5 proven strategies to manufacture property price growth

Waiting for Old Father Time to generate property price growth is a respectable and common strategy. 

However, you can also take matters into your own hands and force your property’s value up with some proven money-manufacturing tactics.  

Before we go any further, I should clarify that ‘proven’ doesn’t necessarily mean ‘guaranteed’.

Investors must be smart about applying value-adding strategies properly.

For example, focusing on the wrong elements in a renovation can quickly blow the budget and any potential profit.

The refurbishment

Buying an older or worn-out property, either a house or apartment and jazzing it up is a quick, relatively cheap method of plumping up market value.

Typically, a cosmetic renovation will include new paint, refurbished kitchens and bathrooms, adding air-conditioning, some front and back yard TLC, new fixtures and any repairs.

And unless you start moving walls, council approval shouldn’t be necessary.

Using some numbers as an example, buying a $580,000 property and spending $50,000 on a facelift can result in a property worth $660-$680,000.

Again, the changes undertaken need to be in line with the market and the value of the street, otherwise you’re throwing away money and time.

A full-scale renovation  

A renovation is a much larger project, but it can yield big numbers in terms of property value increase.

A proven tactic is to find the worst house in the best street and doa  major renovation to bring it in line with the value of its neighbours.

Structural renovations usually require council permits meaning they can take months to complete, so you need the finances to support a long vacancy period.

The most important factor of a large-scale renovation is keeping the market in mind.

Over-capitalising or missing the target market can turn profit into pain.

Changing the property to suit the market

Is your property missing something the market wants?

If you own a two-bedroom home, adding a third bedroom could boost the property’s worth by an easy $40 – $50,000.

The same applies to garages and bathrooms, all of which can often be make-or-break for buyers and renters.

Doing your market research should help you determine how much value could be added with the addition of an extra space.

Developing

Developing a property – that is, building a multi-dwelling building on the land – is more of a risky game, and it’s not for everyone.

Often the largest hurdle for investors is finance.

A knock-down and new duplex build is costly venture that can take a number of years, compared to the quick turnaround of a ‘buy and rent’ property.

There’s also a lot that can go wrong, including council and builder holdups, and a market that may change during the build time.

However, if you’ve got the confidence, knowledge and finances, a development is an excellent way to earn multiple returns from one piece of land and improve the land’s value simultaneously.

Buying BMV (Below Market Value)

Ok, this one isn’t necessarily manufacturing price growth with your own two hands, but it is a way of buying with instant value in your pocket.  

While some purchasers see buyer’s agents as another expense on top of their purchase, in fact these agents are extremely skilled at driving a hard bargain, and they’re well-connected with selling agents and can often find off market properties.

A good buyer’s agent will often cover their own fee and more with their negotiating power or by hunting down motivated sellers and off market properties.

Forcing your own price growth is not easy, but it’s also not impossible.

These five strategies have proven themselves time and time again – and for investors who are committed to building value themselves, they can certainly overtake Father Time in the capital growth race.

from Property UpdateProperty Update https://propertyupdate.com.au/5-proven-strategies-to-manufacture-property-price-growth/