When you are considering putting your home on the market for sale, renovating can be a good way to increase the value of the home – but it is not a golden ticket – and it can come with pitfalls along the way!
The first step, is to have an appraisal of the property done to see what price range it currently sits in, as it is, and also check your land value. If you use a good, local, knowledgeable real estate agent, they should also be able to give you suggestions of what improvements will increase the end sales price, or whether there is a stronger sales market for properties that need renovation rather than already renovated homes in the area. There is no point spending money on making improvements, if the changes do not add tangible value or increase the likelihood of a faster sale. It is also beneficial to ask the agent to have provide examples of recent sales of similar properties that have already been renovated to get good researched comparisons. You may be surprised to know that we have a stronger demand in most cases for un-renovated property!
The second step after this research, is to consider what is necessary, and work out an estimate for the cost of the improvements. Of course the more work you can do yourself, the less it will cost, and jobs like cleaning, basic gardening, minor maintenance and painting touch ups done to a good standard are simple and easy. Just remember to leave any electrical or plumbing jobs etc to the experts!
In dealing with all types of properties every day, we have found that the type of renovations that are the most cost effective and have the greatest impact, are repainting internally and new floor coverings. These items instantly affect the appeal of the property and give the feeling that the new purchaser can move straight on in or rent it straight out. Remember to keep the colours neutral though. While bathrooms and kitchens are the next most renovated features, they are also the more big ticket items that will cost you more money and time, plus being very personal changes. What you think is beautiful, appealing and a suitable layout may not be consider so by the potential buyer. So think long and hard as to whether the renovation is worth doing and generically appealing, or whether you are better pricing the property a little lower taking into account that you know these bigger renovations will need to be done by the new owner.
So now you know what your home is worth as it is, what work you can do, and what it will cost to improve it. Once you add these figures together, is the total amount less than what similar renovated homes sell for in the area? Would you be on track to make a profit when you sold, or would the improvements end up with you over capitalising on your investment?
Don’t forget to take into account the time the renovations will also take to be completed, and the occasional headache of poor quality work or unreliable tradespeople. Time can also cost you money, with additional mortgage repayments or time off work.
So the best advice is always to do your research first and talk to the experts!
Let me know if I can help! Call Rebecca Herbst on 0417 644 840 or email rebecca.herbst@century21.com.au
