When it comes to real estate, the value of your property isn’t just a reflection of its physical attributes; it can also be influenced by strategic decisions and thoughtful enhancements.
Whether you’re planning to sell or rent, or you simply want to maximise your investment, the journey towards increasing your property’s worth can be both rewarding and challenging.
We’ll explore some key pointers on how to add value to your property, while also highlighting the potential pitfalls that should be navigated with care. From renovation tips to investment strategies, discover how you can increase the value of your property and avoid common mistakes along the way.
How to Add Value to Your Property
Adding value to your property can prove a smart investment strategy.
Whether you’re planning to sell your home, you want to increase its value for future financial security, or you’re trying to maximise your rental yields on an investment asset, there are several effective ways to increase property value and make it more appealing to potential buyers or renters.
However, some changes have more impact than others. It’s important to recognise that not all property improvements are equal in terms of their return on investment (ROI) and overall desirability to potential buyers or renters.
Firstly, location plays a crucial role in determining the impact of any improvement to a property. Properties in desirable neighbourhoods or areas with good schools, transportation links, and amenities tend to have a higher baseline value. Therefore, investing in renovations or upgrades in such areas often yields more significant returns, as buyers or renters are willing to pay a premium for the location.
Secondly, certain improvements have a more immediate and noticeable impact on property value than others. For instance, renovating the kitchen or bathroom can substantially increase a property’s worth, as these are key areas that potential buyers and renters often focus on.
Here are 8 top tips on how to increase property value:
1. Regular Maintenance
One of the best ways to add value to your property is through regular maintenance.
Before making any cosmetic improvements, it’s essential to address any structural issues your property may have. Cracks in the walls, a leaking roof, or a faulty foundation can significantly reduce the value of a property.
General maintenance plays a crucial role in making your asset more appealing to potential buyers and renters, as it leads to a number of benefits, including:
- Greater Aesthetic Appeal: Routine maintenance tasks such as painting, landscaping, and cleaning can improve the visual appeal of your property. A well-maintained exterior creates a positive first impression.
- Prevents Small Problems from Escalating: Regular maintenance allows you to address small issues before they become significant problems. Fixing minor leaks or cracks, and resolving electrical or pest control issues early can save you money in the long run and prevent potential red flags during a pre-purchase building inspection.
- Reduces the Number of Inspection Findings: Property inspections or combined building and pest inspections are a standard part of the home-buying process. If your property is well-maintained, there will be fewer findings on the inspection report. A clean bill of health from the inspector helps to reassure potential buyers and can increase the likelihood of a successful sale.
- Boosts Confidence in Buyers: When prospective buyers see a property that has been well-maintained, they tend to have more confidence in its’ overall condition.
- Negotiating Power: If issues are discovered during an inspection, buyers or renters may use these as leverage to negotiate a lower price, or request repairs or concessions. Regular maintenance helps you avoid such situations, giving you more control over the negotiation process.
- Faster Sale: A well-maintained property is likely to sell faster because it appeals to a broader range of buyers who are looking for move-in-ready homes. Buyers are often willing to pay a premium for a property that requires minimal immediate attention or repairs.
- Higher Valuation: Appraisers take property condition into account when determining its value. Thorough maintenance can therefore lead to a higher valuation.
2. Renovate Your Kitchen
The kitchen is often considered the heart of the home and a well-designed, modern kitchen can significantly increase the value of a property. Consider updating your kitchen with new cabinets, countertops, and appliances. Ensure that the layout is functional and open, as this can make your home more appealing to potential buyers or renters.
If you don’t have the budget for a brand-new kitchen fit-out, or to avoid over-capitalising, consider simple changes that have a big impact. For example, painting dated cabinetry and replacing the door and draw handles can completely transform a kitchen – and at a very low cost.
3. Revamp the Bathroom
Bathrooms are another critical area to focus on when trying to add value to your property. Outdated or poorly maintained bathrooms can deter buyers. Replace or paint overdated tiles and invest in new tapware. New grouting and proper lighting can also make a substantial difference to the overall appeal of your bathroom.
If you have the space, consider installing a bath if you don’t already have one. Installing a bath is a common value-add, as it’s an appealing feature for many people, especially families with children.
