Today’s hot property market has spurred a dramatic increase in the number of Northern Territory investors buying homes, improving them and selling them for a profit.
It’s a business, and it can be a financially rewarding business indeed. But how can you be sure that you are making a sound investment? And how can you make sure you don’t overcapitalise the home?
There are many factors to consider when evaluating whether a property you have purchased with the intention of updating is going to provide a good return.
Of course, if you were to watch the numerous home improvement programs on television that flirt with the idea of making a 100 per cent profit simply by slapping paint on the walls and updating the garden and fence, then you could easily be fooled.
In reality, there are no guarantees that a new pergola will boost a home’s overall value – even in a hot seller’s market. It takes plenty of clever planning and research to ensure you are not misreading what the marketplace is demanding – and at what price.
Cosmetic touches certainly go a long way. Of course the most affordable is a new coat of paint which can instantly change the appearance of the home. Different colours can be used to create a certain mood. Other changes include new flooring, updated fixtures, windows, doors and a landscaped garden.
Beyond the affordable cosmetic touches but well short of embarking on major renovations are the home improvements that net full market value including a new roof, kitchen and bathroom. Enlist the professional services of the HIA National Kitchen and Bathrooms member – a group of qualified designers who will help you create the kitchen or bathroom of your dreams.
It’s important to note that updating one bathroom and not the other, or landscaping the front yard and not the back will only alert buyers to what is left to be done instead of appreciating what has been done.
Visit open house inspections in the neighbourhood and keep a tab on the sale price so you get a good understanding of what people are expecting to pay.
When looking at a home to update for profit, you’ll need to consider its location and the surrounding homes. If you are extending the home, it’s important it blends with the home’s existing features and that of the other homes in the street.
Renovating for the purpose of reselling for a profit can be good business, but only if you’re willing to do your research and carefully evaluate the marketplace. Speak to a HIA builder to advise you as to what can be done to improve the value of your home.
And remember, if you’re contemplating structural changes to make a home more saleable, be aware that poor workmanship will not add value to your home and may in fact reduce the price you achieve! Avoid tackling jobs yourself that are best left to the professionals.
To be guaranteed of quality results, use a qualified HIA member who will ensure your job is carried out in a timely and professional manner.
HIA Executive Director
Housing Industry Association