Do you want to boost your home’s value by up to NZ$100,000? Amy Hamilton Chadwick explores some options.
If you’re thinking about selling your home, or borrowing against it, what can you do to maximise its value? Even a small budget, spent wisely, can make a massive difference to the value of your home.
Here are some of the most cost-effective ways you could improve your home’s value, from NZ$5,000 to NZ$100,000 and beyond.
Add up to: NZ$40,000 to the value
If you’re planning to sell and you’re on a small budget, nothing beats a thorough clean and tidy. James Goren, director of The Renovation Team, has your to-do list:
• NZ$1,000 on a landscaping tidy-up and water-blasting pavers.
• NZ$1,000 on commercial cleaning for the interior and shampooing the carpets.
• NZ$1,000 to replace curtains with neutral roller blinds.
• NZ$2,000 on brighter lightbulbs, new light switches, solar tubes for dark spaces, new doorknobs and a new letterbox.
• NZ$600: Don’t forget to put most of your personal possessions into storage – mess kills value.
“Spend that NZ$5,000 and you could add $40,000 or more,” he says. “I recently purchased a property for $570,000 that had a CV of $955,000, simply because the owners didn’t bother to clean it up and it was an absolute dump.”
Low-budget makeover + re-paint and re-carpet
Add up to: NZ$100,000 to the value
Carpets, like curtains, soak up smells – fresh carpet and a coat of paint can add serious value to your home.
• Spending NZ$15,000 on carpet and paint, in addition to the low-budget makeover, give you a total spend of NZ$20,000.
• Stage the house properly and Goren believes those changes will add as much as NZ$100,000 to the resale value of a million-dollar property.
Low-budget makeover + re-paint and re-carpet + kitchen and bathroom upgrade
Spend: NZ$40,000 to $70,000
Add up to: NZ$100,000 to $250,000 to the value
It’s an oldie but a goodie.
• Renovating both your kitchen and bathroom together will cost you NZ$40,000 to NZ$70,000 on a
NZ$1 million home.
• Add to that the repainting and re-carpeting, plus the low-budget makeover and, Goren says, “in my experience a NZ$100,000 renovation on a million-dollar property translates to a value of NZ$1.2 to NZ$1.25 million.”
Turn a dining room into a bedroom
Add up to: NZ$50,000 to the value
This has the potential to get a fantastic payback, but an awkward layout that compromises the flow will actually devalue your home, warns Goren.
• “Think carefully. Going from three bedrooms to four means you’ll be selling to a bigger family, and they’ll want a bigger living area and a second bathroom. So, you need to know what you’re doing.”
Add a bathroom
Add up to: NZ$50,000 to the value
Adding a second bathroom only adds value to a larger home: “Two bedrooms? Don’t bother. Three bedrooms is marginal. For four bedrooms, it’s a must.”
The cost of rearranging the layout will be in the tens of thousands, especially as you may need council consent. The right changes could pay off, though: “When we add a bedroom and improve the layout, for every dollar we spend we get roughly NZ$3.60 back,” says Goren.
• If you spend NZ$20,000 on a new bathroom, it’s likely to boost its value by NZ$50,000, netting you NZ$30,000.
Decking and landscaping
Spend: NZ$6,000 to $10,000
Add up to: NZ$80,000 to the value
A home that flows from an attractive interior to an appealing exterior can be a winner for buyers. A deck below one metre doesn’t need consent or a handrail and can cost between NZ$6,000 and NZ$10,000 – add some landscaping too for best results.
“If you spend NZ$50,000 on adding a nice big deck and landscaping to a million-dollar home, you might get NZ$80,000 more for it,” says Goren, giving you a net increase of NZ$60,000.
• “Having a house with a nice outdoor area puts you into a different bracket from the valuer’s point of view – the functionality is better, which pushes up the emotional value, which can push up the real value.”
Freehold a cross lease title
Spend: NZ$29,000 to $35,000
Add up to: NZ$181,000 to the value
Cross-leased properties are less desirable than ‘freehold’ fee simple titles, resulting in an estimated value reduction of between 7 per cent and 18 per cent in Auckland, according to the Opportunity Knocks report by Dr Michael Rehm.
Hamish Frizzell, director of Good+Title, which specialises in cross lease conversions, says converting is well worthwhile, because the cost is usually shared between you and a neighbour. But sometimes, one person will pay for both because it makes so much sense, he says.
The cost of conversion for a simple two-dwelling cross lease is around NZ$29,000 to NZ$35,000 including everything – you’d pay half. If both homes were worth around $1 million, the value gain would theoretically be between NZ$70,000 and NZ$180,000 on each, a net gain of NZ$55,000 to NZ$167,500 for you and the same for your neighbour.
Half of New Zealand’s cross-leases are in Auckland, but Frizzell also has plenty of clients in Canterbury: “There’s a lower value uplift, but it still makes sense, particularly if you’re already doing a boundary definition survey.”
Published 26 May 2019
This article does not contain any financial advice and has not taken into account any particular person’s circumstances. Before relying on it, we recommend you speak with a financial adviser. This story reflects the views of the contributor only. Content comes from sources that we consider are accurate, but we do not guarantee that the content is accurate.
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