If you don’t have one, think about how it might be achieved. Perhaps you can use part of a verandah or build a skillion-roofed box off an outside wall.

The bedroom may be large enough to sacrifice part for an ensuite. If not, you may be able to take a little off that room and the room next door. Provided the house has a timber or steel frame, you can remove the dividing wall and build two new stud walls one metre from either side of the old wall. Hey presto, room for an ensuite!

If you can’t manage an ensuite, try enhancing your existing bathroom facilities. If you have a toilet separate from, but next to, the rest of the bathroom, incorporate that space into the bathroom for a more open, luxurious look.