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 Group