50 Proven Ways To Dramatically Increase The Value Of Your Investment Property, Instantly – Part #1
With the right knowledge and a bit of hard work it is possible to dramatically increase the value of your home or your investment property. I want to show you 50 surefire ways that you can dramatically increase the value of your property without having to spend a lot of money.
In October 2009 it was time to sell the family home I grew up in. My parents had split and it was time to sell the house and share the profits. The house next door came on the market so we got the real estate agent who was selling that house to value our home.
The house next door to ours was extremely similar to ours so the valuation on our property was going to be pretty accurate. The house next door sold for over $820,000 and our house was given a value of approximately $725,000. Around $100,000 less than next door.
We quickly got to work and gave the house a cosmetic renovation that cost just $1,000 and we sold the home a couple of weeks later for $825,000! We increased it’s value by $100,000 in 2 weeks with little to no market movement and only $1,000.
The 50 tips I have listed below will help you dramatically increase the value of your property. Whether you plan on selling it or just want to get the bank to revalue your property and open up some equity for you.
This is an exhaustive list that will take you a while to consume. Email yourself a link to this page so you can come back view it as you need to. The information in this list could make you $100,000 just like it did on my family home.
A Few Basic Guidelines To Follow
Before we go ahead and detail the specific things you can do to increase the value of your home I want to outline some specific guidelines you will want to follow so that you don’t spend more on the property than you add in value.
What Is Seen Adds More Value Than What Is Unseen
Many properties, and older properties in particular, may require a lot of structural work to keep them up to standard. However, the general rule is that you add more value than you spend on the things that are seen (cosmetics such as paint, kitchen, bathroom, look of the property) and you spend more money that you add in value when you work on things that are unseen.
Things like restumping, structural work, electrics and other things that the average buyer can’t see just buy looking will cost you more than they add you in value. Is it really worth spending $20,000 to only add $10,000 worth of value?
Make It For Your Market
The way to increase the value of your property the most is to make it appeal to the largest amount of people possible. The more people that want your property and the higher the demand for your property the higher the price.
If less people want your property then there is little chance of creating a bidding war and people who do make an offer will have time to haggle.
Different areas attract different people, and different people want different things. Someone buying a one bedroom apartment in the city wants something different to a young family in the suburbs.
Your market will depend on two things, firstly your area and secondly on the type of property you own. Talk to your real estate agent and ask what people are looking for in your type of property.
Then use that information to give people what they want. If they want a backyard then don’t pave your entire backyard to make a courtyard. If they want open plan living then don’t box in all the different living rooms, open it up. If they want a bath then don’t only have a shower. If they want a 4 bedroom house not a 3 bedroom house then find out if you can add an extra bedroom and do it.
Give the people what they want and they will be more than happy to pay for it.
Neutral Attracts The Most Potential Buyers
As mentioned above you want your property to appeal to the largest amount of people possible and the best way to do that is to go netural. Paint with creams, mochas and other neutral colours. (They will just paint over it anyway).
You want your potential buyers to imagine themselves living in your property…now. Bold colours may put off the buyers and stop them imaging themselves in your property and that will make them not want to buy.
The Banks Are Cautious And Will Hesitate To Over Value
Don’t think that because you put a lick of paint on your property the banks are going to add $100,000 to the value of the property.
Banks are in the business of making money and one of the ways they do that is they lower their risk by undervaluing properties. Don’t expect them to be friendly. You need to make them value your property at the highest amount. Make your house look immaculate and make it appeal to the widest market (neutral colours and what the market wants). They will see this and value the property appropriately.
Your Taste Doesn’t Matter
At my old work I worked with an Indian lady who was telling me about her house. Every room was a different bold colour. One room was red, one was green, one was blue, on was pink and the staircase was orange. Each room had ornaments and picture frames of that rooms colour.
I thought this would be hideous and ugly but my coworker was talking about how beautiful her house was.
When increasing the value of your investment property be careful not to renovate it to your specific taste. Your taste may be beautiful to you and ugly to everyone else. Find out the taste of the market and do that.
50 Ways To Increase The Value Of Your Investment Property
Now we will get into the top 50 ways to increase the value of your investment property. Not all will be relevant to you, so don’t think these are recommendations that I am saying you MUST do this. Each house needs different work and you need to work out what will increase the value of your specific property.
