|September 4, 2017||No Comments|
There’s a rule of thumb when renovating that you should aim to add three dollars back from every dollar you spend.
This three-for-one rule quickly shows if your return on investment (your precious money and time) was worth the effort.
So if you want to inject more dollar signs in your property’s sold price, knowing where not to spend your money is super important.
We ask a few avid investors and renovators to answer this burning question: What are five housing features that add little or no value to most properties?
Orsolya Bartalis has bought property since the mid-1990s and has completed development and renovation projects. She also mentors others on the property investment process.
“When looking for return on investment, I like to get $3 dollars back for every dollar invested,” she says.
5 features that add little value to property
1. Swimming pools
“I am sure you have heard this before but here it is again. Swimming pools are a large investment, and they will not give you a bang for your buck,” Bartalis says.
“While you may like it, others possibly think ‘hassle’, ‘danger’, ‘expensive to maintain’ and the likes.
“If your area is bustling with young families, you may find they turn down a perfectly good home because of the swimming pool, so if you don’t already have it, don’t use it as an upgrade to try to make a sale.”
Christine Williams, Principal of Smarter Property Investing wholeheartedly agrees.
“Even if you don’t decide to get in a professional in a bid to save money, if you don’t feel confident in what you are doing it can end up taking you twice as long.”
“Swimming pools may seem like a great idea at the time, especially if you have just come back from a fun holiday where there was a pool, however this truly can be a costly addition,” Williams says.
“When selling, it can detract from a potential group of buyers, i.e families, the elderly, and potentially property investors.
“The reason for this is the type of tenant it (a pool) will not attract due to maintenance, public liability, insurance and local government laws regarding fencing and safety barriers.”
2. Extravagant fittings and fixtures
“With the rise of renovation shows on TV, where contestants have exorbitant amounts of money to spend on renovations, we have seen all sorts of high-end products being introduced to try to win points.
“But while the latest purple Smeg stove could be what you fancy, with a personalised backsplash made with cow hide and gold trims, this may not be the style your buyers are looking for … so unless you are selling to a highly niche market, the fixtures and fittings will not give you a good ROI if you spend big bucks on them.”
3. Things you cannot see
If you can’t see it, it’s unlikely to boost your return, Bartalis says. This includes wall and ceiling insulation, double glazing, new air-con systems and stumps.
“They are great to have so if you want to add them to your long-term home, please do so. But do not install them as a selling feature as most people expect they are there and are in good working order. But if they are not there, that is fine too.”
Craig Heppell, CEO of Agent in a Box, has worked in marketing and selling property for almost 14 years and agrees air-conditioning does not add value to a home for sale.
“Yes, in our subtropical regions air-conditioning is a must,” Heppell says. “However, adding a nifty split-system for, say, $1,000 does not increase the value of a property by $5,000 as a number of home sellers believe. This type of feature can add to the marketability, not the value.”
4. Fancy landscaping or no landscaping
“When it comes to the garden, you need to find a balance. No garden is a big turn off, just as much as a highly manicured garden,” Bartalis says.
She recommends a basic make over as the surest way to make money back from your outdoors outlay.
“Make sure there is some lawn and a simple, easy to maintain garden design. Do not go overboard with water features, cladding, hidden gardens, paving and the like.”
And don’t think your rare and/or edible botanicals instantly add to your riches at sale time. Fruit trees may produce fine marmalade, but do not automatically give vendors money for jam, according to Heppell.
“They’ll says things like ‘down there, I have a lime, over there a lemon, just put in an avocado and the bananas are the best you will ever taste’ … I have lost count of the number of sellers who expect that the ‘trees’ will be the big seller and add serious value to the property,” he says.
“Unless your property is a working orchard, the average buyer will respond with a resounding ‘meh’ if a guided tour of the fruit trees takes precedence over the benefits and amenity the property actually provides.”
5. Sub-par DIY work
It’s easy to get a false sense of what a layperson with a hammer and paint can achieve. Who wouldn’t get enthused by all the money to be saved on labour? That’s not to say homeowners cannot go-it-alone on some minor cosmetic improvements and do a very neat job of it.
But doing a less-than-average job can cost you dearly. Dodgy tiling and painting is easy to spot at home inspections. Half-finished jobs devalue a house.
Even if you don’t decide to get in a professional in a bid to save money, if you don’t feel confident in what you are doing it can end up taking you twice as long to get the desired finish. Those hours will hold up getting your property to market.
“Electricity and plumbing will also need the sign-off sheets from the professionals for the jobs completed so before you begin, think about what jobs you can truly do well,” Bartalis says.