The false presumption that renovating to sell isn't a valuable exercise because the next buyers will renovate once they move in... couldn't be farther from the truth.
An increase in the distance between median income earnings and median house prices means many homebuyers are highly leveraged when purchasing a property. This often leaves them with very little spare capital for renovations. As a result, fit for purpose properties are seen as more appealing. Never underestimate the value of convenience.
The simpler and cheaper the project is, the bigger the cost-value ratio - that's the general rule. Ensure that your spending will maximise your equity and not end up eating into it.
Ways to add value include:
- Recladding - undertaking a recladding project could see you add up to 15% to the price buyers are willing to pay. Plus, cladding is a surefire way of modernising a property.
- Good insulation - this isn't only an expectation but a sure-fire way to add value.
- Adding an extra bedroom - on average, adding a bedroom or living room puts a property in a whole new search bracket. Construction cost consultants estimate that every dollar spent converting a 3-bedroom into a 4-bedroom could likely double your money. This does change in different markets; click here for more information.
- The lowest cost-value ratios recorded are for bathroom and master suite additions and renovations. These still, however, provide returns of more than 50 per cent. Buyers look at kitchens and bathrooms with an understanding that if they were to buy the house and these weren't functional, this is where they would need to spend money.
Building is considerably technical - so, if you want to revamp spaces such as kitchens, bathrooms and more, you may well need a builder. This doesn't, however, mean that you can't help.
Your sweat equity could save some precious dollars. You could clear building rubbish, empty bins and help out as builders, electricians, and plumbers are busy. This could move things along faster, saving a bit of money. A win-win for everyone!
Before starting your project, you should find out how much your home is worth. We can help by providing a free appraisal. Once you know the value of your home, you will have a more straightforward guide around how much you should spend.
At the time of appraisal, remember to ask which renovations add the most value. This will help to ensure that the renovations benefit the resale value.