Grab and pen and paper (or a fresh word document if you prefer writing on the computer) and note down the strategies that you can apply to increase the value of your investment property.
For ease I have broken this list down into 7 main section. Street appeal, internal appeal, adding or improving space, general appeal, the extras
Create Street Appeal
First impressions count, more than you know. You want to make people want to own your house before they have even seen the inside and you do this by creating great street appeal. Good street appeal makes people imagine a good interior and bad street appeal makes people imagine a bad interior (and a cheaper property). First impressions count because they effect the feelings and imaginations of your market. Wouldn’t you rather them imagine a interior of great value that they would want to pay more for rather than a disgusting interior they wouldn’t even bother visiting let alone buying?
Go through your area and choose the houses that you think look the best. Choose at least 5 of them. What makes them look great? The next 5 tips will all help you increase the street appeal of your property.
1. Paint The Exterior
Houses are generally painted according to the following categories
A Big Lolly – You see it all the time, houses that look like they should be on a lollipop stick. They are bright pinks, or yellow, baby green or baby blue. We loved cotton candy as a kid but that doesn’t mean we want to live in a cotton candy house as adults.
A Big Poo – These are your poo green and poo brown houses that are an eye sore and you would almost be scared to touch the paint for fear of making your hands smell.
A Modern Beauty – This is your house with neutral modern colours that doesn’t “stand out” but that compliments itself and its surrounding. The different shades compliment each other and invite you in.
Refreshing the exterior of your property with a modern lick of paint can broaden your market and you can appeal to an entire different demographic (with more money). It isn’t too expensive and can be done with some help and hard work. It will make your property look more valuable than before.
TIP: The industrial paint spray guns will save you hours.
2. Landscaping The Gardens
Gardening may not be your passion, and it may not even been the passion of your potential buyer, but a beautiful garden will compliment the house. The front garden contributes to the overall “look” of the house from the street so make it look clean, taken care of and give it plants that are trendy but that look low maintenance.
It can often be a good idea to add some colour to the back yard. You can buy cheap flowers for under $5 each and they can transform a backyard from a bleak dirt patch to an inviting oasis.
3. Improve Your Fencing
Be carefully how much you spend on fencing because you may not regain the cost of the fence in added value to the property. A fence will add value to the property when it significantly increase the street appeal of the property. If your street appeal is appalling then this will be worth doing, otherwise you should take into account all the costs.
You could always create a picket fence yourself by purchasing the wood from a local hardwood store (like Bunnings) and knocking it up yourself. You can also save money by painting the fence yourself and not getting the builder to paint it.
4. Paint/Repair The Roof
“A leaky roof costs a lot to fix.” This is what potential buyers will be thinking. Most buyers would prefer to buy a place that needs less work than a place that needs significant work.
If your roof is extremely rusty or has huge gaps in the tiles then potential buyers will be aware of this and they may assume that the roof needs serious work, and then may steer away from your property or lower the price they are willing to pay.
Painting your roof can make it look almost brand new and replacing broken tiles will take away the eye sore and the concern of your buyers. This will help to increase the value or your property, or at least stop potential buyers from decreasing the value of it.
5. Render The Red Brick
You can turn an old home into a modern masterpiece and add a great deal of street appeal by rendering the red brick on your home. The cost for rendering a home is likely to exceed $10,000 but it could be a great investment and attract a lot more potential buyers who love the modern rendered look.
Creating Internal Appeal
Street appeal gets the buyers into the house and it gets them excited about living inside your house, even before they see what the inside looks like. It is then the job of the internal appeal of your house to grab the potential buyers, pull on their heart strings, evoke an emotional attachment and encourage them to envision themselves already living in your property.
The interior has a big job to do and this is an area that most people fail to successfully improve.
6. Paint The Interior
Painting the interior with modern colours can transform any dull and drab room into a beautiful space.
Even if your interior is a nice colour it is likely to be dirty. A new coat of paint will freshen up the walls and make the space look bigger and more inviting.
When painting the interior you need to remember that whoever buys your house is going to repaint it anyway. Your goal is not to create to perfect paint job for the one person who does buy the house. Your goal is to make the house appeal to as many of your potential buyers as possible. You do this by using modern, neutral colours.
The feature wall is dead. In the 2000’s it was trendy to give every room a feature wall. This isn’t the case any more, feature walls wont have the impact they used to have. Buy some of the latest home style magazines and look at the current trends. You need to give people what they want, trends tell you what people want.
