Renovation is one of the ways you can differentiate your home to attract buyers in a slow market, but you need to do your homework to ensure that renovating before you sell is worth the time, effort and money.
Renovation, whether major or minor, is no guarantee that you’ll be able to ask more money for your home. It’s important to know what to renovate so that your home appeals to a large number of buyers, and that the renovations won’t cost you more than what they’re worth to the value of the home.
Is it feasible?
Knowing how much you should spend is all about research. A good starting point is to estimate how much your home is worth now versus what it could be worth when renovated. Look at other properties that are already renovated and are similar in terms of building style, number of bedrooms and block of land — this will give you an estimated sale price.
Take your estimated sale price and subtract your expenses and expected profit in order to work out your renovation budget. Get some quotes on the kind of work you are thinking of having done and make a decision about whether you can do a decent renovation job for this amount.
Overspending on a renovation will eat straight into your potential profit so it’s important to be clear about how much the work will cost and whether it will be more or less than the value gain.
Will it appeal to buyers?
Focus on renovations that appeal to the majority of buyers such as work done to the kitchen and bathroom. Renovating to sell is a business decision so opt for a neutral look that will appeal to more people rather than making choices based on personal preference. Visit display homes, look at magazines and talk to real estate agents to get a sense of what the current ‘look’ is in home presentation.
The more labour you undertake yourself, the less risk there is of overcapitalising, so be prepared to get your hands dirty with jobs you can do yourself.
Renovate to highlight your home’s best features, focusing on appearance rather than function. If you have a choice between replacing the hot water heater or re-painting the house, for example, it’s the new paint not the water heater that will impress the buyers.
You can add value to your property with the following features:
? Good-looking facade — fresh paint, tidy garden, roof/fences/window
frames in good repair.
? Landscape — presentable from the street and privacy from neighbours.
? Deck/terrace — an outdoor living space that leads off from the indoor
? Updated kitchen — new fixtures, open-plan style and quality appliances.
? Bathroom — an added or remodelled bathroom.
? Additional bedroom — only if you can add it without overcapitalising.
? Green features — solar hot water, energy efficient lights, energy efficient
fittings, grey water system, drip irrigation.