Property Improvements That Limit The Number Of Potential Buyers
Some property improvements actually limit the number of potential buyers, thus lowering your chance of getting the best price possible.
There are some property improvements that people make that can actually limit the number of potential buyers and thus limit the chance of you getting a higher than average purchase price for your property. That’s what I wanted to talk about in today’s episode. Hey, I’m Ryan from onproperty.com.au, helping you find positive cash flow property.
There’s a lot of different people out there talking about how to improve your property, how to renovate your property, how to get the best sale price for your property. And so they should because little tweaks that you make here and there can really improve the value of your property and you want to be doing these things. However, there are some things that you may do to your property to try and improve it that actually limit the number of potential buyers.
Generally speaking, when you’re selling your property, you want the maximum amount of potential buyers so that you can get a fast sale and so that you have people competing for your property and a better chance of getting a higher than average purchase price.
So I wanted to go through these things that may limit the number of people that are interested in your property. So you can think about them and then maybe avoid them when you’re renovating or improving your property.
The first one is pools. If you’re thinking of adding a pool because you think it’s going to add value to your property, chances are, a pool isn’t much – if any – value to your property. And in many cases, it can actually decrease the value of a property. Pools are expensive to put in. They’re not cheap and when people go and visit house, if they really, really want a pool, a lot of people would be willing to purchase a house without a pool and put a pool in. But if people go and visit a house and they don’t want a pool, then that is something that is going to deter them from purchasing your property because it seems very difficult for people to get rid of a pool. Not many people do it.
It’s not regularly done. So if people see a pool and they don’t actually want a pool, then it’s likely to deter them. They also are going to be thinking about the maintenance they have to do, etc., etc. Unless you’re in a very hot area where pools are very desirable, then this can be a limiting factor. So consult your local real estate agent around pools and whether or not you should put one in and how it’s going to affect the value of your house.
I like to think of pools as a personal decision that you make if you want to live in a house with a pool and then you suffer the consequences on that if you then decide to sell. But if you’re doing it as an investment, you’re deciding to put in a pool, I would definitely think twice about that one.
The next thing that can limit the amount of potential buyers is high-maintenance gardens. Not everyone loves to garden. Me, for example, I absolutely hate to garden. I’ll mow the lawn, but I probably won’t enjoy doing it. And apart from that, I don’t really spend my time gardening. So if you put in a high-maintenance garden that needs to be up kept in order to look good, that can turn off potential buyers because they get overwhelmed with the garden, how much it’s going to take to up keep. And that can be really difficult.
Whereas people who are gardeners can go in, they can see a basic lawn or a basic garden that’s really easy to maintain and they can think about things they can add or do to it to improve that garden to their liking. However, if you’re not a gardener and you’re looking at this high-maintenance garden, that can overwhelm you and deter you from the property.
A lot of these things people don’t decide consciously. “Oh, that has a high-maintenance garden so I’m not going invest in it.” but they just sub-consciously notice these things and it can turn them away. So that’s something to be careful of there.
Another thing that you need to be really careful of is color choices on your walls and I’m going to add in wallpaper as well. If you want to be really bold, if you want to add the colors that you absolutely love, then that’s fine for you. But when it comes to selling your property, that can deter people if it’s not on-trend and if it’s not neutral colors. Most people – and this is something that I learnt from Ben the buyer’s agent because his wife is an interior designer – most people can’t walk into a room and imagine what it could be like with their furniture in there. Or imagine what it could be like with different colors on the walls.
They walk into a room, they see the room for what it is and they assess it based on what it is. So if you’ve got a bright red feature wall in the main bedroom, people are going to walk in and go, “Ugh! That bedroom! That’s a bright red feature wall. I hate that.” But if they walk in and it’s just a cream wall or it’s just white or something like that, they’re like, “Okay, yeah, I can imagine having my bed in here.” So, red wall, some people might say, “I love that red wall.” but a lot of people will say, “You know what, that bedroom was hideous.
I don’t want to live in that room.” And so, they won’t imagine, “Okay, I can just paint over that red wall in white.” So that’s something you need to be really careful of. Especially if you’re going to choose bold wallpaper. Wallpaper can be very difficult to change. People walk in and if they don’t like the wallpaper, it can definitely deter them from your property.
So keep in mind that people can’t imagine changing things. They can’t imagine what the room would look like if they change things. So you need to try and to appeal to the mass amount of people. And by doing that, more people will be interested in your property. The way to do that is generally to use neutral colors to make sure that you’re on-trend and not be too bold. And if you want to be bold, if you want to add flashy color, that’s fine.
A great tip to do that is to take some wallpaper and make some artwork out of it and then put that on a neutrally colored wall. So you can get the boldness that you’re after, however, people walk in and they realize, “Hey, I can take that picture off the wall and this will just be a white room and that’s fine with them. So color choices and wallpaper can definitely be improvements that limit the amount of buyers interested in your property.
The next thing is kitchens and bathrooms. Now, these are the most important rooms in the house – kitchen being the most important, bathrooms being a close second. If you do these up in such a way, again if they’re extremely bold or if they’re slightly odd or if they’re specifically to your taste, something that wouldn’t like, that can deter people. So, basically, when you’re going for a kitchen or a bathroom, you want to go, again, with something neutral, something that’s on-trend. Look at what the market wants. Look at what people are buying these days and then generally invest in something like that. The best way, I think to do it, is to actually look at houses in your area.
Look at things that are similar to yours and look at the properties that are fetching a higher price than yours would. Slightly higher, not if you’re selling a $200,000 house, look at the $1 million properties. But slightly higher and say, “Okay, what does their kitchen have? What do people in the area want?” And again, you can talk to real estate agents. Depending on what your house is, depending on the level, how much it is, you may want to go with stone bench tops, you may want to go with a cheaper bench top and things like that. But basically, yeah, look at what the market is after.
