Every homeowner wants to add value to their property, but the trick is knowing where best to invest the money. Should you add another bedroom, build a pool or a granny flat, or would a garage be better?
And while it seems tempting to do it all, this may not be the best strategy for creating equity. Before you start knocking out walls, it is important to know what your home is worth in its current condition and what changes could help net the highest return when selling.
Consider how long you intend on living at your property. If you are planning on staying there long-term, then you could invest in lifestyle changes you can enjoy now with a view to a future sale. However, if you are looking to gain equity quickly, then you may need to spend a little more wisely and conservatively being careful not to overcapitalise.
The good news is that you don’t necessarily need to fork out a fortune to enhance the value of your property. You may be surprised by how simple cosmetic changes can make a huge difference to the sale price of a property.
To guide you in your decision, here are the top 10 best ways to elevate the equity in your home and appeal to more buyers when it comes time to sell.
- Get expert advice
- Simple changes first
- Revamp the kitchen
- Enhance the bathroom
- Invest in your garden
- Go with the flow
- Add a granny flat
- Enhance a highlight
- Invest in additional storage
- Create an outdoor entertaining space
1. Get expert advice when you can
Renovating your home to increase its profitability can’t be done on a whim. A professional such as a real estate agent or an interior designer will be able to give you some advice as to what they believe would add value to your property.
The benefit of asking a real estate agent is, they live and breathe property in your local area and are very familiar with what buyers are looking for in a new home. This is an opportunity to get a free property appraisal which is integral to working out how much equity you already have in your home.
Equity is calculated by simply subtracting the amount that is still outstanding on all your loans secured by the property from its appraised value. Building equity in your home has a range of financial benefits. Lenders will let you use equity for other financial purposes, even purchasing another property. You can also use equity for major projects such as adding square footage to your home.
2. The simple changes first
Look for easy updates that won’t cost too much but should make a tidy return on your investment.
Painting is one of the cheapest and most effective ways to boost property value. It instantly refreshes an entire home. You can’t go wrong with a fresh, crisp paint job in modern neutral colours for the internals – think greys and white.
A coat of paint can also do wonders for a tired façade. If the budget can stretch further consider rendering exposed brick walls for a more contemporary look. Opt for energy-efficient improvements such as double-glazed windows and veneer wood internal doors for extra insulation.
Investing in smart technology such as smart heating and cooling is a good idea too. Other innovations include smart lighting, smart security systems and of course, high-speed internet connection can also add value.
Buyers love plantation shutters and new carpets making them worthwhile investments. Likewise, a new remote-controlled garage door can give your home an unexpected facelift enhancing its curb appeal.
3. Revamping the kitchen
The kitchen can make or break a sale and is worth renovating if you can afford it. It can also be expensive, so you will need to get the right balance of cost and expected return. If you don’t have the budget for a kitchen remodel, consider having a flat-pack one installed or even DIY.
Keep in mind who is your target buyer and what kind of finishes they will be expecting. The lower end of the market may not be too fussed about a double sink or a walk-in pantry, but such an omission could be a deal breaker for high-end purchasers. Try keeping electrical and plumbing in the same spot to save costs.
Consider making one or a few of the following changes:
- Upgrade your appliances
- A fresh coat of paint
- Change the doors and/or door handles
- Switch fluorescents or spotlights above benchtops to pendant lights
- Replace old countertops
- Re-tile or fix the floorboards
- Ensure you have good storage
- Look to connect to your outdoor entertaining/BBQ area by adding sliding doors
4. Enhance the bathroom
Buyers see value in a beautiful bathroom remodel. But if you don’t have a spare $20,000 to $25,000 to sink into such a project, then consider cosmetic changes. Remember anything broken, cracked or stained needs replacing.
Buyers know bathrooms cost money, and if your one is well-presented it could sway them in your favour. Another quick solution is to upgrade your vanity or mirror and add new lighting fixtures. Wall-mounted sinks and toilets can make a smaller bathroom seem larger.
5. Invest in your garden
Growing a garden takes years, but green thumbs can reap rewards when it comes to selling their home. Not only do they enjoy the landscaping while living at the property, but it will also be appreciated by future buyers. Check with your local council about planning laws around trees that could extend beyond your property boundary too. Fruit trees and veggie patches are always popular.
Swimming pools are not cheap to install, a decision to install one needs careful consideration. If you live in an area popular with young families, then it could be seen as a bonus, however, may not be as appreciated by downsizers.
6. Go with the flow of the property
A property that flows smoothly from room to room is important to buyers. If you are unable to move easily and comfortably from one area to another, then it may seem pokey. Removing one or two walls can open up the space and also make the interior feel larger. It is always an advantage to offer two separate living areas, particularly if you are looking to appeal to families.
Don’t reduce the number of bedrooms unless absolutely necessary. While a walk-in dressing room in the master suite may be your dream, it is not worth sacrificing a bedroom to create one.
7. Add a granny flat
If you have the space, a granny flat can be a big drawcard for buyers for a multitude of reasons. Family buyers love a granny flat as the space can double up as a rumpus room for the kids, a place for the in-laws to stay or a home office. In addition, astute buyers see the opportunity of being able to lease out the external flat and help with their mortgage. Talk to your local real estate agent about whether granny flats are popular in your suburb and how much it could add to the value of your property.
8. Enhance a highlight
Do you remember what made you fall in love with your home? An emotional connection is key to winning over a buyer. If your home has something special, then you need to make it a focus. For instance, if you are lucky enough to have a beautiful view, then enlarge the windows or change the curtains so it can be appreciated.
If you don't have a view, you can always create one with landscaping. Transform an ugly side fence with an evergreen wall or vertical planter box. Use lighting around the backyard or swimming pool to add atmosphere.
9. Invest in additional storage
Built-in wardrobes are a great investment because they are favoured by buyers. But don’t just stop in the bedroom, if you have available space in the hallway or garage, be sure to add cupboards.
10. Create an outdoor entertaining space
Buyers will appreciate outdoor living space for both entertaining, dining and relaxation. If done correctly, it is like an extension of your interior. You can add a deck or paving, ideally covered by a pergola so it can be used year-round.
If space is tight, a deck or patio with comfy seating and shade may be the best option. If you have a balcony, adding a table setting, even small, is a good option. This way buyers will be able to project themselves, enjoying their morning coffee in the sun.
Ready to sell your home? Request a free appraisal from your local LJ Hooker real estate agent to get a better understanding of where your house stands in the current market today. It will give you a detailed breakdown of your property's size, location, how it compares to similar local properties, potential areas of improvement, and much more.
DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.
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