As an astute homeowner, your job is to consider both what you can do to improve a property value, as well as what you may (inadvertently or otherwise) be doing to decrease it. Renovations and repairs often pay off to varying extents, but in some cases, you may just have to put up with some of the things you don’t love about a property. Now that does mean letting a house slip into disrepair; this is a sure-fire way to decrease its value. Whatever path you do choose, it’s crucial to be aware of how you’re affecting your home’s bottom line and to understand what can be done to raise it back up to create real equity.
One of the main things to remember while trying to boost a property’s value is that people have a wide variety of tastes, and those tastes may vary considerably both geographically and demographically. A house with the flexibility to suit a big slice of the population pie will be more in demand than one which has been highly customised to one particular lifestyle. For example, a room converted into a gym with rubber flooring and equipment bolted to the walls will probably not appeal to everyone. Remember the more people who find a house attractive when it hits the market, the better off you’ll be.
As a result, we created the following list of our top 10 things we often see which causes properties not to achieve their maximum value, and what if anything homeowners can do about them.
10 – Lots of Comparable listings
The housing market rises and falls, and if you’ve tried to unload a home at a decent price during the real estate chaos that occurs during one of the lows, you’re probably all too aware of how difficult that can be when the market is flooded. The more comparable homes on the market, the harder it is on your house’s particular value, especially when buyers are scarce.
It’s even worse if your home is located in an area where lots of homeowners have failed to pay off or unload the property. Living in a neighbourhood that has seen many foreclosures or short sells is bad for your home’s bottom line
As a property owner, it’s important to keep an eye on the market and get regular updates on where property prices are headed. Good mortgage broker like Awesome Lending Solutions often provides free property reports to help your eye on the markets and make informed decisions so you are not caught out.
9 – Neighbourhood Conditions
Apart from nearby foreclosures, other aspects of a neighbourhood can detract from how much buyers will be willing to offer. If you live by an airport or train tracks, for example, the resulting noise pollution might devalue your home. Light pollution from a nearby highway or athletic complex could make buyers wary, too. Power plants and landfills are bad news, too. They’ve both been proven to affect home values negatively.
In these sorts of situations, you can often do simple things to limit the devaluation of the property. For example with sound pollution, insulation and double glazing and simple fences can make a huge difference once you are inside. Similarly, with light pollution, the addition of shutters or blinds can both reduce the impact of the light and also make a property more aesthetically pleasing.
Other factors like a mobile phone tower being built nearby or the introduction of less profitable business or a general property maintenance dropping in an area can have a huge effect. For example in one particular area in Sydney, several large governments owned apartment building were abandoned due to fears of asbestos contamination. The result was unmaintained properties that attracted high levels of graffiti and vandalism. The result was a drop in the value of the surrounding property due to the poor aesthetics.
Times change and so do neighbourhoods, and if yours has gone downhill, the value of your home could suffer. If this is the situation you are left in it could be time to review and consider selling and purchasing in another area or waiting for the re-gentrification of the suburb
8 – Local School Areas
If the schools in your area aren’t healthy and flourishing, that could be driving down the value of your home. It’s very common for home buyers to want to move to places with highly rated schools. People with children will usually be especially cognizant of the quality of the schools in the areas they’re targeting in their search. Other buyers, aware of the impact schools can have on property value, may make it a consideration as well.
There’s not an awful lot you can do to improve a school’s reputation. However studies have found that schools with involved parents often perform better, so if you are living in the area consider things like getting involved with your local P&C or volunteering.
If you’re looking to sell or rent out a property, obtain a copy of the local government map showing which schools the property is in the catchment area of. Consider contacting the school and asking for an information brochure. Many will happily do this and you may be surprised by the extracurricular activities being run by the school.
7 – Neighbours
Before a potential homebuyer can get to your house, they may need to walk or drive past your neighbours’ and this can affect your home’s value in a multitude of ways.
It’s amazing how things like an argument over exactly which blades of grass encompass the essential property line can sour neighbours against one another. Importantly many buyers feel like those arguments may spill over to them as the future owners, with the result that they may decide not to make an offer or significantly reduce it. If it’s apparent, you have a dispute with the people next door it may be time to swallow your pride and agree with your neighbour until the properties sold if it is minor. If it is something serious try to have all the facts available, for example, a dispute over the colour of a fence or the choice between wood or steel might be driving you crazy, but some buyers may not care at all.
Another issue that can crop up is colour-blindness — your neighbour’s colour-blindness. If you’re one of those unlucky people who have a poorly pigmented house in your neighbourhood, it’s doing more than giving you something to grumble about when you pass it on your morning jog. That eyesore is driving potential buyers — and potential dollars — away as well.
We had one client who supplied the paint and helped the neighbour repaint the front of his house because the couple of hundred dollars and one weekend of work to cover the 1980’s inspired houses colours added thousands to his house when it came time to sell. I would add he was on excellent terms with his neighbours who more than happy to accept the help.
You could consider doing the same for a nearby unkempt lawn. Very few people will turn down the offer of having their lawn mowed and that half hour of your time again could add thousands.
6- Street Appeal – The Yard
Pull up in front of a property and what’s one of the first things that catches your eye? The yard or lack thereof can make a huge difference. If caring for the garden isn’t one of your priorities, it can make your house harder to sell when the time comes. If you have a unit have a look how often the gardener comes to do the common areas? After all, high kerb appeal is essential to sell a house or unit.
