TO REN­O­VATE OR NOT TO REN­O­VATE BE­FORE SELL­ING?

Wangaratta Chronicle - North East Property Guide - - NEWS - view.com.au in Buy­ing

Once a de­ci­sion has been made to put a prop­erty on the mar­ket, thoughts turn to how to get the best re­turn on your in­vest­ment. To ren­o­vate or not to ren­o­vate? This is the ques­tion ven­dors of­ten ask, how­ever, the an­swer is not al­ways straight­for­ward.

Pre-sale ren­o­va­tions gen­er­ally in­crease the de­sir­abil­ity and value of a prop­erty and are some­times nec­es­sary to put a prop­erty on par with com­pa­ra­ble prop­er­ties on the mar­ket in the same area. If plan­ning to spend the time and funds on a makeover though, it is cru­cial to re­search and plan in or­der to get it right. En­sur­ing any changes ap­peal to a large per­cent­age of prospec­tive buy­ers, in ad­di­tion to meet­ing the needs of the prop­erty’s tar­get mar­ket, will help to make any work done a valu­able un­der­tak­ing.

Here­with, some fun­da­men­tal (but of­ten over­looked) rules to help ven­dors de­ter­mine whether ren­o­vat­ing prior to sale will be a prof­itable ac­tiv­ity.

Don’t spend more than you can re­cu­per­ate – De­cid­ing whether or not to in­vest in ren­o­va­tions prior to putting your prop­erty on the mar­ket, and how much you should spend if you do, is a tricky de­ci­sion. If you spend too lit­tle your ef­forts may look cheap and de- feat the ob­jec­tive of ren­o­vat­ing in the first place. Spend too much and you may not re­cu­per­ate what you’ve in­vested come auc­tion day. The gen­eral rule is, if you can make $3 for ev­ery $1 you spend it’s prob­a­bly worth­while.

Kitchen and bath­rooms are the place to spend money – Kitchens and bath­rooms are two ar­eas of a house that tend to have the largest im­pact on sale prices, so it can pay to up­date these rooms prior to sale. With this said, these types of ren­o­va­tions can be costly. At min­i­mum, en­sure both your bath­room and kitchen are in a func­tion­ing or­der and present well.

Fac­tor in mar­ket con­di­tions – It’s im­por­tant to select an agent who has ex­pe­ri­ence not only sell­ing in your area, but more im­por­tantly, in your sub­urb. A knowl­edge­able agent should be able to ad­vise on com­pa­ra­ble prop­er­ties for sale in an area and in­di­cate how worth­while a ren­o­va­tion to your prop­erty would be. It makes good busi­ness sense to keep your prop­erty within an equiv­a­lent price range to oth­ers in the area, but with some stand out fea­tures.

Street ap­peal – Front of house is im­por­tant when it comes to real es­tate – spend time clean­ing the win­dows, clear­ing gut­ters, paint­ing where nec­es­sary and tend­ing to the gar­den. These mi­nor al­ter­ations can have a sig­nif­i­cant im­pact come auc­tion day.

Judge taste – If you choose to ren­o­vate, re­mem­ber you are do­ing it to make the prop­erty more at­trac­tive. There­fore, in or­der to ap­peal to the masses it’s best to stick to neu­tral colour schemes and clean lines.

Don’t nec­es­sar­ily go the whole dis­tance – Some­times a good spring clean and a coat of paint is all a prop­erty needs to at­tract more buy­ers. Again, mak­ing this de­ci­sion comes down to analysing first whether or not you can re­cu­per­ate what you spend.

When it comes to mak­ing the de­ci­sion over whether or not to ren­o­vate, it is im­por­tant to bear in mind that a ren­o­va­tion does not nec­es­sar­ily guar­an­tee a profit. By do­ing some re­search and work­ing closely with your real es­tate agent you can en­sure the dol­lars you in­vest will be re­couped come sale day.

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