Renovate and Improve Your Property Value
Not everyone can afford to buy a brand-new property first up, for most entering the property market, an established property is usually the way in. Which means many could benefit from undertaking some level of maintenance and upgrades in-order to improve value.
Whether to put the property on the market or staying put a while longer in your dream home, simple renovations could help you improve your property’s value and boost your equity. That said, not all improvements are created equal. Let’s look at some home renovation tips for getting the best bang for your buck.
1: Renovate as if you are selling
Think, who is the potential buyer for your home going to be based on things like your location and type of property. Would your place best suit a young professional, a family with kids, a retired couple, or an investor? Consider improvements that will appeal to the most likely buyer, kitchens tend to be top of the list and pool typically at the other end.
2: See the proposed improvements through a valuer’s eyes
When you refinance or sell your home, the lender will likely send a valuer to estimate your property’s market value. A Valuer will determine the condition and quality of your home’s construction based on other properties in your locality and is typically lower than valuation from an optimistic real estate agent. If you make improvements that may bump you up to a higher quality tier, the impact on your home’s value can be substantial.
For example, outstanding maintenance typically drives down property value even in a great location. Sometimes, something as minor as adding a fresh coat of paint or re-polishing wooden floors can have a big return on investment. Quality ratings, on the other hand, can be slightly tougher to influence so be careful not to over spend on high end improvements if the surrounding properties are of average built quality.
3: Getting best return on renovation budget
If you’re looking to invest in bigger renovations, consider changes that will increase your square footage of the living area, one of the best ways to do this is by adding a deck to the property. Kitchen is sometimes regarded as the heart of the house, be it for a family that likes to have dinner together regularly or entertainers. A minor kitchen remodel will recoup 80 percent of its cost, according to Remodelling Magazine, while a major mid-range kitchen refit only has a 65 percent return on investment.
The bathroom is another prime place for renovations. If your property only has one bathroom, consider adding another or if you have two already, give it an overhaul. Where budget is an issue, choose to replace the vanity, lighting and toilets at least, it’s an inexpensive way to dramatically improve the look and feel of the room.
4: Kerbside matters
Basic landscaping can also make a big difference since pruning unwieldy trees or bushes can create a better view of your house and even brighten the inside of your home. Keep in mind that even projects like installing automated garage doors, a well-presented front door or a fresh coat of paint for the external walls can increase the value of your property.
Do the sums and set a timeline for completion before starting the project
If you’re planning on undertaking a major renovation project for your property and don’t have the necessary funds, a cash-out refinance may be a good option if you have sufficient equity in the property. Another option to consider is, refinancing as a construction project and the lender will typically ask the valuer factor in the value of the improvement when providing a ‘as if complete’ value.
Meaning you refinance your current mortgage for more than what you owe and the lender will disburse the funds required for the renovation on progressive payment basis. Home renovations is one of the better reasons to refinance and cash-out, as well thought out projects can help boost your equity in the long run.