An old shed or rotting fence will also affect your home’s value, and while you may love the 100 gnomes or the ten foot tall Venus de Milo fountain, can all reduce the overall appeal of a property. Even things like pools, ponds and waterfalls could decrease the value of your house, especially for buyers with small children or for green thumb types who are looking forward to developing a new yard for themselves.
Also, just like clothes and cars, plants come and go in trends. What was all the rage a few years ago may make buyers hesitate, so it could be worth your time to look into what’s currently popular in landscaping? Generally speaking, people may be looking to avoid quick-growing, high-maintenance plants, those that make a mess and could draw complaints from neighbours and greenery that could damage masonry and other home components.
For unit owners, there may not be a lot of scope for improvements, but consider joining the strata committee who is the one making decisions on how often the gardeners come and who the contract is given to. For example, with one particular unit complex, we know of just changing the gardening from two days once months to one day each fortnight made a huge difference.
5 – Street Appeal -The Paint
Needless to say, colour plays a big part in street appeal, and if your house is in desperate need of a fresh coat, that flaw could be wreaking havoc on your home’s value. Just like the effect a poorly maintained yard can have on potential buyers, paint that’s old, faded, cracked or peeled can give people negative feelings about a house.
Even if you spend time and money repainting your home, a buyer might still be put off by the colour (or colour scheme) you choose. If you’re planning on painting, your best bet is to pick traditional home colours to appeal to the largest buyer base possible. Neutral colours are the most widely used; white, grey, blue and various shades of beige or cream are good bets. Front doors are the main centre of most houses, so pick that colour with care as well.
If you’re worried that your house’s paint job is a little lacking, it’s a good idea to ask friends and family to recommend two types of professionals — a housepainter and a colour consultant. You may be able to find one person who can fulfil both services for you.
Again for a property owner with the unit, we would recommend joining and actively participating in the strata committee.
4 – Interior Aesthetics
First impressions count, take a quick look around the property. Is it cluttered with your possessions? Are there pictures of your family adorning every wall? Is the home dusty or dimly lit? These issues are easily remedied, but if you don’t find the time to take care of them, you may have trouble selling for your asking price.
Consider putting some things into storage for a few weeks. Reducing the clutter will help give the property the feeling of more space. At the other end of the scale, if the property is currently empty, consider renting some furniture. Just having some furnishings will help potential buyers be able to envisage what living in the property will be like and add a feeling of warmth.
A fresh interior paint job is a good idea too, although again, don’t get too wacky. Odd colours, weird wallpaper and bad flooring are likely to look like a headache to potential buyers, rather than selling points. If your home is lacking in storage space, that also may be a point of contention.
Warm and inviting — and not overly lived in — are what you’re going for.
3 – Repairs in Arrears
If your house is in need of a serious repair, like a leaky roof, busted plumbing, or a mould problem, then that will most certainly be a point of contention. You need to get major repairs sorted out or risk shaving off a significant portion of your asking price; otherwise, you’re just asking future homeowners to foot the cost. They won’t.
Get a professional to do the job if you’re not confident you can make the repairs yourself. Shoddy DIY work will turn off many a buyer. From stained ceilings to leaky taps, all these things can affect how much purchasers are willing to shell out. It’s time to get those last few troublesome items off your to-do list.
2 – A Kitschy Kitchen
Once a potential home buyer gets inside, one of the rooms he or she will examine most carefully is the kitchen. Because of this, people often consider it a good move to remodel and renovate their kitchens — but they meet with different levels of success. Two reasons for only ho-hum success for this is that a homeowner may personalise a remodel too much, or go too high-end with it. Installing a huge stove top grill might be just what a fellow avid carnivore is looking for, but what about a vegetarian or someone who doesn’t like to cook? That person won’t be interested in compensating you for the value of that addition.
Some renovations in the kitchen that typically meet with more success include the sink, countertops and cabinets. A sparkling new sink and modern cabinet design can make people take notice. But if areas like your countertops or backsplash are outdated or stained, it can detract from the value of your kitchen. Think of it this way: People don’t want constant reminders of past occupants in a home they buy, so if you’ve made any significant marks, you’ll want to start erasing them pronto.
While a kitchen remodels can be challenging, if you take it step-by-step, it’s a project you usually can accomplish on your own. On the flip side, if you’re not exactly handy with a hammer or drill, you better call in a professional to get the job done. Getting quality improvements in the kitchen can add some value to your home; paying for poorly done repairs and renovations will only burn a hole in your wallet.
1- An Abused Bathroom
The bathroom is another room where you may want to pay some attention, but again, be sure to tread carefully. While you want to make sure you enjoy the fruits of your labour — especially if you aren’t planning on moving anytime soon — you want to ensure that lots of other people will like it, too.
Bathroom renovations and additions can help increase your home’s value, but going overboard with items like gaudy faucets, garish wallpaper and ill-chosen paint can be an easy trap to fall into. Sticking to mainstream and tasteful features will serve you better. If you do plan on moving, but not for several years, understand when that time rolls around, you might want to check out the current bathroom styles to see if yours is still in style or if it needs an updated look. If wallpaper were the route you took, you should probably expect it to take away some of the value from your home unless you already intend on taking it down yourself and repainting in preparation for the market.
New flooring can also be a good move, especially if there’s been any damage, but carpet should be avoided, as should vinyl flooring. (This is true for the kitchen as well.). Some good options would be hardwood floors or various types of tile.
Last but not least, don’t forget to give some thought to the toilet. People can be pretty picky about toilets. As in the kitchen, they aren’t looking for reminders of past owners.
We hope this helps you keep the value of your property up and gives an insight into how to create equity in your home or next investment property.
If you would like more information on how to add value to your property why not contact us