Posts made in June, 2016

Things people add to their property that really don’t add value

Posted by on Jun 7, 2016 in Selling | 0 comments

Many people fall into the trap of doing too many renovations or fix-ups on their property with the desire to add value to their property before sale. More often than not, these additions never add value to a property but rather make it harder for you to recoup your costs.

front-of-house2-afterWfront-of-house2-beforehile many of these additions will make sense for you if this was your personal residence, you should not expect buyers to pay a premium for them. Even though some additions are known to add value, if they are not already a part of the property you will likely spend more on adding them, than you can recoup for having added them.

When selling, we’ve found that doing the basics of getting the property up to par with the rest of the neighbourhood and maybe adding some curb appeal (fresh lawn, clean garden and floors) will typically be enough to sell at your expected price.

Let’s take a look at the typical things people add in hope of increasing property value that really don’t add value:

Additions that you cannot see

Buyers will not be willing to pay more for a property just because you recently upgraded to a bigger hot water system. As a private dweller you may have noticed a difference with this upgrade but a buyer will just see this as typical maintenance of the property and not as a value add.

We find a similar thing with installing air conditioning systems. Brad from our preferred supplier for air conditioning installations in Perth – Stinson Air says, even though in our hot climate here in Australia we’d place air conditioning in the must have category, they still fail to add value to a property. No matter how much sellers try to justify it, a $1,000 split-system air conditioner never adds $5,000 to a property.

Swimming Pools

Apart from eliminating a large portion of buyers i.e. first home buyers, the elderly and property investors, pools are usually a deterrent to sale, mostly because of maintenance time and cost.

Many real estate agents agree; whether a potential buyer sees it as a hassle, a danger or an expense, a buyer will turn down a property for these reasons more often than they choose a property because it has a pool.

Over-investing in a property

Out of the norm investments or major additions to properties that are not typical for the neighbourhood are risky. Whether it’s whole room remodeling or a second story addition, major overbuilding can make it hard to recoup costs unless other houses in the neighbourhood follow suit. This is mainly because buyers are not willing to buy a $750,000 house in a neighbourhood that has an average house price of $400,000, they risk purchasing an overpriced house and reduce their resale value.

front-of-house-before Beforefront-of-house-after After

 Curb appeal: They added 3 plants, watered the grass and painted the gutters and brick feature.  That’s all!

For the best return on investment we rarely see any reason to overbuild past the norm for the neighbourhood. This also goes for fancy fixtures inside the house. Even though those fancy lights may look good (to you) they do not ‘add’ value and you will be pushed to even break even on these types of inclusions.

Beyond basic safety fixes and simple curb appeal, property fix-ups and additions rarely add value. Be smart and choose your properties and the work you do on them wisely.

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