House prices vs renovation costs

LydiaJ

I've heard some people say that for sellers, it's not worth doing up your house to sell it, because (apart from fresh paint on the walls) the work will cost more to do than the value it adds to the sale price.

But I've heard other people say that for buyers, it's better to buy something that needs some work doing, because then you can add value.

They can't both be true. I suspect some kinds of improvement have a much better cost/value than others. So, if any of you have experience or expertise about this sort of thing, I'd love to know which improvements you think are cheaper to do yourself, and which are cheaper to buy already in situ in the house when you buy it.

I'm not sure whether to put this on the house prices board or the house buying/selling board, so I think I'll put it on both, to tap into the knowledge of two groups of people.

Thanks.

Harry_Powell

I'm just about to buy a 'project', aka a wreck of a house that needs a lot of work and have been looking at what work adds value and what adds 'kerb appeal'. I think the rule of thumb is that if you add space to a house (i.e. a new room due to extending) then you add value to a house, whereas everything else just adds to the house's 'kerb appeal', which basically helps you to sell it but doesn't really add anything to the house price compared with the other houses in the area (but it does pay for itself as far as materials & labour are concerned).

mr_fishbulb

I'm of the opinion that houses that are in need of renovation already have an artificial premium added to the price because people believe they can "make" lots of money doing it up.

Programs such as Location, Location, Location are always showing people round houses pointing out what they can do to "add value".

IveSeenTheLight

LydiaJ wrote: »

I've heard some people say that for sellers, it's not worth doing up your house to sell it, because (apart from fresh paint on the walls) the work will cost more to do than the value it adds to the sale price.

But I've heard other people say that for buyers, it's better to buy something that needs some work doing, because then you can add value.

They can't both be true. I suspect some kinds of improvement have a much better cost/value than others. So, if any of you have experience or expertise about this sort of thing, I'd love to know which improvements you think are cheaper to do yourself, and which are cheaper to buy already in situ in the house when you buy it.

I'm not sure whether to put this on the house prices board or the house buying/selling board, so I think I'll put it on both, to tap into the knowledge of two groups of people.

Thanks.

Got an example below of very little improvement in order to maximise the buyers desire

IveSeenTheLight wrote: »

Disagree here.
I once bought a new build 4 bed detached house, bought off plan and sold when completed.
I tried initially (as per the advice I received) to sell without doing anything to the property as a fixed price but it didn't generate the interest or offers that was envisaged.
I put in carpets and dressed the property (put in furnishings) and the next two viewers both offered the full asking price.

Quite simply, people could not envisage what it would be like to live in until the property was "dressed".
This in my opinion is the vast majority of home buyers out there who do not want any hassle at home and wnat somewhere to put their feet up immediately in front of the 40" flat screen

leveller2911

Harry_Powell wrote: »

I'm just about to buy a 'project', aka a wreck of a house that needs a lot of work and have been looking at what work adds value and what adds 'kerb appeal'. I think the rule of thumb is that if you add space to a house (i.e. a new room due to extending) then you add value to a house, whereas everything else just adds to the house's 'kerb appeal', which basically helps you to sell it but doesn't really add anything to the house price compared with the other houses in the area (but it does pay for itself as far as materials & labour are concerned).

I would agree with you about adding rooms/space and adding value.But I don't agree when you say "everything else adds adds kerb ppeal".Generally speaking people are like sheep and can't see beyond their noses.I have seen so many houses sell that are then just "tarted" up with a coat of paint and little else and go on to sell for an extra £20k and in doing so adds value.(Short term)

Even seen some where people fit a kitchen for around £3k, paint throughout(costing about £1.5K ) and plastic windows for around £2k and selling for £25-40k more than they brought it for, which is a crazy return for a few weeks grafting.

The key is, new kitchen,neutral colours ,decent bathroom suite and 2nd toilet and like sheep people will buy..

I make joinery and to be honest the vast majority of people wouldn't recognise quality work if it slapped them in the face.It seems that the most important thing to most of them is "frilly rubbish"...

lostinrates

I have said before that the head of a primarily London and SE agency said to me that (his words; -every banker & his wife thinks they are a property developer- and that this had infalted the price of renovation property while people sought things to develop. Ths might have been relevent to the SE only, it might no longer be relevant (this was sometime before peak, this conversation).

I also wonder if some play of length of time in the property comes into play. I know that other people's taste rarely matches mine: so I'm reluctant to pay for it, similarly though, I'm aware I am even less likely to recoup costs of ''improvements'' as my taste is different from the norm so peole will be even less willing o pay for that! Thus, if I were buying a property for a few years, much money put on ''aesthetics'' would very unlikely to be recouped (other than ia appreciation). If I were going for longevity something to make ours however, makes more sense if it is at all cheaper than ''done'' because making losses on ''improvements'' to our taste and need is unlikely to be an issue over 20-30 years plus.

I think this is partly what we talk about when we talk about buying for a home v buying for an investment, isn't it?

toby3000

Isn't it supposed to vary form house to house? It's no good building a loft extension that makes it a five bedroom house if it only has one living room and a tiny kitchen.

It never ceases to amaze me on shows like 'Location' when people talk about they'd 'have' to do to make it 'liveable'...and I'm not talking about installing a bathroom, it's things like changing the carpets. You don't have to do any of those things, but a lot of people are unwilling to live in a house that isn't perfect these days (still all trying to keep up with the Joneses!)

LydiaJ

lostinrates wrote: »

I think this is partly what we talk about when we talk about buying for a home v buying for an investment, isn't it?

Well, partly so. But I'd like to have more of an idea of which things represent good value even from a "buy to live in it" point of view. So when I'm viewing a property I can think:

House A needs X doing - good, because I can probably do that quite cheaply compared with the effect on the price.

Or

House B needs Y doing - bad, because it'll cost me an arm and a leg to put right and probably hasn't made much difference to the asking price.

Or

House C has been tarted up to what the property !!!!!! shows call "high end finish" - bad, because I'll be paying over the odds for stuff I don't need.

I know the only real answer is to assess the price compared with similar properties in the area and get a quote or two from local tradespeople for the work (or go into B&Q and see how much the materials cost). But a general trend along the lines of "repaint walls - good, rewire all electrics - bad" or whatever would be a good place to start.

It may make my question clearer if I explain that I am not actively looking at the moment (personal circumstances not ready yet) so I'm just trying to get my head round these things. When I do buy it will be to live in long term.

toby3000 wrote: »

It never ceases to amaze me on shows like 'Location' when people talk about they'd 'have' to do to make it 'liveable'...and I'm not talking about installing a bathroom, it's things like changing the carpets. You don't have to do any of those things, but a lot of people are unwilling to live in a house that isn't perfect these days (still all trying to keep up with the Joneses!)

I've often thought that myself!

lostinrates

toby3000 wrote: »

It never ceases to amaze me on shows like 'Location' when people talk about they'd 'have' to do to make it 'liveable'...and I'm not talking about installing a bathroom, it's things like changing the carpets.

I agree, but my parents tell me that their first shared home would probably not have been mortgage able under current terms...didn't have a kitchen which has been suggested here is required. It did about two days after they moved in, in that my dad had plumbed a sink in and they had a baby belling, and a few weeks later and electric oven. The actual kitchen-y kitchen came much later.

I also thought of this when fc talked about her stairs in first home falling down.

Anyne know more about this?

Thrugelmir

A kitchen performs the same function whether you spend £3k, £15k or £30k.

What matters is the amount spent reflects the property that you are marketing.

Too often projects are personalised and not the taste of the wider market.