When not to renovate
Well-planned, cost-effective renovations can add value to a home, however there is always the risk of over-capitalising. So ensure the amount you invest in the renovation is less than the value you’re adding to the property, and the sale price you’re likely to achieve.
Here are some examples where we wouldn’t recommend renovating if you’re looking to maximise your sale price.
Check your margins
If your property isn’t in desperate need of repair and you’re confident you have a decent amount of equity existing in your property, renovations may not be necessary.
A general rule of thumb when it comes to renovating a property for profit, is to spend no more than 10% of the property’s value on the alterations. So, the first step would be to ensure you have an up-to-date valuation of your property, undertaken by a professional.
Do you need a quick sale?
Most renovations take time, to plan and budget for as well as to be completed. So, if you’re looking to sell soon, renovations may not be possible. Remember too, that renovations often go over budget and can take longer than anticipated so factor all these considerations into your decision.
Who are you selling to?
What is the demographic of your property’s neighbourhood? Mostly singles and couples? Mostly retirees or mostly families? Finding out who the neighbourhood is likely to attract will help you determine suitable renovations and not so suitable ones.
For example, if your local market is likely to attract families, think carefully before adding stylish but potentially hazardous staircases, or ornate glass features. Or if your potential buyer is most likely an investor, keep renovations to a minimum as they will almost certainly have their own plans and your changes may add no value to them at all.
Ask if you’re unsure
When planning a renovation, ask your local real estate sales consultant for their opinion on the condition of the property, the type of buyer the home is likely to attract, what similar homes in similar condition are selling for and any renovations they would recommend.
If your home isn’t in need of massive renovations your sales consultant will tell you and you may save yourself a lot of hassle, time and money.