4. Create Additional Living Space
Creating extra living space can be a solid value booster. If you have an attic/loft or basement that’s currently unused, consider converting it into a bedroom, office, or recreational area.
Alternatively, you can explore options such as a conservatory or extension to increase square footage.
Furthermore, granny flats can provide a great solution to families who require disability accommodation or housing for an elderly relative. They are also ideal for people who are looking to generate an additional revenue stream, as they can be rented out (on either a short-term or long-term basis).
5. Ensure Your Fencing is Secure
A secure yard is a must for potential buyers/renters with children or pets.
Make sure your fencing and gates are secure and consider upgrading them if they’re damaged or look dated.
And consider ease of access for residents. Is there a pedestrian gate to allow access from the front yard to the back? Also, if your property is in a blue-chip area, it may be worth investing in automatic gates. Not only do they increase security and add another level of privacy, but they provide easy access in and out of a property and create a touch of elegance.
Decluttering is a relatively simple and cost-effective way to add value to a property in several ways:
- Enhances Visual Appeal: A clutter-free space looks more attractive than a cluttered one, helping to create a positive first impression.
- Maximises Space: Decluttering opens up the available space in a property. This can make rooms appear larger, which is especially important in smaller homes or apartments. If a buyer perceives that they are getting more space for their money, they may be willing to pay a higher price.
- Highlights Architectural Features: Removing clutter can accentuate architectural features, such as beautiful hardwood floors, decorative mouldings, or large windows.
- Improves Functionality: A decluttered home is more functional, allowing for an easier traffic flow throughout. It also makes it easier for potential buyers/renters to envisage how their furniture and belongings could fit into the space.
- Suggests a Well-Maintained Property: A clutter-free environment helps to create a perception that the property has been well maintained and is in good condition.
- Allows for Staging: Home staging is a technique where a property is decorated and furnished to showcase its potential. Decluttering is a crucial step in the staging process, as it provides a clean canvas for adding attractive furnishings and decor that can further enhance the appeal of a property.
- Positive Psychological Impact: A clutter-free environment can have a positive psychological impact on potential buyers, creating a sense of calm and order, and making them feel more comfortable and emotionally connected to the property.
Be sure to store away excess furniture and ornaments, clear all benchtops, and tidy your cupboards and drawers. If you don’t have sufficient storage space, consider hiring a local storage unit.
7. Upgrade Your Outdoor Area
Many homeowners, particularly in Perth, pay close attention to the style, functionality and shape of their outdoor areas when assessing the value of a property.
If your outdoor entertaining areas is quite outdated or unkept, it’s worthwhile updating the area with some brand new outdoor blinds or shade sails, custom manufactured to the specifications of your property.
8. Improve Energy Efficiency
In today’s eco-conscious and cost-conscious world, energy efficiency can be a key selling point. Be sure to mention any energy-efficient appliances, double-glazing, or solar panels in your marketing materials.
Be Aware Of These Pitfalls
It’s essential to do your due diligence and be mindful of market conditions and economic factors, as they can heavily influence your potential return on investment (ROI).
One of the most common mistakes is over-capitalisation. This occurs when you invest more money into improving a property than its market value can support, potentially leading to a negative ROI.
Also, some improvements may have a limited impact on property value. Over-personalised renovations – such as unique wall colours or highly customised features – may not resonate with a broad range of buyers or renters, potentially reducing the property’s market appeal. Similarly, extravagant, high-end upgrades may not yield a proportionate increase in value.
Consider which upgrades you can do yourself and which you’ll need to engage the professionals for. DIY projects can save you money, however, it’s important to be realistic about your capabilities, as poor finishes can limit your value-add potential.
Increasing Property Value – The Key Takeaways
The impact of improvements on the value of a property is determined by a multitude of factors. The location, the nature of the upgrades, and the preferences of potential buyers or renters in your area all play a key role in establishing real estate value.
Nevertheless, broader economic factors and the specific conditions of the local market can ultimately supersede all other influences, so thorough research is imperative.
To maximise the return on your real estate investment, it’s vital to carefully consider all factors and make informed decisions about which improvements to prioritise.
Contact Morley Canvas
Get in touch with our friendly team today.