Adding Value to A Property With Smart Renovations
This episode has some value for everyone, home buyers, sellers and investors alike.
Our buyer’s agents give you the hot tips on buying property that you can add value to, it’s easier than you’d expect.
From major renovations that can add hundreds of thousands of dollars to simple cost DIY renos that can help speed up a sale.
Support article: Buying property you can add value to.
Adding Value To Property With Smart Renovations Transcript
00:34 MR: Today, we’re talking about adding value to a property. I’m a buyer’s agent, and I get asked this question quite a bit from my current clients that are buying, and people that are selling as well, I’m asked of different tricks of the trade they can use to add some value very cheaply, and we’ll be talking about those tricks, I guess, and also the major ones as well, the ones that cost quite a bit of money, but you can add hundreds of thousands of dollars to the bottom line when you’re finally selling your property.
01:01 MR: I’ve got invited to many, many appraisals where people would ask me what their property is worth, and I’d walk through and I would compare what they work… The final product of what’s sold in the marketplace, and I’d give them a price saying, “Look, this is what the market is willing to pay for this kind of property.” In many cases, I had people that have overspent on gardens, they’d overspent on moving walls, or they’ve overspent on adding a kitchen with very expensive fittings in it, and unfortunately, depending on where your property is situated, the market isn’t willing to pay an absolute premium for that kind of renovation.
01:38 MR: So as a buyer’s agent and a history as being a real estate agent, what I’ve learned is that it’s best to compare your property as is with sales that have been made in the immediate area, usually within a 2-kilometer radius of the property you’re looking at buying or of your home, and making sure that it’s a recent sale, something that’s sold in the last six months. Now, then you’re best to look at property that has the renovation you’re looking for. So for example, with a property with the same land size, the same amount of bedrooms, but has that pergola that you wanna add on, or has that pool that you wanna add on, or has the extended room, or a second level, and based on that sale price, that will give you a pretty decent margin as to how much money you have to play with, and if there is any profit in that project whatsoever.
02:32 MR: The biggest bang for your buck when it comes to adding value to a property will be adding a granny flat or a unit to the property. So for example, you’re adding a small one bedroom, one bathroom, one small living area, or maybe like a studio apartment set up in the back of a property, that would be a granny flat and a subdividable property, where you can actually get a separate title for this property would be achieving that goal of having a second dwelling on the property that you have the option of subdividing and selling or leasing out.
03:09 MR: Now, the benefit is obviously the rental income is a great incentive, and a lot of my clients target properties that they can basically add a second dwelling to the property in the long run because the cost of buying is so high, so they wanna make sure that they’re able to add to their portfolio in this way. Now, this is a complex way to do business in the sense where it can be expensive and time consuming, so it’s best to get a lot of advice if you’re willing to approach a project like this, just to avoid a lot of heartache and pain, I guess, and make sure that the project is profitable and that it’s actually well worth your while to undertake something like this.
03:49 MR: The second way to add some really good dollars to a property is by extending the car port or adding an additional garage parking space. I love this one because I always look out for it when I’m looking at inner city properties, especially ones that have rear lane ways. Usually you’d see the access point at the back of a property with a single guard car garage door. And the real estate agent sells that as a single car park space. Now, what’s stopping you to add a double car garage door and a little bit more concrete? This requires no planning permits from the council, and you can pretty much just hire a few tradies to conduct the whole renovation for you, and it really can add a lot more to the bottom line of the price when you resell the property, and also it makes living in the property a little bit easier, having that multiple car park place.
04:41 MR: The next one is one that everyone would notice when they walk into a property, either consciously or subconsciously, and that’s neutral styling. Let’s talk about, I guess, a subconscious side of things. When you walk into a property and it’s a little bit dark, you notice wallpaper from the 1970s, they’ve got feature walls that are all different colors, their window coverings are usually drawn, or they’re very big and they’ve got multi-layers to it, it’s blocking out a lot of light, your natural feeling is to be a little bit uncomfortable.
05:15 MR: On the flip side, you walk into a new property and they’ve got big windows, they’ve got small window coverings that let the light in, they’ve got a light color scheme, the furniture’s very light and there’s nothing distracting you to draw your attention to something that you dislike or may ultimately make you feel uncomfortable. The feeling is quite the opposite. You’re actually very comfortable with it and you wanna spend time in this kind of property.
05:40 MR: Now, getting neutral styling right is key to any successful selling campaign. A real estate agent will always tell you it’s them that’s made the difference for getting the absolute premium for a property, but being a buyer’s agent, I can actually absolutely assure you that a premium property that attracts that price has got a neutral styling right. When that For Sale board comes out or that For Lease board comes out for your property, your property will appeal to the masses, whether it’s tenants or whether it’s property buyers, and that is how high rents are achieved, or higher rents are achieved, and that is how real estate agents achieve higher sale prices.
06:21 MR: An open floor plan is key to successful neutral styling. I usually target properties that are the opposite, especially for clients that ask me for properties I can add value to. So what I look for is properties that are usually built in 1970s, in the 1980s, that are split up into many small rooms, so the living area is separate, the meals and dinning is separate, and the kitchen has a separate wall and they’re all quite small rooms. Usually the walls between these rooms are non-load bearings, so what that means is they’re not supporting the roof or the main structure of the property, so quite cheaply and quite easily you could remove a few of these walls and create a beautiful big open living space.
07:02 MR: Homes that don’t have an open floor plan, usually don’t sell for premiums, and that’s why I, as a buyer’s agent, would target these properties. So take note of the sellers, people that are selling their properties and they’re trying to maximize their value. There’s buyer’s agents out there that are looking for properties that have enclosed full plans that don’t have that open space because they are harder properties to sell, that will spend more time on the market, the agent will basically struggle with buyers to convince them to put higher offers in for these kind of property and you’ll find that buyers that are looking at submitting offers, they’re usually a bit less negotiable, they’ll always put in a lower offer and really try haggle rather than try pay a fair price for what your property is really worth.
07:54 MR: Okay, lastly I’ve combined a few of the… I guess the common sense renovation tactics that a lot of renovators use to add value, but I thought I just give my spin on them. So one of the ones is improving lighting, and that’s typically you think of things like window coverings, furniture, they’re absolutely key to making sure that you have a well-balanced property when it comes to neutral styling. But I would also be looking at things of decluttering, making sure when you put the ham on the market you don’t have too much of your own personal things in there, so you wanna make sure it’s nice and light on those aspects. Having a skylight is wonderful to really promote additional light that you could not really get into dark places when it comes to a larger home. New floor coverings and paint, these are a wonderful easy way that’s a really low hanging fruit to any renovator that’s looking at adding value to a home. And a coat of paint can do wonders for the presentation, and most importantly the smell of a property especially if it’s an older one just to freshen things up and make it like new.
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