I hate this headline but I’ll tell you why later…
When most people think about selling, the most common question asked of agents is:
“What should we do with the place?”
Some want to know how they should present the home, should they remove furniture? take down
photos? bake bread? or make coffee as some would suggest. Sometimes one
partner is convinced that the side gate needs to be fixed first and they want us to tell their other half
to do something about it. Then there are others who ask but want our answer to be ‘no, its fine how it
is’ – they really don’t want the disruption of having tradesmen in or removing furniture.
Often the question is asked with the serious intention of doing work to the property if there will be
substantial benefit. In truth, improving a property’s value is not hard. Many things can be done and
not all have a profitable effect. But there are some things that make a significant difference to buyer’s and
return three or four-fold the money spent.
Knowing what to do and how to do it can seem like a black art. TV production companies make
drama out of the process. DIY renovators spruce a property up over a few weeks and then put the
property on the market and sell it. Following their methods you could buy a home, do work to it and
then sell it for a substantial profit! If you search with google on “how to flip a property” and you’ll
come across a wealth of advice.
The first piece of advice the guru’s give is to buy a property very cheap. Great advice! In an article by
one of these experts in Domain.com, they suggest the number 1 rule is buy 20% below market. If
you buy a house that cheap then you don’t have to be clever doing the renovation. In fact you could
probably screw up the renovation and still do well!
Anyway, back to the question of what is worthwhile to do to your property if you intend to sell. The
common advice is to look at three areas of focus. Street appeal, the kitchen and the bathroom. But
what specifically should you do? The work and changes that get the most bang for your buck are
Do too much and you’ll waste a lot of money.
Do too little and you’ll probably see no increase in value and you could even go backwards.
We aren’t experts but over the years we have seen more than a few property renovations and tidy
ups. We’ve met people who know what they are doing and others who are driven by a secret
fantasy that they should be a contestant on ‘The Block’. We have spent many ten’s of thousands of
dollars on behalf of clients doing bathrooms, kitchens, carpet, painting, landscaping and display
furniture. In many cases we have ‘before and after’ sales experience. We have marketed properties
in their original condition then with the owner deciding it’s better to do the work, taken those
properties off the market. We’ve had work done and then put them back on the market for sale. We
know the market value and the market response to their original condition. We know the money
spent and the post renovation sale prices achieved. As we have said, we aren’t experts on design
or DIY tradesmen. We use tradesman who charge full commercial rates and we don’t cut corners.
This is what we have learnt.
First let’s get a common misunderstanding out of the way,
‘Buyers will use their own imagination’
This isn’t a myth. They will use their imagination; just not in the way you hoped.
When a buyer sees something needs fixing, they don’t just stop there. If they see a repair, they
instantly think ‘what else there is at the property that needs work’. To be blunt, your buyer doesn’t
trust you. They don’t know you. An obvious problem of say, gutters rusted out in spots, alerts them
to go looking for more. They may not find anything else substantial but that won’t stop them
making allowances for undiscovered issues they are convinced lurk within. A home that has
$5,000 worth of obvious repairs becomes a home that will need
‘$50,000 spent on it’. All these quotes are exactly what buyers say to us and frequently. When we
hear these, we aren’t hearing them for the first time. We know how to translate them. This one
means, I see things that need work and I believe there is a lot more that I haven’t yet found.
Conversely most owners stop seeing what is there, particularly if it hasn’t caused them a problem.
We sometimes see water damage in ceilings where the original leak has been fixed but the
resulting water marks not painted over. Many owners say to us “its fine, the leak has been fixed,
just tell the buyer”. Buyers have an imagination so don’t let it run away with them.
Step 1: Fix the (visual) problems.
Please look at the roofing, the eaves, fascia boards, wherever there is wood rot, get it fixed. Make
sure all the cupboard doors open and close properly, mould has been cleaned and marks painted
over, blinds not bent and so on. With every sale, a buyer or a buyer’s friend will look at the property
with a critical eye to see what needs to be done. What they see, they multiply.
If there are things you can’t or don’t want to fix, go on the front foot. We have told buyers in our ads
that the paint is peeling and carpet needs to be replaced. If they believe you are not hiding
anything then they reduce their suspicion.
Step 2: Identify what’s necessary to your buyer
What’s necessary is whatever a buyer thinks would need to change before the property would
match the standard they want. For example, young families want good kitchens. Not brand new,
not commercial kitchens with the most expense appliances but good workable kitchens. Their first
home probably didn’t have a good one and they had to upgraded it. Buying their next home must
not be a step backwards. If a buyer wants a decent kitchen in the next house they buy and your
home suits them in all aspects except the kitchen, buyers will offer lower to allow for the cost of the
Step 3: Do the work to the right standards.
