The residential property is, for most people in the world, the largest investment that you will ever make. In Australia, 70% of the population will have home ownership, with the other 30% renting (this means that 30% is also investment property). (2008, ABS)
In the US this is much similar with 65% of total housing in owner-occupier with the other 35% in renter/investment property. (1990 USCB, "Emerging Trends in Real Estate", Price Waterhouse Coopers, 2009).
What does this mean to you?
Whether you're an owner occupier or investor what you will find is that of the 65-70% that own residential property, only about 10% know how to increase the value of that property through home improvements.
You'll hear all the time that now is not the time to invest in your property, with property markets in the US only now starting to get back on their feet and with the increase of interest rates going back up.
Banks will tell you now is not the time to borrow money for home improvements.
So how do you improve the value of your home without spending thousands of dollars?
Easy; there are so many improvements you can make to your residential property without having to spend countless amounts of cash investing into your property. What you want is to have the best amount possible of return on your investment in your home.
If you're selling or looking to increase rent on your investment property, listen closely:
1. Landscaping: possibly the quickest way to increase the value of your residential property. Put a small garden in, de-weed and fix the one up that you have, add trees. (Putting new turf in will increase the value of your home; however that can be expensive and does not always give the return that you're looking for.)
Market the landscape similar to the houses around it. When most people buy a house they buy into a lifestyle, so like any good salesman, know your market and target your niche! The look of your house will determine the face value that a valuer or buyer will give it!
Spend $200 dollars buying new plants and trimming up the place. You can usually rent grass trimmers from anywhere of $30-70. Or, even better if you have a friend with one!
Fixing your landscape can easily add anywhere from $1000-3000 on the value of your property.
2. Kitchen: There are so many quick and easy things you can do to fix up your kitchen that can easily add value to your home.
Replacing door handles, doors, lighting, water saving taps, build a small spice rack. All of these things you can do to change the value of your home for only about $100-300.
Try and stay away from changing cupboards and the overall look of your kitchen, however if you do have the money to do it I do suggest it. A good looking kitchen equals some good looking value.
If you can try changing the bench top to something more contemporary, probably cost you $500 or more depending on the material (I recommend granite, it's cheap and looks good.)
The great thing there is you can do all of those things (energy saving items are brilliant!) and can possibly increase the value of your home by an easy $1000 or more.
3. Bathroom: Most people often think that you really need to spend a couple of thousand dollars fixing up your bathroom. Thing is, in a bathroom, generally less is more. By less I mean less clutter and more space. People love a spacious bathroom!
Put water saving items in your showerhead, change the glass in the shower, replace shower handles, add a rack in the shower built in to hold things.
Easy to add a new tap for your sink, change the toilet seat, light fittings and mirror!
Even change the cupboard under the sink if you have to! Might be a bit more expensive but is definitely worth value.
Probably cost anywhere from $200-400 changing these items but well worth it. These small changes can often change the decor of your bathroom which can add big bucks to the value of your residential property, anywhere up to $2000-3000.
I bet your thinking now, these are only small numbers and won't matter much to you as the seller. Want to know why? Because you're not the one buying it!
Market price is indicative of the buyer not the seller! All of these items can easily rack up value upwards of $5000 for your property and you've probably only spent a tenth of that! That's $4500 of profit that you've made from those small things!
So when renovating don't always think big, think small first, because the little things can always add up to make a big difference in selling your property.