Move or improve?
Navigating the real-estate cycle can be fraught. Timing when you buy and sell can affect returns, yet your motivation to move may be about more than just money. Perhaps you need more bedrooms, want a feature like a pool, or a bigger or smaller section.
If you have itchy feet and simply want to sell, in a weaker market it’s important to also buy when the market is in decline, explains Louise Lucas, CEO of The Property Education Company. “A trap to avoid is to sell, rent for a while and take your eye off what property prices are doing,” she says. “In a short period of time they can rise and, if you don’t act, you may find yourself priced out of the market. That’s why, if upgrading, it’s best to buy in the same market you sold, as the loan you need should be lower than if you sold and bought when prices are high.”
Bills to pay
If deciding to sell, keep in mind the expenses that are involved such as repairs, repainting, a garden tidy-up and staging the property before it goes to market. You’ll also have conveyancing costs and agents’ commission fees, which vary enormously, so be sure to shop around. Then there are moving costs and possibly storage fees to consider, plus all the expenses involved in buying again.
Renovating your current home to better meet your needs may be an option worth exploring. Mark Trafford at Maintain To Profit says that costs vary, based on the extent of work and the home’s age and quality, and whether consents are needed, because council fees can be hefty. “It’s pretty difficult to estimate before a firm plan is in place, but you can expect a ballpark figure upwards of roughly $1800 per square metre for a modest renovation.”
Mark says it’s not uncommon for a significant single-level extension to come out in the early to mid $100,000s. “You’re really best to start by talking to a licensed building practitioner and an architect to help you decide what to do,” he says.
If renovating for your own comfort now but to appeal to future buyers, doing your homework is imperative. Ask top agents in your area for market information on properties similar to yours and go to open homes to get a realistic idea of what’s on offer and how yours compares.
Steve Lovegrove, director and principal at McDowell Professionals, says you can never go wrong by adding a deck – as long as you create functionality; for example, putting a roof over part of it. He’s seen laundries converted to highly desirable sculleries, ranch sliders replaced with more attractive French doors, and he says insulation, quality flooring, retrofitted double-glazing and new facings on kitchen joinery will all add enormously to a home’s appeal. “General kerb appeal is important too, so tidy your fencing and paint the front door for a good impression,” he adds.