Remember the children’s book Doghouse for Sale? Well in it, Freckles the dog fixes up his house in order to attract prospective buyers. But after adding a fresh coat of paint, putting in a nice new bed and making everything look attractive for a buyer, he has second thoughts and decides to keep it.
It’s an oldie, but a goodie, and is a good analogy for what a lot of homeowners do today – they decide to do renovations for selling purposes, and, just like Freckles, discover the house they have is in fact the one they wanted all along.
In fact, even if selling isn’t in your immediate future plans, it’s still good to think about the overall value to the property with any changes you do make. So if you are planning refurbishment for your house, Bruce Wiggins, a registered valuer and team leader for the QVV Northern Region, says the first thing homeowners should do is stand in someone else’s shoes.
“The best thing is to try and objectively take note of the good and bad points about your property, then identify what can be upgraded/fixed, and what will have to stay as it is. Consider present and future needs, and then ascertain whether the home in its current state meets those needs, or can be altered to meet those needs.”
1. STEP OUT ONTO THE STREET
Wiggins says that while you’re out on the street, it pays to look at the property in relation to that of the neighbours and other homes in the immediate area. Why? This will provide a natural picture of the locality. For example, if most houses are two level, with four bedrooms, then a one level two bedroom home has plenty of scope for enhancement. However, if the situation is reversed, it probably wouldn’t pay to think about adding more rooms.
Once the above has been done, engaging a valuer is a solid next step to ascertain the current value of your home and to provide a starting point. They will also give a breakdown of the site and building value, and if the buildings are of significantly less value than the land it sits on, there is probably scope to undertake the work that has been envisaged.
2. WORK FROM BIG TO SMALL
After the ideas have been flowing and a wishlist has been drawn up it’s time to decide ‘where to from here’. Wiggins suggests starting with the big stuff first.
“Work down from the large to the small. Whatever is required, it pays to work in a logical sequence by getting the big stuff done and progressing to the little things. A piecemeal approach is not recommended as it can make a property appear bitty. Some people get so far and then get stuck, and when this results in a half-finished property, there will be a negative impact. So be sure of your ability to complete whatever is planned to the level envisaged.”
3. A BALANCE OF FINISHES
It also pays to consider what kind of finishing you want when it comes to the fixtures and fittings. Some will argue that it is always better to go with quality, for both durability and better return on investment, but that can depend on the value of the property. It is important to remember that you should always start as you mean to go on.
Wiggins notes that high-end kitchens should definitely be matched with high-end bathrooms, because an imbalance between the two could affect value. And something else that needs cautious consideration is this: how much you spend isn’t always comparable to the amount of value you are adding to the property.
“Properties are initially constructed with fittings that are of a similar quality throughout, and while kitchens and bathrooms are the obvious places where money can be spent and add value, care is needed. A $50,000 kitchen or bathroom is not going to have the same result in a low-value property as in a higher-end property.
“This relates primarily to market conditions, but basically spending too much on a low(er) value property will possibly mean you don’t get all your money back – it’s known as overcapitalisation. Conversely, not spending enough on a high value property will have a similar effect, in that it may pull the overall value down.”
4. A SAFE BET?
While there is no guarantee when it comes to adding value through renovations, sticking with the obvious is the safest bet, and if you feel like the ‘ugly duckling’ on your street, there is certainly no harm in looking at a few viable options.
“If the majority of properties in the area are four bedroom and yours is three, then adding a bedroom will most likely enhance value. Care must be taken however to ensure that the cost of the renovation does not exceed the value of the end result,” says Wiggins.
5. SEEK ADVICE
It might seem like an overwhelming task to update your abode, but just remember Freckles and his dog house – he was pretty chuffed with all his hard work in the end. So before you embark on any renovations, Wiggins’ advice is to plan, talk to friends and relatives about their experiences, and engage a valuer to establish the before and after renovation values based on the plans.
“I’d also recommend liaising with lenders, builders and architects to ensure that you’re getting what you want, and that you can afford to complete the job.”