7. Get Rid Of Wall Paper
Feature walls may be dead, but wall paper is beyond dead. Wall paper has been dead so long that maggots have eaten the flesh off it and all that is left is a couple of bones of what used to be a trend.
If you have a property that has wallpaper, or a mural on the wall, then get rid of it. Hire a wall paper remover steam gun and take it off the walls. Then give the walls a fresh coat of paint.
Granted, there are rare circumstances where wall paper is trendy. But these are rare and you have to be very tuned in design-wise to make wallpaper look good.
Remember, you want to make your property appeal to the most buyers possible. Wallpaper is unlikely to achieve this.
8. New Carpet Or Polished Floors
Old, dirty, tattered carpet or floorboards draws the buyers attention to the fact that the property hasn’t been well looked after. This puts the buyer in the “what else is wrong” mindset.
You don’t want your buyers thinking about the things that drive the value of the proprety down. You want them to be thinking of the things that makes your property valuable.
Fresh flooring will help to put the buyer in the right mindset. It will make them feel like “This house is clean and inviting, what else about this house do I like?”
Can you see how that can make a HUGE difference to the final sale price of your property?
If you have carpet over tiles or floorboards you may want to think about ripping it up and showing what is underneath. People know they can always put carpet over floorboards, but it is harder to put floorboard under carpet. Think about what your market will want in this situation.
9. Refresh The Bathroom
When you buy a house that is pink do you knock the house down because you don’t like the colour? Of course you don’t, that would be wasteful and expensive.
Why then do investors feel like they need to rip out a bathroom and do a full renovation when they don’t like the colour or when the bathroom is a little dated?
The fact of the matter is that you can significantly increase the value of a property by simply refreshing the bathroom with a paint job. Yes there is now paint that you can use on tiles and even in your shower!
By refreshing the bathroom (and kitchen) of one property we lived in we increased the rental rate of that property by approximately 17% in 11 months, which was well above what rent was increasing at in the area.
White tends to be the easiest bathroom colour to use. It looks clean, bright and makes the room look bigger. We tend to avoid painting the floor tiles as dirt sticks to paint fairly easy and the floors would get filthy very quickly. But painting the wall tiles generally makes the floor look not as bad so it doesn’t need to be changed. You can also paint the vanity, add new modern handles to the vanity and put new modern towel racks in the bathroom.
10. Revitalize Your Kitchen
The same goes for the kitchen. You don’t have to rip the kitchen out and spend $20,000 to improve the look of the kitchen. You can revitalize it on the cheap and still add a lot of value to your property.
NOTE: It is completely true when people say that the kitchen is one of the biggest selling points of a house. If you have a great house with a grotty kitchen then you are missing out on dollars you could be putting in your pocket.
Thing you can do to revitalize your kitchen on the cheap
A) Paint or Replace at the Cupboards – It doesn’t cost much to simply keep the cupboards, but to completely replace the doors with new modern doors. You can also paint the doors if you don’t want to replace them. They now have paint that can go over the shiniest of laminates.
B) New Modern Handles – This is to go with your new paint job. Get new modern handles for all your doors and draws. At the time of writing, long brushed stainless steel handles are quite a good option. Your best bet is to look in the design magazine, or on the kitchen design blogs and see what is in fashion and follow that trend.
C) New Bench Top – You don’t have to rip out your kitchen bench to make it look brand new. There are now companies that can replace almost any kitchen top with a granite bench top. They simply put it straight over the top of your current bench top. It might boost you a couple of grand instead of 5-10 grand. It’s not cheap, but it makes your kitchen look brand new.
D) New Tap Fittings – New taps fittings are only worth a couple of hundred dollars but they can significantly increase the look of your kitchen. Old, broken, moldy tap fittings will make your kitchen look old. It is usually worth the small cost to upgrade these items.
E) Upgraded Electricals – If you have a stove top and oven that is over 20 years old and is clearly showing it’s age then it may be time to replace it. If it stands out like a sore thumb it is time to replace it with something that blends in to your new modern style kitchen. This is more an area of the old will reduce value, rather than the new will increase value, so don’t go overboard.
This is part 1 of a 5 part series. It is quite a long post as it covers some basic principles as well as 10 specific strategies for increasing the value of your property. Stay tuned for more strategies.