We all want the maximum return on our property when selling, but the old adage ‘you’ve got to spend money to make money’ can be a tough decision to make. At the fear of over capitalising on a property, many rely on market conditions to get a higher rate on return. But what if a relatively small investment could return $40,000 in value?
We take a look at this property’s mini-makeover and assess the costs, value and return.
The property
This 4 bedroom, 1.5 bathroom, 1 car space home in the Central Coast suburb of Wyoming was purchased in 2011 as an investment property for the owner’s Self Managed Super Fund (SMSF).
The sale listing – before the makeover
Photo courtesy of Raine & Horne Gosford
As the property was tenanted, the owners listed the property on the market through a local real estate agent and commenced open house viewings. The property was advertised for ‘offers over $480,000’.
Unfortunately, the tenants turned out to be hoarders and the presentation was cluttered and uninviting.
After two open house viewings and despite a very hot market, not one offer was made on the property. It appeared that the value of the property was lower than $480,000.
The owners were advised by the real estate agent to remove the property from the market until after the tenants had vacated in August.
The mini-makeover
Once the tenants were out, it became obvious that the walls were stained with dirt, tar and nicotine, carpet in the 4th bedroom was damaged, the timber deck had been damaged and the commercial style vertical blinds from the 1990’s just had to go. The property was now empty, so the owners made the decision to hire furniture. They realised that purchasing furniture, whilst potentially cheaper, was time consuming and would not achieve the same look and feel as a professional stylist would.
All up, the owners spent $8,324 on the mini-makeover including some professional painting and furniture hire for a 4 week campaign. Here’s their supplier list and costs.
Blinds for living, kitchen, 4th bedroom, BlindsOnline $1,051.00
Furniture hire for whole house and deck, Interiormakeovers.com.au $3,500
Bedroom master paint , Bunnings $56
2nd bedroom paint, Bunnings $56
3rd bedroom paint, Bunnings $56
Living room, stairwell, kitchen painting, CJF Painting and Decorating$1,800
Deck paint, Bunnings $90
Front yard plants, soil & mulch, Bunnings $150
Exterior house washing, Centralcoastpressurecleaning.com.au$685
Equipment, Bunnings $200
New vinyl flooring for 4th bedroom, Flooring Xtra $680
TOTAL $8,324
Property styling
The before and after photos below show the impact good property styling can achieve. Property styling is particularly useful in properties that have a unique floorplan. This property has two living areas and a 4th bedroom downstairs which was a garage conversion. The stylist was able to zone the areas to showcase the property’s full potential.
While buyers aren’t buying the furniture, they are buying the lifestyle that goes with the property. Creating an enviable environment makes any property more enticing. Project home companies have been very successful in doing this. Their display homes are styled in a way that taps into a buyer’s sub conscious. It gives the buyer a vision of what they could have if they bought that property.
The sale listing – after the mini-makeover
After just 7 days from the tenants vacating the property, the mini-makeover was complete and back on the market. New photos were taken and the advertisement went up.
With only 2 days on realestate.com.au and domain.com.au the property had 668 views on realestate.com.au and the Saturday open had 33 groups through. The real estate agent said the volume of groups to this property exceeded all their other listings that weekend.
The result…
33 groups through the property on the first open house. 5 offers made that same day.
The owners are now considering the offers, 3 of which are above $500,000.
The big difference
Median property price for Wyoming
This property has had two bites of the cherry. It was first listed in July which was the peak of the hot market for the high demand suburb of Wyoming. It should have been sold in a few days based on the competition and investors flooding to the suburb. But back in July, the property’s presentation was below standard.
The mini-makeover has made a vast difference, and it wasn’t until the new furniture was in the property that the real estate agent actually said ‘I didn’t realise how big the house is!’
Return on investment
It’s likely the property will sell for close to $520,000. Given the first sales campaign returned no offers, we value this mini-makeover at $40,000. The makeover investment was 1.6% of the property’s projected value.