Many people overlook assessing the re-sale value of a home they’re planning to buy, focusing instead on finding their perfect home or planning renovations to suit their specific needs and tastes.
Objectively assessing the re-sale value of a home you’re planning to buy or renovate can provide long-term peace of mind, according to First National Real Estate chief executive, Ray Ellis.
“It’s like buying shares – how do you really know what will most increase in value over the next five years?” Mr Ellis said.
“It’s important to make a smart choice about where and what you buy. It’s dangerous to make the assumption that renovating any property in any location will produce a positive return on your investment”.
Mr Ellis said although no-one could guarantee a home would grow substantially in value, there were several considerations for homebuyers wanting to ensure the best possible investment.
· Location. “The reason agents talk about location is because it’s key in appealing to the largest possible number of potential home buyers, and that’s what you want in the future,” he said. “Avoid buying a home at the top end of your budget and housing values just because a particular suburb seems desirable. Instead, look closely at properties in improving suburbs or towns, or suburbs adjoining well regarded real estate areas, where values have room to increase.”
· Services. Check closely on the services available in the area you plan to buy in, including transport, recreation facilities, schools, health services, shops, restaurants, and how well community facilities and residences are maintained. For rural buyers, Mr Ellis recommends also making sure there is a healthy mix of business and residential facilities, local roads are well maintained and public transport is accessible and reliable. “These are all things that future buyers of your home will consider,” Mr Ellis said.
· Renovations. Don’t assume major renovations will immediately add significant value, Mr Ellis warns. Upgrades to improve living quality are good investments, but avoid over-capitalising, Mr Ellis suggests. Over-paying for someone else’s recent renovations should also be avoided, and review them against other homes in the immediate vicinity.
· Gardens and landscaping. Don’t pay a premium, which you may not recover, for an over-landscaped property. “You’ll get best value for a house with a moderately or under-landscaped garden for the area,” Mr Ellis said. “You can undertake improvements yourself, such as native plants or a water feature, at relatively low cost and over time.”
According to Mr Ellis, buying what you need rather than what you want can help keep a lid on your budget and provide more financial reward in the medium term.
“For example, if you buy a small or medium house in an area where there are large houses, the larger homes can help pull up your value, particularly if you undertake your own enhancements – without spending too much money.”
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Issued by: First National Real Estate
For further information contact: Stewart Bunn, National Communications Manager, First National Real Estate, on 0413 624 317