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Add $100k To Your Home’s Value

Add $100k To Your Home’s Value

Do you want to boost your home’s value by up to NZ$100,000? Amy Hamilton Chadwick explores some options.

11 October 2021

If you’re thinking about selling your home, or borrowing against it, what can you do to maximise its value? Even a small budget, spent wisely, can make a massive difference to the value of your home.

Here are some of the most cost-effective ways you could improve your home’s value, from NZ$5,000 to NZ$100,000 and beyond.

Low-budget makeover
Spend: NZ$5,000
Add up to: NZ$40,000 to the value

If you’re planning to sell and you’re on a small budget, nothing beats a thorough clean and tidy. James Goren, director of The Renovation Team, has your to-do list:

• NZ$1,000 on a landscaping tidy-up and water-blasting pavers.

• NZ$1,000 on commercial cleaning for the interior and shampooing the carpets.

• NZ$1,000 to replace curtains with neutral roller blinds.

• NZ$2,000 on brighter lightbulbs, new light switches, solar tubes for dark spaces, new doorknobs and a new letterbox.

• NZ$600: Don’t forget to put most of your personal possessions into storage – mess kills value.

“Spend that NZ$5,000 and you could add $40,000 or more,” he says. “I recently purchased a property for $570,000 that had a CV of $955,000, simply because the owners didn’t bother to clean it up and it was an absolute dump.”

Low-budget makeover + re-paint and re-carpet
Spend: NZ$20,000
Add up to: NZ$100,000 to the value

Carpets, like curtains, soak up smells – fresh carpet and a coat of paint can add serious value to your home.

• Spending NZ$15,000 on carpet and paint, in addition to the low-budget makeover, give you a total spend of NZ$20,000.

• Stage the house properly and Goren believes those changes will add as much as NZ$100,000 to the resale value of a million-dollar property.

Low-budget makeover + re-paint and re-carpet + kitchen and bathroom upgrade
Spend: NZ$40,000 to $70,000
Add up to: NZ$100,000 to $250,000 to the value

It’s an oldie but a goodie.

• Renovating both your kitchen and bathroom together will cost you NZ$40,000 to NZ$70,000 on a
NZ$1 million home.

• Add to that the repainting and re-carpeting, plus the low-budget makeover and, Goren says, “in my experience a NZ$100,000 renovation on a million-dollar property translates to a value of NZ$1.2 to NZ$1.25 million.”

Turn a dining room into a bedroom
Spend: NZ$20,000
Add up to: NZ$50,000 to the value

This has the potential to get a fantastic payback, but an awkward layout that compromises the flow will actually devalue your home, warns Goren.

• “Think carefully. Going from three bedrooms to four means you’ll be selling to a bigger family, and they’ll want a bigger living area and a second bathroom. So, you need to know what you’re doing.”

Add a bathroom
Spend: NZ$20,000
Add up to: NZ$50,000 to the value

Adding a second bathroom only adds value to a larger home: “Two bedrooms? Don’t bother. Three bedrooms is marginal. For four bedrooms, it’s a must.”

The cost of rearranging the layout will be in the tens of thousands, especially as you may need council consent. The right changes could pay off, though: “When we add a bedroom and improve the layout, for every dollar we spend we get roughly NZ$3.60 back,” says Goren.

• If you spend NZ$20,000 on a new bathroom, it’s likely to boost its value by NZ$50,000, netting you NZ$30,000.

Decking and landscaping
Spend: NZ$6,000 to $10,000
Add up to: NZ$80,000 to the value

A home that flows from an attractive interior to an appealing exterior can be a winner for buyers. A deck below one metre doesn’t need consent or a handrail and can cost between NZ$6,000 and NZ$10,000 – add some landscaping too for best results.

“If you spend NZ$50,000 on adding a nice big deck and landscaping to a million-dollar home, you might get NZ$80,000 more for it,” says Goren, giving you a net increase of NZ$60,000.

• “Having a house with a nice outdoor area puts you into a different bracket from the valuer’s point of view – the functionality is better, which pushes up the emotional value, which can push up the real value.”

Freehold a cross lease title
Spend: NZ$29,000 to $35,000
Add up to: NZ$181,000 to the value

Cross-leased properties are less desirable than ‘freehold’ fee simple titles, resulting in an estimated value reduction of between 7 per cent and 18 per cent in Auckland, according to the Opportunity Knocks report by Dr Michael Rehm.

Hamish Frizzell, director of Good+Title, which specialises in cross lease conversions, says converting is well worthwhile, because the cost is usually shared between you and a neighbour. But sometimes, one person will pay for both because it makes so much sense, he says.

The cost of conversion for a simple two-dwelling cross lease is around NZ$29,000 to NZ$35,000 including everything – you’d pay half. If both homes were worth around $1 million, the value gain would theoretically be between NZ$70,000 and NZ$180,000 on each, a net gain of NZ$55,000 to NZ$167,500 for you and the same for your neighbour.

Half of New Zealand’s cross-leases are in Auckland, but Frizzell also has plenty of clients in Canterbury: “There’s a lower value uplift, but it still makes sense, particularly if you’re already doing a boundary definition survey.”

Published 26 May 2019

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