How to add value to a home

Adding value to a home can be easy but it is also important to avoid mistakes.

Tired and dated homes have struggled to win over buyers in the past 18 months, but could be set for a renaissance this year.

PropTrack economist Anne Flaherty said in the past, many buyers, particularly market entrants, wanted a fixer upper where they could add some value.

“But now we are seeing people wanting a property where not much needs to be done, one where they can just move in and they are good to go,” Ms Flaherty said.

In part, this has been driven by the surge in material and tradesperson costs last year. But with demand for both likely to taper this year, fixer uppers could soon be back in favour.

Easy wins

Ms Flaherty said some improvements would provide a “bigger boost” than others.

“A really good example is the bathroom,” she said.

“If it looks a bit dirty, that can have a big impact on someone’s willingness to purchase.”

Advantage Property Consulting boss Frank Valentic advised looking at wet rooms and kitchens for renovations, and where possible adding an extra bedroom, bathroom or living room to floorplans – without going to the trouble of an extension.

“An extra bedroom will generally get you an extra $100,000 in price,” Mr Valentic said.

He said that if you intended to live in a home, but not long term, putting in an application for a subdivision or even arranging plans and permits to redevelop the block could often deliver a six-figure bonus for a relatively small outlay.

Spotting a winner

MaC Consultants managing director Matt Richardson said over 10 years of general building project management he had learned to appreciate a 1960s or ’70s-built house with daggy carpet, as well as apartments of the same era.

“They are very good from the point of view of having a sturdy build,” Mr Richardson said.

Beyond this, he advised buyers to “steer clear” of balconies of any vintage.

A tired facade could also easily be refreshed with a “lick of paint” and a dud garden renewed for an instant impact.

Mr Valentic advised seeking floorplans with an open-plan kitchen and living zone – or easy scope to create one.

“If you can open up a wall for an open-plan living space, you will probably make more money straight away,” he said.

But buyers looking to flip, or even for a family home they could add value to, should avoid those that need restumping, rewiring, replumbing or reroofing.

Do the sums

Mr Valentic said the goal should be to find a “rough diamond” that only needed polishing, and to get it cheap.

That usually meant buying off someone who needed to sell fast – something a good buyer’s advocate could help with.

Before you buy, he suggested hiring a feasibility consultant to run the numbers for you.

After that, the goal should be to minimise costs. He suggested DIY and co-ordinating tradespeople yourself rather than hiring a builder to manage them.