ADDING value to a property through developing can be both exciting and stressful — but if you get it right
ADDING value to a property through developing can be both exciting and stressful — but if you get it right it can also be extremely profitable, writes Jacky Hayler.
Whether you are the next Sarah Beeny or simply looking to ensure an extension will cover its costs in added house value, the basic principles are the same. To successfully climb the property ladder and to make the wisest investment decisions, you need to take a step back and view your property through a house buyer’s eyes.
The development of your property is now your “business”, your property is your “product” and, as with any business, your first concern needs to be your consumer. It is easy to assume that your product is perfect for your home buyer, because they have identical taste to you. It is also easy to forget that many people in the property market enjoy the process of changing the property to suit their own tastes. Here are a few points to consider.
Who is your potential house buyer?
This may not be as obvious as you first think as there are a huge number of variables. Whilst schools for families, transport links for commuters, nightlife for young couples and so on may all be relatively obvious, you may have missed the significance of good dog-walking opportunities or the proximity to the golf club.
The best starting point is to seek the advice from a local estate agent. You can book a free market appraisal of your property and local property experts can then give you guidance on who your market might be.
Increasing your property’s appeal
Once you have established who your likely home buyer will be, the next step is to establish how you can enhance the property’s appeal to that market. This may relate to the total amount of space, how it is laid out or simply the presentation. A further source of useful information can be found by taking a tour of local new build developments. Major house builders spend thousands on market research to discover what their property buyers are looking for.
A visit to a show home will tell you a lot about popular housing market trends for things like en-suite bathrooms, utility rooms and downstairs cloakrooms. You may also be inspired by some of their styles and techniques on dressing the house. Most new build developments will contain a variety of houses and apartments. Take a look at the brochures and floor plans for the different options, as you should find something which has similarities to your property. They will also have creative ways of making the most of the square footage available.
Learn from successful property developers
This is yet another “pair of eyes” through which you can view a property on the market. One of the reasons builders make such successful property developers themselves is because they know how to carry out the development in the most cost-effective way possible. All materials and labour will be sourced shrewdly. House extensions, loft conversions and conservatories will be added to the property wherever possible. Rooms will be knocked through to make open-plan areas and cellars (where present) will be used, all for the purpose of increasing the value of the property. They are very successful at it, too. Be aware, though, that in the majority of cases planning permission must be sought to ensure legal compliance.
Consulting a builder on the costs of your proposed property development will not only ensure you have anticipated all the costs involved, but they may also be able to guide you towards achieving a more cost-effective solution.
Increase square footage to increase house sale prices
The most basic way of increasing value is to increase the square footage. In almost every case a larger house in the same location will have a higher house price than a small one of similar condition. However, it is worth noting that you can “overdevelop” a property. A huge house on a very small plot will have limited appeal. You want your house to appeal to the widest possible audience in order to increase demand.
Features such as garages, swimming pools, a quality kitchen and bathroom will also add value. However, there is a danger that you might not recover the initial cost of these things in the eventual property sale. A double garage can cost around £10,000 to have built, but it is not guaranteed that it will make £10,000 worth of difference in the value.