The Reserve Bank of Australia has left the official cash rate on hold at a record low 1.5 per cent at its first meeting of the year, citing continuing concerns about weak household consumption.
“Flipping” might be the new word on the block but Australians have long been part of the reno revolution. Some are looking for fast returns (the flip), while others are upgrading after being in a home for several years. Whichever your strategy, chances are the goal remains the same: to renovate for profit. Here are some tips to ramp up your returns.
Start with the end
What’s the micro-market in which you’re selling? Each suburb, and even a neighbourhood, has a price ceiling. Knowing that ceiling, and working within it, will help you avoid over-capitalising. Pay attention to local sales and visit open houses to check the quality of what’s on offer, the type of buyers the market is attracting, and what they’re prepared to pay.
Head over heart
This is a numbers game so renovate rationally, not emotionally. It’s easy to get carried away with the latest trends but adding value means making budgets and sticking to them. Renovators tackling lick-and-flicks often determine budgets based on final sales estimates. One rule of thumb is to spend no more than two to six per cent of the property’s value on refurbing the kitchen and no more than two to three per cent on the bathroom. If you’re aiming to sell for $600,000, then cap your kitchen spend at $12,000 and your bathroom at $9,000.
Add an extra room
You only have to scan real estate markets to see room count still matters. In other words, three-bedroom properties are usually in a price bracket above those with two. Talk to a local agent to find out how much you could fetch if you extended up or out for an extra bedroom or two. If the maths stacks up, see what other spaces you can bundle in – an ensuite or a family room – to maximise your return on investment.
A fresh coat of paint – inside and out – can give you the biggest bang for your buck. Most of us can manage a brush and roller and paint transforms in an instant. Buyers will bring their own décor style so keep colour schemes smart, but safe. Any soft neutral pops against crisp white or cream trim, creating a clean canvas for art and accessories.
Doors are another great value-add. Repaint or replace daggy doors, including wardrobes, and replace old handles. Your front door makes or breaks a first impression, so invest in one that makes the right statement. And don’t forget your garage doors. If you have old manual levers or rollers, replace them with new automatic or remote doors.
Super-size your space
Storage sells, especially if renovating for a family market.
- Install floor-to-ceiling closets in bedrooms that have none, and re-organise existing wardrobes with shelves, shoe racks and extra hanging rods.
- Sort your garage with racks and hanging hooks for bikes, camp gear and tools.
- Create a storage nook in your ceiling – don’t forget pull-down stairs for easy access.
- Build a carport – buyers then have the option to use the garage for storage, or as a rumpus or entertainment area.
Let there be light
Natural light wins out over darkness every time, so look for ways to let more in, especially if the living areas are a little dim. Can you knock out a wall to let light through? If privacy is an issue, consider a skylight over stairs or wall-length windows above eye level to brighten things up.
Keep it simple
In our time-poor society, low maintenance sells. Replace dust-collecting light fittings with energy-efficient downlights, minimise lawn areas to reduce mowing, opt for dark tile grout over white, and rip up carpets to reveal timber floors or replace with tile, bamboo or timber-look laminate.
We love to bring the outdoors in, or is it take the indoors out? Either way, opening your living room onto an outdoor entertaining area with floor-to-ceiling bi-fold doors is a winning renovation. So too, is adding or extending a deck and transforming a tired patio into a more contemporary alfresco zone.
Plant for profit
Trees can lift the look of your home and its value. They create privacy and shade, help attract birds, and create a sense of tranquillity and establishment. Consider fast growers like lilly pilly, photinia robusta and clumping bamboo to screen your backyard.
And don’t forget your streetscape. Planning research1 indicates some focus foliage out front can add thousands to a home’s value. Give your property a leafy lift with a crepe myrtle, Japanese maple, frangipani or an evergreen ash.