Renovating Property in a Buyer’s Market
Thinking a renovation might give your property the edge in today’s buyer’s market? Renovating is a great way of adding value to your home. But like most creative projects renovating can be frustrating and stressful that’s where a Loan Market mortgage broker can help.
Depending on the size of your renovation project, you could need anything from a few thousand to hundreds of thousands of dollars. If you already have an existing home loan then a Loan Market Mortgage broker will help you explore a number of competitive refinance options.
- Redraw Facility For smaller projects such as a new bathroom or sun deck.
- Loan top ups For small to medium sized renovations
- Home Equity loans For medium sized projects such as a kitchen or pool.
Before starting your renovation project, there are some matters to consider:
- Research your local market: how have sales of renovated properties compared with sales of original-condition properties? If poorly, you will need to exercise a great deal of caution when deciding whether and how to renovate.
- Be wary of over-capitalising a property located in a mortgage fringe area, as the amount spent on renovations may not translate to real market value.
- Who are the potential buyers of the property? Renovate to your target market.
- Is your block big enough to extend the dwelling? How much land are you willing to give up’?
- What will your council allow? Research zoning, permits and restrictions first.
- Your location is an important factor to consider: a good location adds value
Here are some examples of types of renovations that increase the value of property the most:
- Bigger, updated kitchens a large walk-in pantry and German appliances attract a premium
- Large bathrooms minimum of two including ensuite with separate bath and shower
- Restoration of a home’s period features
- Modernising updates to a non-period or limited appeal home
- Outdoor entertainment areas, including outdoor rooms’
- Additional living spaces, e.g. rumpus room, home theatre room
- Car accommodation especially in inner-city areas. Basement car spaces attract a premium
- Floor-plan and layout changes to increase functionality and flexibility, C-Bus electrical system
The general rule is don’t overcapitalise, and don’t spend more than 40% of your home value on renovations. Do your research and take your time when considering renovating for value; there are many variables which decide the value of a renovated property, and the goal is to profit from your renovation effort.
Article by: Greville Pabst, CEO, WBP Property GroupTags: Home equity loans, Loan Top ups, redraw facility, Renovation Loans