adding value to my PPOR to build equity

[the_captain]

Hi All,

Well it's been a big year for me (ups and downs) and finally I'm back on the forum. It's good to see some of the familiar hanldes are still around.

Anyhow, I currnetly have around $60K equity in my PPOR, situated in a Northern suburb of Melbourne around 6KM's from the GPO. The suburb is growing at 11% per annum and is suffering from a bit of latte lag......albeit a good thing, plus the house is on 200m from the cafe street and tram stop.

We've painted everything that moves in the house and may have even more equity but we need to get the place re-valued.

I am wanting to build more equity and fast in this place to allow me to fund the purchase of more IP's. In order to do this I figure I can get something of benfit for us i.e. a nice tuscan inspired courtyard and also have the place re-valued and utilise this equity.

The thing I am struggling with is how much value this will add and how I can reasonably estimate this.. I'm currently planning to talk to a few RE's and a valuer to get their opions on the matter, but I'm wondering if any of YOU have struggled with this situation.

I'm wanting to build a high brick wall, put in a BBQ, nice outdoor setting and a water feature. Once we have completed our plans the courtyard will be pretty special, but I'm worried that I'll overcapitalise. My gut feel is that such works will cost around $10K.

Do you melbournites / renno'ers have any advice / opinions for me.

Thanks in advance and Merry Xmas!!!

 

[Aceyducey]

the_captain,

I wouldn't think that an outdoor area would add much value to the place...you might get your money 'back' though.

The best way to add value is to add/improve rooms. Kitchen & bathroom are the main add-value rooms - provided you control the cost

Cheers,

Aceyducey

 

[Carolyn]

Well ahoy there captain

I agree with acey on the "Kitchen bathroom" thing - they are universally big attraction (or detraction) items on buyers.

However in regards to your other changes you are contemplating ...you have to know what your market wants. Ducted Heating rates pretty high here in the A.C.T but I'm sure would not get any point in Cairns....look at other homes that are selling as "renovated" in your area. Look at what standard they have gone, level of finishes, where have they the spent money. Also look at potentially what would be the max. range you could expect for your home in your area? Your courtyard idea could fit in well in the area and be what people are after??


Trust your own research also, everyone wants to give you there ideas(not always wanted). Currently I am madly getting quotes from people to reno our PPOR (finally, yay) and everyone wants to give there 2 cents worth . From the doorman "oh you wouldn't want to spend that when you are selling" from the painter "would you worry about that if your selling?".... I have done my research and I know the potential available in our home so I am doing my thing ....and best of all our gain will be tax free!!!

The auction squad reno book (about $25) is a very worthwhile investment. As well as heaps of other info,it gives you the top 10 reno's that are done on a nationwide and state basis. Kitchens , Bathrooms, Outdoor entertaining are pretty much the top of the list . Also , at the end of the day it is your home so enjoy it.

Carolyn

 

[RightValue]

Hi Captain,

Acey is spot on (as usual).

Remember that land appreciates and improvements depreciate. Capital growth in a suburb (the magical 11%) is a reflection of increased land values.

Painting a house is nice and a good cheap way to add some value, but it is not a renovated house unless the kitchen and bathroom are renovated as well.

A nice new courtyard will look nice but the overall added value of your improvements is mostly in the dwelling, not the landscaping.

However if you do it right you may well get back what you pay for the courtyard.

Remember that the market in Melbourne is softening quite a bit at the moment (especially in the inner areas) and valuers are not inclined to be overly generous in their figures at such times.

Personally, I would get the place valued sooner rather than later before valuers get too much sales evidence to confirm a pull back in values.

Just my thoughts,

cheers,
RightValue