Most people are keen to spruce up their property before putting it on the market, but what is an appropriate amount to spend on this? Carefully planned expenditure on a house before it’s listed can certainly lift the sale price in excess of the money spent. Indeed, some people have turned this practice into a profitable investment strategy; buying run down properties, doing them up and then selling them.
However, not all expenditure will necessarily result in a higher resale value. For example, if a property is situated in an area ideally suited for townhouses, then any significant expenditure on the existing house could be wasteful, as most buyers for that property would be more interested in the land value.
Expenditure largely falls into two categories: general maintenance and structural changes. General maintenance includes repairs such as repainting, replacing worn fittings such as water heaters, and landscaping. These expenditures are small compared to the value of the land and it’s important to attend to them regularly so the value of the property doesn’t decline.
These expenditures are the easiest and most cost effective means of lifting the value of a home prior to sale, particularly if the result is clearly visible. Lovely garden improvements or fresh paintwork both inside and outside the home can make a big difference. Even modest improvements in wet areas can make an impression on buyers. Replacing old, unfashionable tiles, shower screens, mirrors and tap fittings with modern ones can look a million dollars, as can new bench tops, tap fittings and splash backs in the kitchen.
The other category of expenditure is with structural change to the home or major earthworks in the yard. This includes things such as costly extensions or the installation of a pool. It’s not so unusual to see recently extended properties up for sale once the occupants discover that the renovation does not satisfy their long term requirements.
The sale price of a recently extended home may not always fully cover any major expenditure on a home. The key to achieving a higher resale price for a property is to spend money on work to increase the number of potential purchasers.
This might include increasing the number of bedrooms, however a trap for many renovators can be to overlook the extra living space required elsewhere in the home resulting from an extra bedroom. These days however, an extra room is more likely to be wanted for home theatre or computers rather than children.
Other attractions for potential buyers and needing only modest expenditure, might include air conditioning in a living room, smart paving around parts of the home, a lock-up garage or data points in the lounge and study.
This article was originally published on reiwa.com.
Photo: Jocay on Flickr.