Are you an armchair renovator, obsessed with the weird, wondrous, and even wacky designs on reno TV? Don’t be fooled into overcapitalising on your property with a renovation that meets your wildest dreams but not your market. In my chat with Smart Property Investment‘s Maja Garaca Djurdjevic, I share how to keep your head cool and still end up with a hot-looking home!
Why you should steer away from reno TV shows
By Maja Garaca Djurdjevic, Smart Property Investment, April 13, 2021.
While wacky wallpaper and elaborate feature walls may dazzle celebrity judges on renovation reality shows, one expert has warned average mum and dad property owners of the risk of overcapitalising if they follow the TV lead.
According to housing affordability commentator, Ian Ugarte, while reality programs have inspired an increase in renovating, deferring to “trending styles” is likely to inflate the cost of the renovation as well as “significantly limit” buyer interest in the property.
“Property owners expect their investments to appreciate over time, and the best chance they have of making this happen is to ensure any planned makeovers are done to a realistic budget in terms of projected return, and use styles and finishes that are likely to appeal to the majority of buyers,” said Mr Ugarte.
“The last thing you want to do is limit or restrict your buyer base by introducing features like curved walls and floating beds that might have personal appeal, but are likely to alienate a chunk of possible buyers and potentially blow out your renovation budget in the process,” he advised
Mr Ugarte explained that renovations undertaken to manufacture growth in the property should keep the following tips in mind:
- Study the sold prices in the area
- Research existing and planned infrastructure in the area
- Crunch the numbers, create a budget and stick to it
- Be realistic on how much growth is possible
“For a more accurate understanding of a property’s value, budding renovators should study the sold prices of comparable properties via their preferred real estate site, since that’s where the ‘reality’ occurs.
“Not only that, it’s important to understand why the property is valued at that price by taking into account the key features that might have increased (or decreased) demand for the property – for example, did it have a spacious kitchen or provide off-street parking?” Mr Ugarte said.
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He also advised owners to search their local council website to determine if any infrastructure – like roads, hospitals and supermarkets – is being planned for the area, noting that a renovation should be about making a profit.
“It’s definitely worthwhile knowing what’s in the works, since that is a good reflection of the projected growth in the area.
“Once you’ve done this, you’re well positioned to carry out a reverse feasibility assessment to determine what you’ll need to spend, before embarking on any major renovation,” Mr Ugarte concluded.
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