Savvy tactics to increase home’s value
With property in most cities is selling like hot cakes right now, it may feel like the time to quickly list your home for sale to get a good buck. But there are things you should consider to really maximise your return.
Properties are selling in Australia quicker than ever before, with the average number of days on realestate.com.au for listings falling to a historic low, according to REA Insights most recent Housing Market Indicators report.
However, is a quick sale the best way to generate wealth and ensure you get the top dollar for your property in the current market?
"If you can make your property stand out from the rest, then you are sure to generate plenty of interest and if you have many bidders competing for your home, this will push up the sale price for you," Lloyd Edge, Director of Aus Property Professionals, says.
"A simple renovation could be a quick solution to ensure you gain maximum interest from buyers, but it needs to be the right renovation."
How do you renovate to generate wealth in the current market?
Renovate to what the market wants, not your own personal style, The Aus Property Professionals director says. Keep the potential buyer at the forefront of all the minor works you conduct, as this will attract the most amount of interested parties for your property.
"A fresh coat of paint (inside and outside) will give your property an updated feel as well as increased street appeal, which will gain the attention of buyers," Mr Edge says.
"Keep the colours neutral- whites, creams, and greys as they will provide a blank canvas for the buyer to make the home their own."
If you have dirty carpets then look at these being replaced or if you rip up the carpet you might find some usable floorboards underneath that may just need some sanding and varnish. "New flooring will add to the property's value because this is usually the first thing that buyers look at and take note whether there will be additional spending for them to be replaced once they have purchased the property," Mr Edge says.
Don't neglect the outside of your property
Many property buyers will do a "drive by" of properties to see whether it is actually worth going to the open home inspection, to cut down their list for the busy weekend inspection times.
"It is important to ensure the fencing is in good shape with no ant nests or termite damage, that your pathway and driveway has been pressure washed, and that your letterbox is clearly labelled and in good condition."
"Don't forget to look up at your roof. Inspect the guttering for any damage, clear any leaves and debris, and a pressure wash or paint will have your roof adding to your properties overall impression," The author of Positively Geared says
How do you ensure you don't overspend on the renovation?
As a general guide, Lloyd Edge suggests that for every $1 you spend on a minor renovation you should aim to increase the properties final sales value by $3.
"It is important you set a budget for the renovation work and don't go over this. Make a list of what needs to be fixed and prioritise your spending," Mr Edge says.
To determine the gain in sales value from the renovation it is wise to compare recent sales of renovated properties in the area to the un-renovated properties and determine whether there is a large discrepancy in the final sales value.
Joe Tucker learned the importance of a strategic renovation plan when he bought a property in Norlane, Victoria for $280,000 in 2019.
After three months of renovations - and putting $26,000 of his own money into it, the home's value had jumped $89,000. 18 months later, it had shot up to $420,000.
"I bought the property that no-one else wanted to touch, literally the walls were caving in and wall paper was peeling off," Mr Tucker said.
"Don't be emotional, find out what it will cost to replace and if you can make $2-$3 for every dollar you make, then it only makes sense to move forward."
The 29-year old managed to turn his two-bedroom property into a three-bedroom, which cost him approximately $1,500 in wood and plaster.
Based on his property manager's suggestion, Tucker also got the floorboards polished throughout the home, because 'that's what tenants are looking for'.
Mr Tucker also did a mini renovation on the kitchen, purchasing new handles, paint and installing an affordable benchtop.
His advice for any budding home renovators?
"Paint, by far one of the best return on investments you can get for your property," Mr Tucker said.
And if possible "add a bedroom. It is cheap to do and once complete, you move your property from the median of two bedroom homes to three-bedroom homes, which automatically increases the value, with a small amount of timber and plaster."
Originally published as Savvy tactics to increase home's value