We’ve all seen the reality TV shows where people transform their homes with amazing renovations before cashing in big when it’s time to sell.
While property owners can certainly make a lot of money through smart renovations, the risk of over-capitalising is ever present.
Over-capitalising, which is when the cost of your renovation outweighs how much value it ultimately adds to your property, is a common pitfall among Australian property owners, so be sure to consider your motivations before reaching for the sledgehammer to start knocking down walls.
From the outset, it’s always a good idea to have your property valued, and also consider other property values in your neighbourhood. This will give you an indication of what your property is worth and where it sits relative to median property prices within your suburb, and in turn provide guidance on what budget you should allocate for your renovation.
Be strategic about your renovation and develop an understanding of what will deliver the most value. For example, updating kitchens and bathrooms can be a great way to add value that prospective renters and purchasers really notice, while energy efficient homes are also increasing in popularity.
Importantly, establish a budget and stick to it. Knowing how much money you can afford to spend will encourage you to focus on upgrades that meet your budget and help avoid over-spending.
And if you’re renovating an investment property or preparing your own home for sale, keep a broader audience in mind rather than incorporating too much of your own personal design flair, which may not be to other people’s tastes.
There are plenty of other considerations too, so do your research, plan accordingly and remember that a clever renovator will only spend money to add value.
If I can assist you regarding the sale of your property, please contact me: phone 0400 221 592 or email Jamie.firstname.lastname@example.org