Look at what’s on-trend and don’t just do what you want, but think about what the market wants. And that’s kind of with all of these things, it’s not about what you want. It’s about what the market wants.
Something else that can deter buyers is actually converting a garage into something like a rumpus room or maybe a bedroom or something like that. Some people love having a garage. They want somewhere to store their car. They want somewhere to store all of their stuff. And if they don’t have a garage, which means they either need to park in the driveway or park on the street. That can deter some people from your property. Now, not everyone. Like, personally, for me, I don’t about having a garage.
I don’t care about having a carport. I’m happy to have my car out there. Hopefully, it doesn’t hale. I’m not too fussed about it. But some people do really care about having a garage as a space. But, again, it depends on the area.
It depends on the house. Sometimes the extra room is going to add more and attract more buyers than the garage. Then, taking away the garage affects it. Do you know what I mean? But sometimes it’s the other way around. More people want a garage than an extra rumpus rooms or something like that. So, again, consult real estate agents. Think about the area – what the market wants. Do they want a garage or do they want that extra space? And again, it’s going to depend on your property as well.
Another thing that can limit the number of buyers is just adding a lot of personal touches to the house. So things that you really like, but other people won’t. It could be the colours on your walls, like we talked about. It could be the style of furniture that you have. It could be paintings that you want to feature of nude ladies or something like that. That’s an extreme example, but if you’re very bold, very unique, most of the market isn’t. So you may want to actually suppress some of your personal things, suppress some of who you are to appeal to the broader market.
Now, this is hard of a lot of people to do, especially if you are unique, if you’re very creative, if you enjoy bright colours, all of this sort of stuff. It’s really going to dampen your day to live in something like that and that’s not you, but just know, you’re not selling this property to yourself. You don’t have to display this as the best version of you. People aren’t buying you.
People aren’t buying “your” house, so to speak. They’re purchasing a property that they want to live in. And so, sometimes, adding too many personal touches can actually detract away from people trying to imagine themselves in the house. And so, this can be really hard to do. Put away some of your personal things. Make the house more neutral and less creative. Less like you actually lived there, but it can be a very important thing to do.
The last thing that I want to touch on is actually making your property too good. And this is something Ben talked about when I interviewed him. One of the first properties that he built as a new build property, he did it to the highest caliber for the area and if he wanted to sell that property and make a profit, he’d have to sell it, I think he was saying it was in the highest 6% that the suburb has ever achieved in terms of pricing. And so, he put himself right up there in terms of pricing.
He needs a premium buyer to come through and that has limited his market because of the way he built that house. And so, think about that. If you’re building a house, if you’re doing an extension, if you’re doing a renovation, if you’re making improvements, you want to make up to the level that the market wants and the market will accept.
If you go too high above that, then you can limit the amount of potential buyers and you can limit your return on investment. Ideally, you want to get the best return on investment possible. And so, sometimes that means putting in lots of money to get the best. Sometimes, it means not putting in as much money just to get something that the market wants because that’s going to get you the best return on investment.
Again, an easy way to assess this is to look at comparable properties in the area, what are things sold for, what’s selling at the moment that’s comparable to yours and what sort of things did they have? Because remember, when someone is shopping for a house, they are comparing houses to each other.
It’s a competition between you and the other houses in the area. So, if you can be slightly better than them, then they may be able to pay a bit more for you. However, if you’re just way over the top and out of reach, then they’re not even going to look at your house. They’re looking at what can I get the best value for my money? That’s what most people want in an area. And so, I guess, the goal is to have your house be slightly nice than everything else.
The house that wows them, but a house that’s also great value for money and not super expensive. So sometimes pushing yourself up into that next bracket in terms of what people are willing to spend, can mean that people just don’t look at your house because they feel like it’s out of their price range. So that can limit the amount of buyers for your property and limit your return on investment.
So there you have some things, obviously, there’s stuff that I haven’t covered or haven’t thought about so there’s more that we could add to this. But this gives you an idea of some improvements that may limit the amount of buyers and actually limit what your property is going to sell for. So, again, in most situations, you want t he maximum amount of buyers. You want them to be bidding against each other.
You want them to be emotional about your property. And by doing things that limit the amount of buyers, you’ve got less chance of getting that bidding war happening, less chance of people feeling like I’m really emotional, I really need to get this. I really need to take action and pay more for your property than what it’s actually worth. And so, when you’re renovating, when you’re trying to make improvements, keep these things in mind, be very careful.
Think about pools, think about high-maintenance gardens. Think about your colour choices of the house, both the walls, wallpaper. I didn’t talk about flooring and carpet, but keep that in mind as well in terms of colour choices. Keep in mind kitchen and bathroom – what does the market want and provide them with that. Converting a garage could be a good thing to do, but it could limit people so you need to assess your market and to see whether they want that.
Adding lots of personal touches can detract away from people being able to imagine themselves in your property so may want to hide some of your personal things, which can be hard to do, but may be necessary. And also, if you make your property too good, then you can price people out, limit the amount of buyers there.
Definitely be careful. Don’t be scared from doing improvements to your property because I definitely believe being an active investor, actively adding value to your property through improvements is one of the best ways to generate money from investing in property. And so, don’t be scared from actually making improvements to your property, but just make the improvements that the market wants and that the market are willing to pay for.
I wish you the absolute best with your renovation or with the improvements you do. That’s it for me. Until next time, stay positive.
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Until next time, guys, stay positive.