A smart renovation paid off, giving a young family extra cash to climb the property ladder sooner.
Australia is in the midst of a billion-dollar renovation blitz, with proud home owners collectively spending $17.4 million on home improvements in the last year alone.
It’s no secret that quality renovations can deliver lifestyle benefits but they can also ramp up your home’s market value. And if you’re planning to upgrade to a next home, a few carefully considered improvements can seriously boost your buying power.
If you sell the home you live in, you usually don’t pay capital gains tax, so every extra dollar you earn on the sale of your place can go straight towards the purchase of your next home. It makes renovating a lot easier than taking on a second job, and it could be the difference between buying your dream home or settling for second best.
Something as simple as a fresh coat of paint or a garden tidy up can add value to your property. But if cash is tight, the key is to hone in on renovations that will deliver bang for your buck in terms of increasing your home’s market appeal – and market value. As the Hopkins family of New South Wales found, this is an area where the right advice can pay off.
Three kids, another on the way…time for a bigger home
With three small children and a new baby on the way, the Hopkins’ home was starting to feel a little snug. It was time for an upgrade. But with only one income coming in, the family needed to maximise the sale value of their Central Coast house to afford a larger property.
With limited spare cash to spend on improvements, and eager to avoid large-scale renovations with toddlers in tow, the Hopkins sought advice on the best way to increase their home’s value without spending a fortune.
Identify the weak spots for maximum impact
Carren Hopkins says, “We spoke with our listing agent – Garth from Raine & Horne Terrigal, who recommended that we focus on renovating the kitchen. He said a quick renovation would help take away a significant buyer objection – something that could see the sale price substantially knocked down”.
“Garth advised us that if a kitchen needs, say, $5,000 worth of work, many buyers will either walk away from the property or try to knock ten times this amount off the price,” explains Carren. “Worst case scenario that could have left us with $50,000 less than expected on the sale of our home – money we needed to fund a bigger home.”
Transforming an eyesore into a feature
The kitchen had certainly seen better days. Carren admits, “It was old and tired – I’d call it a bit of an eyesore really.”
In fact, the kitchen was in near-original condition. A few cosmetic touches had been made over the years – the old tiles had been painted in a more modern colour, and new handles added to the cupboards. But the crumbling chipboard was hard to disguise.
Mindful of the need to invest their renovation spend where it would have the greatest impact, the kitchen was given a complete makeover. “We used a local kitchen specialist and gave them a tight budget of $7,000” explains Carren. “It wasn’t a fortune but it transformed the kitchen from being the weak spot of the house to being a focal point.”
Sold in just three weeks
The new kitchen was completed in just three days, which meant the property could go to market almost immediately, and the family didn’t have to wear the pain of living without a functioning kitchen for an extended period.
The budget-friendly improvement paid off. Carren says, “The money we spent helped us get more buyers through the door, and more importantly, we secured a better price than if we’d left the kitchen untouched.”
The house was due to be sold at auction but just three weeks after the property was listed for sale, the Hopkins’ received an offer that was too good to refuse. Carren adds, “The renovation landed us an extra $21,000 on the expected sale price of our home. That additional cash went a long way to funding our new house.”
If you’re unsure how to renovate your home for maximum impact, speak with a handful of local selling agents, check out other properties for sale in your area, or ask a trusted friend for their honest view on your home’s weak spots.
A good renovation doesn’t have to break the budget but the impact on your home’s market value could be the clincher that lets you climb the property ladder sooner.
For a clear idea of your buying power, talk to your Aussie broker.
You may also be interested in 5 things I wish I’d known before buying (without a broker), Spot the next property hot spot to buy and Increase your income with a flexible side gig.