Can you Increase the Value of your Home?
Category Expert Insight
Can you Increase the Value of your Home?
In a previous article Seeff Properties gave an overview of property valuations and why they are important to individuals and businesses. Our focus now turns to a frequently asked question: "What can I do to improve the value of my home?"
It is important to draw a distinction between the valuation given on a property and the selling price (or listing price) of that property. The home's valuation is determined by valuation practitioners who use international industry standards to calculate the open market value of a property. The selling price of a property has a wide range of determinants (such as market trading conditions, personal taste and emotion) and is a very subjective matter (and will be covered in a separate article). It then goes to say that a valuation is not necessarily the price at which a property will sell for, it is a guide for the value of that property at that time.
What Influences a Valuation?
Property valuation is primarily determined by the following:
- Location: proximity to amenities, access, zoning and potential for future development, desirability and usage of the area.
- Plot size and property size: including whether the plot has been developed and to what extent.
- Facilities of the property: for example, number of bedrooms, any additional features of the property.
- Condition and age of the property.
- Construction material: for example, roof type, fixtures, and finishes.
Variable Factors
Looking at the above list, it is clear that certain influences on the valuation of a property cannot be changed. That includes aspects such as the location of the property and the size of the land. However, there are a few elements that could be influenced and are variable. It should be noted that improving the value of your home is a very tricky task and, in some instances, not possible.
Variable elements of a property value, and elements that could be looked at in order to increase the value of the property include the facilities the property offers, the condition of the property, and its finishes.
Property Upgrades and Renovations
Before embarking on any form of renovation or upgrade to your property (for the purposes of increasing its value) you should always seek advise from a professional, registered valuer. "A valuer would be able to advise if the money being spent on upgrades equates to an increased value" says Dabilo Mokobi, General Manager of Valuations at Seeff Properties. If a lot of money is spend on upgrades that merely add to the home's aesthetic appeal and nothing to the value then this would end up just putting you out of pocket. A common problem with this is called overcapitalization and that is when the value of the house plus renovation costs exceeds to expected sale value of the property.
It is also very important to look at the area that the property is in to gauge the level of appropriate upgrades and renovations. This would specifically mean that you shouldn't renovate your house to mansion proportions when it is located in a low to medium cost area. The location of the home has to be looked at and any renovations or upgrades should be in keeping with the area.
If the home has a large, open front yard, paving a driveway and adding parking space could improve the value. The same can be said of a boundary wall versus a fence on the property.
Building versus Renovating
Some homes are located on large plots and have space to add additional outbuildings or a cottage. This could certainly improve the value of the property, assuming that the cost of the build does not outweigh that value. Other properties may benefit from a renovation such as converting a garage to an additional bedroom or living space for the property. Again, professional advice should be sought before embarking on such renovations.
Each individual property has unique features and some will certainly benefit from renovations. Older homes generally have several bedrooms sharing one common bathroom. Perhaps the property would benefit from an additional bathroom. It would be more cost effective if space within the existing structure allows for this, rather than constructing a new extension to the property.
There are some homes that have "dead space" - under or unutilized space that could be repurposed. Double-storey homes sometimes have a storage space under the stairs - could this space be better utilised as a study area or even a guest toilet?
Improving Condition
The condition of a property is particularly apparent in bathrooms and kitchens. Broken tiles and sanitaryware could have an influence on the property's value, to a certain extent. Rushing out and overhauling your kitchen will not necessarily increase the home's value. Improving the condition of the property needs to be considered very carefully to ensure that the spend is the right thing to do.
Flooring is another aspect that could determine the home's value. But, as with all these elements, it is important to assess the return on investment. In some cases new flooring will add to the property's value and in other cases, it will merely end up being a massive expense that can't be recouped.
In summary, it is highly advisable to talk to a qualified and registered valuer about the specifics of your property. There is no hard and set rule for increasing a home's value. Kim Bekker, Seeff Properties Botswana Licensee notes that "It is certainly a lot easier to look at improving the marketability and sale appeal of the property as that is a more subjective topic". Property valuations are heavily influenced by factors that cannot be changed. This makes trying to affect an increase in value very tricky and, if not accurately assessed, could end up costing you a lot more money that the value that is added.
If you have any queries on this or would like to learn more about the valuation services offered by Seeff Properties, please contact the office on 393 9372.
Author: Seeff Properties Botswana
Author: Seeff Properties Botswana
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