May 30 2011
Here's an article that I just wrote for Lifestyle British Columbia Magazine on achieving the highest possible return on investment in real estate:
Improving Your Home One Investment At A Time
West Vancouver’s realty expert shares his ROI knowledge
By Eric Langhjelm
In real estate, it’s sometimes the smallest things that can make the biggest difference. It’s often surprising how much minor improvements can add to a home’s resale value.
Before home improvements, however, the most important step that you as a potential buyer can take to increase the future resale value of your home is to buy in a down market, that is to say a market where the conditions favor the buyer.
In the market I operate in, West Vancouver, there are always times in the year where inventory levels are high and buyer demand is low. When buyers entering the West Vancouver market ask me when the best time to buy is, I always recommend late spring to mid-summer (June 15 to Sept. 1) and early fall to early winter (Oct. 15 to Jan. 1).
On the flip side, always try and sell your home in an up market, where the conditions favour the seller. In West Vancouver, the best time to sell is always in the spring.
In short, buy low and sell high. Or, put another way, buy smart. Timing alone can make you money. A property in West Vancouver sold for $1,080,000 at the end of January. The purchaser put on a fresh coat of paint, removed a couple of trees, threw some nice art on the walls and sold it at $1,250,000 six weeks later.
One thing to always keep in mind is that buyers will pay more when the house appears to be up-to-date and well maintained. If there is potential for a view or potential to increase your view, go after it. Every dollar spent increasing your view will come back to you tenfold.
One way to make sure your home looks as appealing as possible is to de-clutter. Rent a storage locker and move everything you haven’t recently used into it. This will make your home appear larger than it is and will show increased storage capacity.
Another sure way to attract buyers is with cleanliness. After de-cluttering, hire a professional cleaning company to come in and do a thorough cleaning. It is worth the $250 to $300. After this initial “deep clean,” do a general clean at least once a week while your place is on the market.
One of the most profitable adjustments you could make is to add a fresh coat of paint. Touching up your home with new paint is arguably the biggest return-on-investment move you can make.
Another detail to be mindful of is keeping your home bright and “cheerful” Avoid dark colours, except as accents. Throw open your blinds and roll up your shades, and turn on all the lights, even on a bright day. I always tell people to pick up a Restoration Hardware catalogue and suggest using it as a guideline for what most buyers would like to see or what owners would like to achieve through renovating.
Amidst all the interior renovations, the outside of the house must not be forgotten! Enhance your curb appeal by putting away your tools, cleaning up yard debris and cutting the lawn. Also remember to trim the hedges, remove unsightly weeds and power-wash the driveway, gutters, windows and siding. To add a put-together touch, place fresh top soil or mulch on the garden beds and plant some bright annuals to add a pop of colour.
Always remember that when it comes to repairs, turn them into an asset. If you’ve replaced the roof, keep the receipt and provide copies to the interested party’s agent. Same goes for any other renovation or repair.
If you’re going to do more than just a lipstick (cosmetic) renovation, take out a permit. Significant renovations done without a permit can actually reduce potential resale value. The security that comes with knowing the work was done properly and to code adds substantial value.
Of the significant changes you can make, updating the kitchen and bathrooms yield the biggest return. Adding another bathroom, renovating your garage, purchasing new appliances and investing in a gas fireplace are other additions that are sure to add value to a property.
So when it comes to boosting the return on home investments take note, because every improvement you make is a step toward a more rewarding sale.
Eric Langhjelm is a realtor at Prudential Sussex Realty in West Vancouver. To learn more about Eric, visit homewitheric.com.
