Renovating to Sell

Thinking a renovation might give your property the edge in today’s buyer’s market? Renovating is a great way of adding value to your home. But like most creative projects renovating can be frustrating and stressful – that’s where a Loan Market mortgage broker can help.

Depending on the size of your renovation project, you could need anything from a few thousand to hundreds of thousands of dollars. If you already have an existing home loan then a Loan Market Mortgage broker will help you explore a number of competitive refinance options.

Redraw Facility – For smaller projects such as a new bathroom or sun deck

Loan top ups – For small to medium sized renovations

Home Equity loans – For medium sized projects such as a kitchen or pool

Before starting your renovation project, there are some matters to consider:

  • Research your local market: how have sales of renovated properties compared with sales of original-condition properties? If poorly, you will need to exercise a great deal of caution when deciding whether and how to renovate.
  • Be wary of over-capitalising a property located in a mortgage fringe area, as the amount spent on renovations may not translate to real market value.
  • Who are the potential buyers of the property? Renovate to your target market.
  • Is your block big enough to extend the dwelling? How much land are you willing to ‘give up’?
  • Your location is an important factor to consider: a good location adds value e.g. next to transport and shops.

Here are some examples of types of renovations that may increase the value of property:

  • Bigger, updated kitchens – a large walk-in pantry
  • Large bathrooms – minimum of two including ensuite – with separate bath and shower
  • Restoration of a home’s period features
  • Modernising updates to a non-period or limited appeal home
  • Outdoor entertainment areas, including outdoor ‘rooms’
  • Additional living spaces, e.g. rumpus room, home theatre room
  • Car space – especially in inner-city areas. Basement car spaces attract a premium

The general rule is don’t overcapitalise, and don’t spend more than 40% of your home value on renovations. For more information on your home renovation loan options, book your free home loan assessment today.

Loan Market & WBP Property Group

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