Alfresco or no alfresco?

Hi guys,

I am building my first house through Burbank in Wallan, Victoria

I am playing with the idea of adding an alfresco area to the contract, for roughly $10,000

the alfresco area is 4.1m X 5.6m to the rear of the house

now, im wondering, if this will add more value to my house than the initial $10,000 to build?

what do you guys think?

the house will be my PPOR for a few years, but after that it will become an IP

so i guess it will be more appealing to tenants, and can charge more rent with it?

my current house & land has been valued by valuers (by the bank) at $300,000, do you think with the alfresco area it will be valued at $310,000 so alfresco just covers itself?

or will it give me more equity because the new value of my house will come in at $320,000 or somthing?

i have no idea so appreciate any comments positive or negative.

thanks

josh
 
Alfresco - not sure if it adds any increase in value but it certainly would be more appealing to tenants and those living in the PPOR.

The other alternative would be to build a pergola for $4k but its not the same as a proper alfresco area.

I would spend the extra $10k.
 
now, im wondering, if this will add more value to my house than the initial $10,000 to build?

$10K on a $310K house represents 3.2%.

A registered valuer is allowed + - 5% = you will never know ;) as you can't value that closely.

Tenants might like it. It might add $5-8K of val or not.
 
Not sure if it does add value, but surely it would being under the main roof. I think an alfresco under the main roof looks better then added patio's or pergola's, think they look cheap even though they aren't.
 
thanks guys, yes i am seriously considering it, however it will make my budget a lot tighter, i dont particulalry want it whilst i live in it, yes it would be nice, but i dont care if its there or not

i really want to know if it would add a great deal of value to the house to access equity or get more rent when it is my IP
 
If it is under the main roof then surely it is calculated in the square meterage of the house. More square meters = greater value.

Any valuer I've met tends to pull out the measuring tape, so it should work in your favour down the track. Using the identical house next door example (theirs doesn't have an alfresco) , then yours should be worth more.

I doubt it will make noticable difference in rent return, but it might help you secure the tenant in the first place.
 
now, im wondering, if this will add more value to my house than the initial $10,000 to build?

No it is highly unlikley it will add any more to value than cost.

It will be lucky to add $10k to the value, but if you go for a refinace during construction the valuer may well add the cost to the on completion value.

If you are going to be requiring more money from the bank, get the quote for the Alfresco from the builder and an amended plan and submit it to your financier to get a new valuation done before you commit.

good luck

RightValue
 
i dont particulalry want it whilst i live in it, yes it would be nice, but i dont care if its there or not

You have really answered your own question right here.

If you don't particularly want it why would you pay more for it?

Take that thought one step removed .. A potential purchaser or renter will most likely have the same opinion .. so would they pay more for it?

Unless you find a purchaser or renter that really wants one that is...

In all the sales I have analysed I cant really say that people are prepared to pay the equivalent of cost for something like an Alfresco or large pergola. It adds a bit of value but more like about half the cost... remember land is what appreciates in value improvements depreciate.

cheers

RightValue
 
One thing you may also want to consider - if you are going to spring the 10k for an alfresco, also add a few extra dollars into your landscaping to. The reasoning being, is that when sitting in the alfresco, you'll then have a nice landscaped view to look at.

I've seen many additions where people have added a deck or alfresco and never bothered with a view and to me, the addition is not what it could be without the landscaped view.

There is nothing worse then sitting on a deck or in an alfresco area and then looking at a boring yard with a hills hoist. Do some landscaping, maybe add a water feature and deisgn it so that the view from the deck or alfresco is fully complemented by the landscaping.

This adds more value.


Thanks


g
 
Hi Jd,

I'm planning to build a pergola at the back of my cosy 13 sq unit once its completed. Afew factors made me decide its worth the money and effort.

No.1 was the added usable space. For a small unit, an extra couple of meters to entertain friends I think will be a big winner. I'm not expecting the value of the unit to sky rocket but after purchasing for 275k, spending 5k on a neat pergola and landscaped garden to match (fully agree with gg), I think it will make atleast a 200% return on cost as its still well within a reasonable price bracket for the area and...

No.2 Scarcity. I've driven around trying to sneak a peak at backyards in the area and can't say I've seen more then 1 with this done. In a suburb full of first home buyers who want the best now but can't afford it, a small unit possessing an added feature like this makes it stand out and makes potantial tenents feel special.

Thats what I'm banking on anyhow. I asked "who is my target market and how can I best service them". This fits the bill for my area. Ask yourself the same questions and see what you come up with.

Good luck
 
If the alfresco is under the main roof it will be considered as a larger home, therefore it will get valued at $1000m2 (This is the figure my banker in Qld told me they value at for a standard home build) ?,if the alfresco is 22m2,it would then be an approx 22,000 extra.

Ex: 200m2 house @ 200,000 plus land
222m2 house @ 222,000 plus land

Correct me if I am wrong.
 
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