The objective of any property investment is to increase its value. You want to make it worth a lot more than it was when you bought it. There is a myriad of things you can do to any property to make it more valuable. Whether you plan on selling it, renting it out, having it revalued, or keeping it for posterity, a highly-valued property is one of the best assets you can own.
The tips below will help you squeeze more return from your property investment, from buying it to improving it through renovating and decorating. Some of them are quick fixes you can accomplish yourself, while others are more costly and may require professional work.
Choosing a Property
Some properties, no matter how much work you do to them, will never generate a return on investment. That’s why it pays to be smart when you buy. How can you pick the right property to give you the high ROI you are looking for?
- Determine your goals
Obviously, your primary goal is a return on investment, but it can pay to be more specific and clear about what you want from your property. How much income do you hope to generate? Over what period? Do you plan to sell? If so, when? Having a strategy for your investment will enable you to act more intelligently when buying your property. There are plenty of online tools you can use to help you forecast your ROI.
- Pick the right location
Location is the most critical factor when buying an investment property. And the world is your oyster. It doesn’t have to be local to where you live, although this may make things more convenient. Some definite criteria to consider when choosing your location include places with a young population, rising wages, and increasing property prices. Other essential factors to consider are job availability and lifestyle.
- Take age into account
An older property is often a turnoff for potential investors, as there is often more chance of things going wrong and needing costly repairs. A newer property will require less care but will generally be more expensive. Take into account the other properties in the neighborhood. When the time comes to sell, if you are trying to get rid of the priciest house on the street, you might have some difficulty.
- Know the risks
As with any investment, buying a property has its risks. Making sure you know these in advance allows you to prepare for them and spot them if they arise. Some of the most common risks inherent in property investment include:
- A rise in property taxes
- A change in the local market economy
- Bad rental tenants, resulting in costly repairs
There are several simple, cheap and quick changes you can make to a property to instantly increase its appeal. You can do them all yourself with having to resort to hiring outside help. While each individual change won’t add significant value to the house on its own, they are crucial to making it appealing for potential buyers and tenants.
- Clean it
An untidy or dirty house is exceptionally unappealing. Making sure the exterior and interior of your property are tidy and clean is crucial to ensuring value. Give it a thorough once-over after you buy it to make sure it is free from clutter, strange odours, or dirt. Maintain it regularly to keep it under control.
A fresh coat of paint can do wonders for any property. A new colour scheme can revitalise a tired, dull-looking space. The colour you choose can be hugely important, as specific colours have different impacts on our mood and well-being
- Change the fixtures
Although things like door handles, light fixtures and switches may seem like minor features, they can completely change the aesthetic appeal of a room. Changing them up and replacing them with sleeker, more modern fixtures can transform a property’s overall effect.
- Stage the rooms
Staging a home before selling has been shown to increase the sale price by up to seven percent. Boost your return on investment by carefully improving the layout and function of each room. Decluttering and creating a sense of space will make your property much more appealing to prospective buyers.
Most of the value you add to your property may come from larger-scale changes. Depending on the nature of the renovations you decide on and the materials used, these could be relatively costly and time-consuming. Nevertheless, these fixes are more likely to add the most value to your investment in the long run. If you have the skill and equipment, you may be able to perform some of these renovations yourself, without paying for expensive labour.
- Enhance street appeal
First impressions count for everything. Creating street appeal through a beautiful, attractive exterior increases the value astronomically. Done right, it should make people want to own the house just by looking at it from outside. It should spark their imaginations and make them imagine a similarly stunning interior and visions of life inside it. There are so many effective ways of increasing street appeal. You could paint the house and renovate the roof or completely redesign and landscape the gardens. Even smaller, more subtle changes can have a considerable impact on the overall effect. Repairing and painting a fence, adding some outdoor lighting, or including some strategically placed plant pots can completely transform your property’s exterior. If you’re on a budget and need special equipment like a pressure washer or an industrial trolley, you can hire most things you need for a short time or buy them cheaply secondhand.
- Renovate kitchens and bathrooms
Updating kitchens and bathrooms provides the highest return on property investment. They are generally the rooms that buyers view with the most importance when choosing a property, and have the most impact on resale value. Replace old appliances, update old cabinets and shelving, or retile floors and walls. The possibilities are endless when it comes to modernising a kitchen or bathroom. Even if you are on a budget, you can completely overhaul the look and feel of a bathroom by changing inexpensive items like toilets, mirrors, and fixtures.
- Reduce noise
This particularly applies to inner-city properties or houses situated on a busy street. Homeowners and tenants want to feel they are living in a private space away from the outside world, and sound from outdoors can intrude on this. Reducing noise can be as easy as adding insulation, double-glazing windows and doors, installing carpets, and placing noise-absorbing plants around the property.
- Add square footage
Increasing the size of a property is one of the best ways to add value. Building extensions or expanding vertically will be costly and require planning permission and permits, but your return on investment will increase no end. Adding square footage doesn’t have to mean adding bits on to the property. It could merely be a case of turning an unfinished basement or attic into living space.
- Don’t Over-Improve
As a final word of warning, you should be wary of overdoing it when it comes to adding value to your property. While you do want to make it more valuable, you don’t want to over-improve it, whereby you spend so much money on renovating it that you don’t see a high return on investment. Subtle changes can sometimes be better than huge ones.
To sum up, there are so many different ways to ensure you get a high return out of your property investment, from choosing your property to adding value through renovation. Many factors impact property value, so it is wise to do as much research as possible and make yourself aware of all the potential risks and pitfalls.