How can you build equity in your home – either to use the equity, or to benefit when you sell? Sharon Cullwick, executive officer of the New Zealand Property Investors’ Federation, explains.
5. Renovate, renovate, renovate
Renovating might increase the sale value or your valuation figure. Modernise your kitchen and bathroom. Although there is a cost involved in this, if you are selling you will often recoup the cost and potentially a lot more. Buyers are often put off by any unfinished work and are not necessarily willing to do any of the renovating themselves. Add more rooms, convert a carport into a garage or games room, or add an en-suite. Do your research and consult experts before starting renovations.
4. Subdivide and conquer
If the property is in a high demand area, you may want to redevelop the site. Check to see what council consents you need before subdividing the land. You then have the option to sell off the section or build another house. Speak to your accountant before starting as there could be tax implications.
3. Tidy the house and section
Small improvements don’t have to cost the earth and can make a house look much more appealing to potential buyers or a valuer. Trim trees, tidy the section, mow the lawns, and remove rubbish. Tidy up any fences or replace and paint them. Remove any rubbish bins visible from the street, or anything else that might put someone off. A low maintenance outdoor area is always appealing.
2. Spruce up, then revalue
Once you’ve sorted the outside, look at ways to improve the inside before getting the house revalued. Have a friend walk through the property and get them to point out the things you don’t see yourself. Keep to neutral, light, classic colours - a fresh coat of white paint or new carpet makes a huge difference. Make your home appeal to what most people like - even if it’s not to your exact tastes. Often the costs of hiring a professional to help with this process is worth it. A landscape gardener or interior decorator can give cheap ideas to change things around and get the most out of your property. If you’re selling, marketing is everything. Make sure your house is styled well and use professional photographers.
1. Or you could just get the home revalued
A new valuation may reveal an increase in value, without you having to do any work. If your home has increased in value since you’ve bought it based on market conditions, you’re in luck. If you have increased equity, you may be able to use this - or some of it - to buy another property, however bank serviceability requirement changes have made this harder to do. Before booking a valuer, approach your bank and discuss what your future needs are as they have a list of approved valuers to use.
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