Spending too much on improving your home is a sin in the real estate game.
We call it over-capitalizing, and it means you’ve spent more money on a renovation than you’ll get back in return when the time comes to sell.
The most common areas to over-capitalize on are in the kitchen and bathroom. It’s easy to be a little overwhelmed by the bright lights of those showrooms and spend upwards of $40,000 before you know it.
As an experienced agent, I can assure you a modest budget can still deliver the maximum value when it’s time to sell.
Let’s start by addressing a basic rule of engagement: If you’re selling a family house or apartment, you need to attract a broad range of potential buyers.
Investing in high-end furnishings and finishes can alienate many folks because you’ll want the remodeling costs baked into your asking price. And if you don’t, then it’s odds-on you’re taking a loss on those improvements.
Of course, every scenario will be different. So, I’ve pulled together five tips to help you think carefully about any upgrades you might undertake before putting your home on the market.
- Talk to me! Or one of my colleagues. Ask an agent about buyer preferences and the improvements that might command a price premium before you pick up a hammer or paint brush. If you don’t, you’ll be splashing the cash without understanding the market. I’d also suggest areas where you might curb spending or leave alone because it won’t add value.
- Don’t overdo the DIY. It’s tempting to save money by completing the work yourself. But unless you’re a professional, the finish might not be optimal. That will alienate some potential buyers and may negatively affect any price negotiation.
- Don’t shoot too high. Avoid trying to capture the top-end of the market. This will limit the number of potential buyers. Aim your upgrades towards the mid-market, where you’ll find the most buyers willing to pay a competitive asking price.
- Forget top-of-the-range finishes. Remember, you won’t be living in your home for much longer, so you’ll never get the benefit and enjoyment of these luxuries. And unfortunately, the market may not value them. So stay conservative with your spending to achieve a positive financial result.
- Don’t underestimate first impressions. Every agent will tell you kerb-side appeal is critical. Simple cosmetic upgrades are great at the front of the property. Inside, you can make a big impression with little touches, such as updating door handles, light switches and power points. This is especially important in the more confined space of an apartment.
I hope you’ve found these tips helpful. If I can help you secure your dream home or sell your existing property, please do not hesitate to contact me. We can discuss buyer preferences, value-add upgrades, prices trends in our area and the way to maximize your current property’s value.