Is it essential to update your kitchen before selling?
Homeowners often ask us what happens to their home's value if they spend $50,000 or so on a new kitchen. Could they add the renovation cost onto the asking price, and maybe something extra for the inconvenience?
If only it was that easy! The value of any property is determined by far more than a renovation.
The biggest, single factor that influences price is the ratio between the supply of, and demand for, property when you put your home on the market.
If supply is thin and demand high, your kitchen upgrade could pay for itself many times over. Flip the scenario, and it's unlikely you'd make all your money back.
The best way to extract a return on investment is to put the property on the market immediately after the work is finished. Renovations that are two or three years old lose their gloss – and value.
Buyers make a judgement on price based on the entire house. A cool kitchen will likely attract interest and could even strengthen your negotiating position if several people are interested in purchasing.
However, it's unlikely you'll ever know for sure how much of a role your new kitchen played in that lovely scenario.
So don't obsess about the kitchen too much, or think that an upgrade has to be expensive. Here are some other ideas to attract buyer interest.
- Kitchen capers – Rather than going the whole hog and spending tens of thousands on a rip and rebuild, consider just updating for sale by replacing the fascia to drawers and cabinets, adding a new benchtop and handles – and that can look great, too. Go for a classic look.
- Better bathrooms – This is a high-influence area of the home, too. Shabby bathrooms scream warnings to prospective buyers but scrubbing til it sparkles, updating the grouting, replacing shower screens, a new vanity and new tapware may be enough to give it a new lease on life.
- Attic conversation – If this adds an extra bedroom, then you will be able to build the cost into the price with some confidence. The number of bedrooms is one of the core measurements that buyers use before they agree to inspect a property.
- Go for green – An energy-efficient home is all the rage right now that could well deliver a return on investment. This is a premium feature that appeals to an increasingly wide audience of buyers so elements like rain water tanks, solar power or energy efficiency can all be worthwhile longer term investments that support your lifestyle as well as add value to the home.
- Brush strokes – Repainting your home will give it a lift and buyers respond favorably. But they're unlikely to put a specific value on the work. That said, if your home is a little rundown, you'll lose a lot of potential buyers. So, it would be a good investment in those circumstances.
- Install a home office – An increasing number of buyers are ruling out prospective homes because they don't have office facilities. The Covid-19 crisis has made it an essential item for many professionals with the increased emphasis on working from home becoming part of our work mix.