The key is to remove the issues. You don’t need to have the best garden, best kitchen or bathroom
out there. They just can’t be a problem. Don’t go overboard.
We have even found this with carpet in units. We had one unit that was empty and needed new
carpet. The owner left carpet samples at the property (her thinking was that buyers would prefer the
opportunity to choose their own colour). The buyers were told was they could choose the colour and
we would have it laid prior to settlement at the owner’s cost. Interest was low as were the actual
offers received. After a lot of discussion, the owner agreed to let us put new carpet down at a cost
The property sold the next week for $7,000 more than the best offer we received prior. With new
carpet the unit looked brighter, larger and a lot more inviting.
To fix up older kitchens we have done everything from replacing with new mid-standard kitchens to
having them resprayed so they look newer. Spraying involves tradesmen who know what they are
doing using two pack tile paint on the benches, doors and shelves and splash backs. The cost is
20% of a new kitchen and the result is quite astounding. Bathrooms are similar. Re-grouting tiles
and replacing a water damaged vanity are good ways to make things fresh. New tap-ware can
work a treat. The impact we want is not so much to get that wow factor but to stop them from going
wow in horror or seeing a problem that will cost them.
At the moment spraying kitchens and bathrooms can cost $4,000 – $5,000 in total for both.
Depending on what else you do, we have seen returns of three or four-fold the cost. With a new
kitchen, the cost is typically $13,000 to $17,000 depending on size and appliances. The return on
a brand new kitchen has typically been two-fold.
Step 4: Buyer’s don’t want space, they want what goes in it.
Property styling can do some heavy lifting as they say when it comes to increasing your value. It does
irk me that display furniture in a property can make it worth more to a buyer given the buyer isn’t
buying the furniture. Even I scream out, surely buyers can use their imagination! But I’ve tested it
plenty of times and as annoying as it is, each time we have spent the money, display furniture has
increased the sales prices considerably.
In marketing there is a saying, people don’t buy drills, they buy the holes the drills make. With
property, having created beautiful spaces that make sense to the buyer completes the presentation of the property.
Want $20,000 – $40,000 increase in sale price?
To put display furniture into a 2 bedroom unit will set you back around $4,500 for 6-weeks hire.
The result can be $20,000 – $40,000 extra sale price depending on what else has been done. A
little one bedroom apartment in Meadowbank had a floor area of 35 sq metres (the size of a
studio). Other same sized units in the block were selling up to $390,000. Our client used a
property stylist. We sold the unit for $450,000 with multiple buyers competing to buy. Thing is the
kitchen was very small so the stylist didn’t include a fridge. No one noticed. Everything looked right
and balanced. In houses, the cost and benefit are just as dramatic.
Stylists can be worth their weight in gold.
They use furniture that is the right size for
the rooms making rooms look bigger, creating dining and lounge spaces in rooms that most buyers
would not see the possibility. They can make spaces seem modern, lighter and more comfortable.
They don’t rely on a imagination, they override it so buyers suspend judgment. The reality is that
most people can’t judge space. Unless you’re a surveyor, you probably tell how big a room is by the
gaps between the furniture. By using the right sized furniture, rooms look bigger. They do the little
touches, so a mid-range kitchen now looks far better, a bathroom just a little more perfect. Higher
offers and a quicker sale are the result.
Step 5: No one step is more important, they are all links in a chain
This last point only makes sense at the end. Everything works together. Going all out on a kitchen
renovation and then leaving the property vacant is not the best way. The buyer will look at each one of
these areas. Value, like beauty is in the eye of the beholder. Don’t leave what a buyer sees to chance or
imagination. Be realistic about who is going to be most interested in your home and why. Look at
your home with buyers’ eyes. What will a buyer look at and say is a draw back, a negative or a must
do? If you have too many issues then you are probably shooting for the wrong buyer. Stop thinking
who has the most money, start thinking who will love this home the most; those are the people who
pay the best prices.
Fix the issues.
If the property needs maintenance, do it. Take a look at carpet and paint, the kitchen, the
bathroom and then the finishes like light fittings, taps and the gardens. Furniture comes in last. Think
of this work as building a pyramid. If the more basic elements are missed the higher level work will fail
to perform. If you just do the basics and fail to carry things through to final presentation, you’ll only
achieve marginal results.
I have used examples of units mainly because it’s easy to compare financially a unit that’s had the
work done with a near identical unit that hasn’t. With houses, the costs can be a lot more. Often it can
involve structural work which can be sensible to get done or a black hole that will destroy any financial
Done right, the profit can be substantial.
We have seen homes achieve $100,000 and
$200,000 extra with comparatively little spent. It’s not that every house can have $40,000 spent and
return $200,000. It does depends on its present condition, your starting point.