Are you thinking of selling your property in the next year or so? We've teamed up with the experts at The House Sales Advisory to make sure you're equipped with all the knowledge you need to secure a profit
Improving your property and making a profit is not as easy as the TV makeover shows would have us believe. To make sure the money you spend actually makes you money in the end, you need to know your stuff.
Understanding your limits
This is not about aiming low, this is about making strategic choices to ensure you're not wasting valuable time, effort and money on something that's unlikely to reward you with a profit in the end. In order to achieve this you'll need to get to grips with two key concepts:
- Ceiling price: This is the maximum price a buyer will spend on a property in your street before being able to find a similar property for the same money in a better street.
- Location: There are enough property programmes around chanting the location mantra for us to know how important it is, but it's not as simple as a great location reaping big profits. It all depends on your starting point.
To make money selling property it's better to start with the worst property on the best street than a great property on an average street. Why? Because unless you have the capital to invest in a splattering of delightful delis, restaurants and flower-lined streets, there's little you can do about an average location, but with a little work you can really add value to an average property. So, your circumstances will decide how best to tackle your project.
Scenario 1: You own property on one of the best streets in your area
If your property is ideally located, then make it your aim to make it the best property in town. This is because there will always a buyer willing to pay a 'premium' for the 'best', and your investment in state-of-the-art interiors. The advice of good architects will really pay-off.
Scenario 2: You own a property in an average location
No matter how much affection you have for your place, if it lives on a street that is considered less desirable than others in the area then it should be your aim to bring it up to the same standard, or a little bit higher, as the rest. It's tempting to make it the best it can be, but no amount of Conran furnishings and luxury fittings and fixtures will convert a high-spending buyer to your property if they can pay the same for a more desirable location.
Know your buyers
If you know what kind of buyer is likely to be interested in your property, you'll be able to pinpoint the improvement projects worth spending money on. To be certain you make money, always give the buyers what they want, not what you want!
What buyers want differs from region to region, town to town and street to street. To pinpoint what projects make money in your area, you need to do some investigative research!
The three key factors to establish are:
- What common improvements people have made in your area
- What these improved properties sell for
- How much these improvements will cost you to make
If you watch your local property market closely, you probably already have a good idea of this. If you don't, this is where an estate agent can come in quite handy.
Given the chance, an estate agent will wax lyrical about 'ceiling prices' and 'buyers tastes' for hours (if they think they'll bag you as a client in the not too distant future). So make it your aim to speak to three estate agents in your town.
Book an appointment to see the owner (if it's an independent) or the branch manager (if it's a corporate). An estate agent who really knows their stuff will take the time to show you sales particulars of improved properties and explain how they compare to whatever else is on the market.
Your goal is to get them to show you proof that an improvement project will make a profit!
What projects will really add value?
The trend at the moment is for more space. In our ever-increasingly overpopulated towns and cities, these are the real money-spinners (but they will involve building work). First, you need to ask yourself if you can you stand the disruption of builders, navigate the planning process and find architects and builders you can work with. If you can, you stand a good chance of increasing your wealth substantially.
Here are some more classic projects that over the years have shown to add value:
- Turning a single bedroom into a double bedroom (increasing it in size to at least 2.7 x 2.7sqm).
- Adding an en-suite (or second bathroom) to a two-bedroom property.
- Increasing the floor area of a two-bedroom property so it becomes a three-bedroom / two-bathroom property.
- Increasing the floor area of a three-bedroom property so it becomes a four-bedroom / three-bathroom property.
- Taking a two or three-bedroom property and converting the loft into an extra bedroom and bathroom.
- Adding off-street parking to a property that has none.
- Gaining planning permission for any of the above projects.
At the House Sales Advisory you will learn how to get the best from estate agents,
Online conveyancing solicitors & mortgage lenders. You will also find free guides on property valuation, selling property privately and how to deal with cash house buyers.