Tips to maximise the value of your property through renovation

It’s estimated that Australians spent a staggering $7.2 billion on property renovations last financial year, an increase of $700 million compared to the previous year. There is no denying that as an investor, purchasing a property that has the ability to be upgraded is a great strategic way to increase your investment’s value. The trick is ensuring you don’t over or under capitalise for the area, ultimately sacrificing your return on investment (ROI). If you’re looking at renovating your investment, here are some tips to ensure you maximise the value of the property.

Break it down

Having a clear project plan at the beginning of your endeavours will assist you along your renovation journey. Break up your property into zones and evaluate the extent of upgrades needed for each area. This will help with the budgeting process and also provide an outline of how to tackle each area.

The front of your property is responsible for first impressions. Otherwise known as curbside appeal, it’s important that the gardens are manicured, the lawns are mowed, and the exterior of the property is neat and tidy. If a buyer approaches a property that seemingly needs a lot of work from the get-go, could be a major deterrent in their purchasing decision.

Understand which areas of the property are the busiest zones. For example, in a residential property the bathrooms and kitchen are typically what are known to “sell a home”. Investing here if necessary is wise, but understanding the market’s needs and wants will help drive any decisions and determine how much to spend in these zones. A similar strategy should be used for the back exterior of the home; there is no point installing a pool for the sake of it, or likewise a carport or garage.

Major renovation or upgrades to consider which typically add value to a property, include:

  1. Additional bedrooms
  2. Outdoor living space, deck, pergola, pool
  3. Storage, particularly in laundry, kitchen and bedrooms
  4. Off-street parking
  5. Air conditioning
  6. Quality flooring

Lastly, don’t underestimate the impact of minor aesthetic upgrades such as a fresh lick of paint, or new curtains and blinds.

Set a budget

In order to maximise the value on your property through renovation, you need to get the balance right between how much you invest, and what you receive in return – which can be tricky given the somewhat unpredictable nature of selling property.

You want to be conservative with your funds, but not cheap. A cheap renovation is not likely to appeal to quality buyers; but a renovation that has been done well and will not need redoing for some time is a bonus for a future owner.

Set a budget that won’t allow you to over or under capitalise in the area. Doing your research on previously sold comparables will identify a guideline for your property, outlining where your investment funds will be best recouped. Sticking to a predefined budget will help when faced with pressures or instances where you can be encouraged to overspend.

Speak with professionals

There are a myriad of professionals available to you to guide you on maximising the value of your property through various techniques. This could be through renovations, simple upgrades or staging. Staging is when your property is filled with carefully selected furniture that suit the demographic taste or persona for open houses and photography, assisting with the purchasing process by appealing to the right people. You’ll be able to make your budget stretch as for as possible by investing in people who do this for a living.

Whether it be interior designers, real estate agents or project managers, these professionals will help keep your renovation to time, budget and brief. If you have full-time work, or other commitments that will impede in the timeline of the renovation, it could be worth considering hiring a project manager. Generally speaking, the longer a renovation takes, the more it will cost in the long-term.

It’s important throughout this process to remember that you’re not the owner anymore. Sure you may still utilise the property, but changing your view to that of a potential buyer will ensure your renovations suit them, and ultimately pay you dividends.

Contact CPS today to discuss your renovation ideas and investment opportunities.