Is it me or is there always a property makeover show on the TV? These programs make great light entertainment but they can also give the impression that any kind of renovation or decoration will add vast sums of to the value of your property.
Unfortunately it’s not quite as easy as all that. Adding value requires that you indulge in a little light research of your local property market. It also requires that you understand two key concepts...
The Two Key Concepts Behind Adding Value:
1, Ceiling Prices
Every street has a price threshold. This is the price at which buyers can find similar property in a better location.
2.The Importance of Location
To make money on property it’s better to start will the worst property on the best street rather than the best property on the worst street.
The two concepts are inextricably linked and the best way to understand them is if I give you a couple of examples.
Examples of How to Approach Adding Value:
This is because in prime locations there will always be a set of buyers that are willing to pay a premium for the very best. If your house is in a more modest location your aim should be to do whatever is needed to bring it up to the same standard as the rest of the local housing stock.
To do more than this would be risky and it’s where most property improvers go wrong. If you attempt to create a six-bedroom palace while all around you are 3-bedroom semis, you’ll have little hope of finding a buyer or recouping your costs. The kind of buyer you’ll be after will be more inclined to spend their money in a better location, where six-bedroom properties already exist. This is the effect of ceiling prices and location at work!
What else will add value to your property?
Roughly speaking the answer is “space”. In the UK we live in some of the smallest accommodation in the EU. If you can add to the habitable floor area your house, you stand the best chance of increasing the value of your property. The best place to find out which improvement projects will have the greatest impact (be it a loft conversion, granny annex or increased living space) is your local estate agents.
Don’t just walk into your local agent’s office -- make an appointment to speak to the owner. Most independent estate agents are involved in development in one way or another. They can be an extremely useful as they will be on intimate terms with ceiling prices and buyer’s tastes as they relate to your property.
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If your house is in a prime location you can afford to try and make it one of the most desirable properties available in your area. In this situation designer kitchens and bathrooms are well worth considering. So are top class fitting and architect-designed extensions.