How to Add Value to Your Property
When learning how to add value to your property, success hinges on strategic decision-making and informed choices. Whether you’re a property investor or just wanting to increase the value of your own home, understanding the fundamentals of property valuation is super helpful.
You can add value to your property through identifying opportunities for improvement, optimising returns, and mitigating risks.
From location to renovations, Belinda Botzolis has a knack for identifying what can add to or decrease the value of your property. Don’t renovate, build or invest without talking to her first. You can learn to understand the local property market, use innovative renovation strategies, and leverage her expert insights.
With over 130,000 followers on TikTok, Belinda joined Aaron to share more of the tiny details that distinguish true property value from superficial appraisals and reveals the secrets behind a valuer’s role and decision-making.
If you want to listen to the full podcast episode, you can catch it here. From conducting market analysis to avoiding common mistakes in property selection, we give you guidance for increasing your property value the smart way.
Guide Your Buyers' Agent Effectively To Add Value in the Long Run
Take it right back to the start of the property purchase process. Take control of the investment process and guide your buyer’s agent to align with your investment objectives and ensure your property will increase in value as time goes on.
While buyers’ agents can be helpful, avoid overreliance on them and take an active role in the property selection process by providing specific criteria and conducting your own research.
Provide clear guidelines and information to your buyers’ agent if you have one. Talk about your investment goals, property preferences, and selection criteria to ensure they find properties that align with your long term objectives.
But you’re paying them a lot of money to find you a property. You are in control. You can actively shape the property selection process based on a clear understanding of your own investment goals and market fundamentals.
Understand the Market Before Renovating
Understand your local property market, including demand, demographics, economic factors and infrastructure developments, before planning renovations to ensure they align with market trends and needs. You need to strike a balance between renovation expenses and potential profitability as renovating doesn’t always add enough value to your house.
Prioritise profit margin when investing in property, considering factors such as renovation costs, potential appreciation, and resale value to maximise returns on investment. Sometimes you can spend $500,000 in renovations and add $700,000 in value…but you could have spent $150,000 and made $500,000 in profit.
Conduct thorough cost-benefit analysis to ensure that your renovation expenses align with your property’s potential appreciation. You may not get a really strong capital growth given the demographics of the people living in the area, because property is only worth what somebody is prepared to pay for it.
It’s like a Rubik’s Cube. You have to keep fiddling with your budget. You could spend more, and could sell for more, but the profit gap actually closes.
Be Mindful of Overcapitalisation in Personal Home Renovations
Renovations play a pivotal role in adding value to a home, but it’s crucial to invest strategically.
When renovating a home, especially for personal use, be mindful of overcapitalisation by considering whether the added value justifies the cost of renovations. If you are prepared to hustle for a dollar when being overcharged at the cafe down the road, take that mindset and hustle for the best value for money that you put into your home.
When it comes to your own home, it’s always about your end goal with this property. Is this your forever home? Or will you eventually sell it to move on to bigger and better things? Align your renovations with your long term property goals. If you’re renovating for an investment and you’re planning on selling later, then every cent is vital.
Envisioning your home as a “piggy bank for money” reinforces the need to assess renovation expenses carefully to maximise returns.
Focus on High-Value Investment Property Renovations
For investment property renovations, focus on strategic updates that maximise return on investment (ROI) while minimising costs. Prioritise house renovations that add significant value to the property, such as improving functionality, aesthetics, and market appeal, while avoiding unnecessary expenses.
In investment properties, prioritising high-value cosmetic renovations can give you the most substantial returns when selling. Strategic renovations that offer the biggest bang for your buck, include new floors, new kitchen, repainting, and changing the light fittings. Focus on renovations that enhance aesthetics and functionality without needing substantial structural modifications like moving walls and plumbing.
When it comes to investment properties, just make sure that you have a good, clean, safe, functional home for your tenant. Don’t go over the top!
Provide Sales Evidence to the Valuer
In real estate, recent sales data holds significant weight in property valuation. Recent sales in your area within the past six months, within a similar range of 10-15%, can influence your property valuation. When seeking a property valuation, providing evidence of recent sales in your area can be beneficial, although it may not be the sole determinant of valuation.
If you have sales evidence that you want to present to the valuer, they should be open to accepting it. Providing evidence to support property valuation enhances credibility and helps ensure a fair assessment. Understanding market trends and analysing recent sales can provide valuable insights into property values, but that doesn’t mean that they will use that as gospel in their reports.
If you want more tips on preparing for a home valuation, we have you covered!
Need More House Renovation Ideas to Increase Value?
Increasing your property value requires a combination of strategic decision-making, market awareness, and active involvement in the value-add process. From conducting thorough market research to prioritising profit margins, take a comprehensive approach to increasing your property value.
If you would like to learn more about how to add value to your property or gain house renovation ideas, you can follow Belinda on Instagram or TikTok, or have a valuation done on your property by the expert herself.
Thinking of renovation to increase the value of your home? Whether you’re eyeing a complete home overhaul, a specific room upgrade, or even contemplating multiple phased renovations, the renovation loan experts at Atelier Wealth mortgage brokers are here for you at every step.
