19 Feb AUCTIONS AND OVER-RENOVATION
In Australia, spring is usually the time when vendors are eager to get their properties sold – so eager that they want to do ‘this and that’ and then hope for a fast sale and a big return. Don’t let this dampen your enthusiasm, but things won’t always turn out as you expected. For some, the spirit of spring is short-lived: when expenses are greater than gains, the atmosphere becomes a cool winter.
Over-renovation can be illustrated financially: it’s when you spend more money to improve your property and not recouping that money when you finally go on the market. When you’re paying more money to get your personally desired improvements done, you have the symptoms of over-renovation.
Note that the operational phrase is ‘your personally desired improvements.’ This means that you’re not supposed to carry out a renovation project using your subjective judgment. So what do you need to consider before embarking on a property makeover project?
Check the neighbourhood
If other homes in your neighbourhood have granite countertops in their kitchens, for example, you don’t have to install a marble countertop on yours just to be different. What you perceive as a unique selling proposition may become a challenge as it will unnecessarily affect your property’s sale price return.
Stick to ‘the basics’
‘The basics’ are a collection of features that buyers expect when buying a home. This means repaired walls, functional gutters, clean downpipes, leak-free roofs, and attractive floors. Yet having the so-called basics may not even be enough for some. This takes us to our next point.
Analyse your target audience
What type of individuals will be interested in your home? What’s their range of income? Why do they prefer your neighbourhood? What kind of lifestyle drives them to look for a property such as yours? Your target audience will have a significant amount of in-common expectations from your property. These set of expectations will generally drive the direction of your home renovation.
A note about street appeal
Repainting the exterior of your home, investing in landscaping, and sprucing up your garden, are only the start of a few of the things you can do to boost your home’s street appeal. But note that in most cases, boosting street appeal does not directly add to your property’s post-renovation value. What it does is it helps speed up the sale of your property and increases competition so it’s very important.
Keep your personal preferences in check
You might be investing in an addition to your home that your prospective buyers will not be willing to pay for. Simulating a department store scenario, buyers are not likely to buy an item if it comes with a feature that they ‘do not need or want.’ That happens because the inclusion of such feature is perceived to have contributed to the item’s final retail price. What can you do then?
Work with professionals
Learn to trust what professionals can do when it comes to property renovation. In fact, that’s the best thing that you can do if you’re unsure about going DIY. It’s one of the ways to prevent over-renovating and losing money in the end.