If you’re relying on the market to increase your house value, you could be waiting for a very long time.
Instead, you may be able to “force” growth in your property by making some minor renovations even when the market isn’t working in your favour.
Whether you’re planning to sell or simply want to access your equity, there are a few simple and cheap things that you can with your property.
What are you trying to achieve?
Before you get started, you need to be clear about why you’re renovating. This could be to:
- Get a higher bank valuation so you can access your equity.
- Maximise your selling price!
The renos you’re going to do depend on your goals.
If you’re going to sell your property, then you need to focus on the areas and features that will appeal to buyers. This could mean spending a bit of money to achieve this.
If you’re looking for a higher bank valuation, it’s all about making it look good without spending big dollars to get the desired result.
Step 1: What does the market want?
When it comes to renovating, always remember: it’s not about you, it’s about the buyers.
If people don’t want what you’re selling then you’re not going to get a good price.
To make sure that you’re delivering what the market wants, talk to local real estate agents to find out what’s in demand in the area. For example:
- Do buyers prefer tiles, carpet or polished floorboards?
- Are agents finding it hard to sell properties that have outdated kitchens?
- Are most buyers young families, or retirees? Maybe they’re investors who want a low maintenance property?
Answers to these questions will tell you where to spend your money to get the best result and an increase your house value.
Step 2: What renovations pay big dividends?
Structural versus cosmetic
Structural renovations are major alterations to the property such as knocking down walls or building an extra storey. This type of work can be costly, time-consuming and may require council development approval.
The upside is that you could add a massive amount of equity if you do it right. The downside is that you could easily overspend.
On the other hand, cosmetic renos involve minor changes such as repainting, ripping up the old carpet or installing new lighting fixtures. You can do these at a fraction of the price and still achieve similar results.
It’s all about cosmetic!
We’ve seen many customers of ours renovate and rack up huge gains in the price of their property with very little spending bust by doing cosmetic renovations.
The key is doing the absolute minimum renos in the most cost-effective way and still deliver what the market wants. You want to avoid the headaches involved with a big ticket renovation project.
Don’t be tempted to create your dream home! Create the market’s dream home!
You want it to appeal to everyone so neutral colours often work well.
It’s all about doing exactly what local agents suggest!
Kitchen / bathroom
Do you have an outdated kitchen or bathroom? This is the one exception to the ‘no structural changes rule’.
Detonating a cheap 1970’s kitchen and replacing with a modern flat pack kitchen can do wonders for the value of a property.
If it’s your ownhome then you may like to use a builder who specialises in these renovations.
For an investment property, people tend to use IKEA, Bunnings or other flat pack kitchen providers in conjunction with a carpenter or another type of contractor.
Go for ‘above average’, not top quality, for the best return.
Should you add a granny flat to your property? It’s all about demand and your agent’s feedback is invaluable.
Some suburbs have large ethnic populations who prefer to have the extended family living with them. In these areas, granny flats are in high demand.
Other suburbs prefer big backyards so building a granny flat can actually reduce the value!
Without a doubt, building a granny flat can help boost your rental yield. So if you’re an investor, it’s a great idea to look for ways to ramp up your house value and your weekly cashflow too.
Focus on the “wow” factors
Small and minor improvements can play a huge part in increasing your house value. You can focus on cheap wow factors such as:
- Dimmer switches: For under $100, you can install dimmer switches and add a ‘deluxe’ vibe to a standard home.
- Feng Shui: This is a cheap method of increasing your house value particularly for customers that practice Feng Shui living. You can apply it simply by removing clutter, adding in healthy plants and fresh flowers, and repositioning furniture.
- Built-in wardrobes: This can cost you around $800 to $2,400.
- Polished floors and heated tiles: Polishing floors and installing heated tiles is relatively cheap but can wow potential home buyers.
- Recessed lighting: By adding recessed lighting to your kitchen, bathroom and bedroom, you can boost up the wow factor of your home and it’ll cost you just under $1,000.
- Ducted air conditioning: From around $5,000 for smaller houses and up to $15,000 for larger ones, ducted air conditioning is a bit on the expensive side. However, this is one wow factor that can significantly help in increasing your house value.
There’s no end to the options. The key is to ask the agent what people actually want. Your goal is to spend very little to get the maximum wow!
Step 3: The inspection
It doesn’t matter if you’re selling or getting a higher valuation, either way someone is going to come and look at your property. You need to make a great impression for better house value.
Here are some simple ways to get your property inspection-ready:
- Make sure everything is clean and uncluttered.
- Have your home well ventilated and fresh air passing indoors.
- Turning on the lights can help you display your home better.
- Repair any obvious problems with your home such as broken tiles or faded paint.
- A lawn that’s trim and free of weeds can add an enticing charm.
- Properly arrange furniture and furnishings.
- If it’s hot outside, make it cool inside. If it’s cold, make it warm.
- A vase of lovely flowers, some fresh brewed coffee, a magazine on the coffee table and fresh towels in the bathroom and kitchen can work wonders.
Are you selling?
Get rented furniture! This can typically cost you around $2,000 to $10,000 but it makes a place look great!
Should you time the market?
If you want to get the best selling price, sell at the top of the market cycle, when it’s hot. There are a number of ways to tell if the market is heating up. You’d notice that properties are selling faster, there are more auctions and prices are moving up fast.
As always, it’s a good idea to talk to agents about this.
If you’re buying, you want to buy when the market is slow and there is less activity. This way, you can take your time and negotiate for the best price.
Getting a valuation?
Whether you’re selling or buying, you want to know how much your property is worth. The quickest and simplest way to do this is to ask your mortgage broker to provide comparable sales so that you can provide these to a valuer.
Often, bank valuations are very conservative but can you challenge it? Nope! It works in less than 3% of all cases. So once it’s done, it’s done. If you didn’t get the valuation you wanted, you have to go to another bank.
Did you know that we can order multiple bank valuations for free before lodging an application? We can then choose the highest valuation to effectively increase the equity position in your property when you first buy it and avoid the cost of Lenders Mortgage Insurance (LMI).
You can discuss this with one of our mortgage brokers by calling us on 1300 889 743 or by filling in our free online assessment form.