Property investment | Tips to maximise return on investment
For most people, property is easily the most expensive thing you’ll ever buy, so it stands to reason you’d want to maximise return on investment.
Some may choose to buy, renovate and re-list it for sale to make a quick return, known as flipping. Even if you have more of a buy-and-hold approach, at some stage you may want to sell – and you’ll want to do so at the highest price possible for the market. That’s when capital growth becomes a reality. Here are some ways you can maximise the return on your property.
Maximise return on investment
Carefully planned renovations make a difference to your property’s value. Aim for improvements that will appeal to a wide range of buyers, making sure to use reputable builders who can be clear on a project’s likely cost. Local real estate agents can give you estimates of your sale price after the renovation.
Overcapitalising is a pitfall to avoid. This means money injected into renovations may not equal a higher selling price. Evaluate the cost versus the likely increase in the property’s market value to get the best result.
First impressions count
Love at first sight from the gate, through the front garden and to the front door, is a good strategic move. Prospective buyers may then overlook or compromise when it comes to other things on their property wishlist. Tidying paths, replanting grass, replacing guttering and repainting fascias are all relatively cheap and easy ways to create a positive first impression.
Spruce up where you can
There are small improvements you can make to prepare the property for sale, whether or not you choose to renovate. Painting fences, cleaning the driveway and adding a new letterbox can improve curb appeal. Repainting inside and out is a quick and easy way to minimise the visuals of wear and tear. Stick to light but neutral tones so the new buyer can imagine how the property would if they repaint.
Do the kitchen and bathroom
Generally, bathroom and kitchen makeovers offer a good opportunity to maximise return on investment but if you are thinking of selling in the near future you may wish to do a simple makeover instead.
Most new homeowners want to put their own stamp on their new home and will typically target the kitchen and bathroom first. Remove anything dirty or obviously outmoded, such as chipped or mismatched tiles, bad paint choices and ageing appliances. Chipped laminate or stained and dirty tiling grout should be cleaned or removed and renewed. If cupboard doors are plain and in good order, think about upgrading by simply adding new handles and a coat of paint. New tapware in the kitchen and bathroom have a similar ‘bang for buck’ effect.
Increase natural light
Good light in a house makes a huge impression, lifting the spirits of everyone who steps inside. Adding skylights to dark internal rooms or opening up areas with bi-fold doors or larger windows is always rewarded by a higher sale price and an improved state of mind for the owner while they are living there.
When selling a house or apartment removing curtains might not be practical in the long term but will make the house feel lighter and brighter during viewings and help maximise return on investment. The new owner can solve the privacy problems as they see fit later on. Mirrors also help achieve this objective.
Consider home staging
Home staging may add to the cost of your sale, but it can create a more ‘lived in’ look and give buyers a chance to see the property at its best. Your agent likely has contacts and ballpark pricing details for home staging consultants. Speak with the agent about the best times for inspections, and aim to hold them for when the interior receives plenty of natural light and is looking its absolute best.
Keen to know more on adding value to your property? Speak to our building experts today.
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