How much is too much to spend on a renovation in a flat market?
We are in our 11th year of our property makeover business and I have only seen this type of market twice!
Right now we are looking at a different return on investment approach to the last few years. At this point in the market, the need is to present your property well, so potential purchasers are not sitting on their hands or alternatively – low balling your offer.
A year ago, investment was at a usual 3 x ROI just in value, not counting efficiency of time costs on sale, as the market is now. Therefore the investment return is switching to the unknown cost of a ‘stale’ property that is sitting on the market.
We are working with vendors to ensure their properties are clean, clear, well maintained and the furniture is fabulous. It is important that these properties appear more appealing than others the same category in order to win the competition stakes.
At times like this it takes careful planning and consideration of the cost of a renovation, as the immediate return may not put the cash straight back in your pocket. Knowing the local market intimately is essential to understand what is selling and why it’s selling in a slow market. Working together with your real estate agent and a property makeover consultant may save you some expensive mistakes.
We are working with someone who bought an apartment 12 months ago and whose investment has taken a slight hit, but she’s not planning on selling for at least 2 years and so an imminent kitchen renovation budget is undergoing some scrutiny before work commences.
Photo credit: Topsco Worktop Specialist
About Belinda Woolrych