For property developers and investors, they will typically purchase an existing property or plot of land and renovate it for commercial purposes. The idea is to sell the property afterwards at a higher price to residents or business owners or generate an income by renting it out.
But with construction costs, legal fees and more, developers have to watch their margins carefully to make a good return on investment. With this in mind, we give you 5 things you can do to maximise value of the estate and increase your overall profits.
1. Adding a Conversion
Adding a basement, loft conversion or conservatory can add significant worth to your property. Ideally you will want to confirm your construction plans early on because re-routing an entire building to add a basement is a lot of work.
But if you have an existing property, adding an extra loft extension with a bedroom and shower room will cost around £25,000 and can add an extra 20% to the value of the home.
A basement can increase the property’s asking price by 30%, although a lot more work is required. A basic conservatory can add up to 10% to the price of the home you are developing too.
2. Kerb appeal
As a developer, you need to get ‘kerb appeal’ for your property. This is the phrase that refers to making your project look good from the curb of the road, even though they might be very low cost tweaks and additions.
Examples including adding a nice front door, smart windows, flower beds on the window sills and nice lighting in the entrance of the home. These small but subtle changes can make a big impact to the potential buyer and help you sell your property at the desired price.
3. Pave over the front garden
If the front garden is very small, there is a strong argument for paving over it to increase the car parking space on the property. Especially in built up, urban areas where parking spots are scarce, having that extra space is a big selling point. Whilst paving over a small garden can cost around £10,000, it can fetch up to £50,000 extra on the value of the overall property.
4. Add solar panels
If you plan on owning the property for a long time and live in a sunny part of town, adding solar panels can be a smart way to save up to £300 a year on the utility bills. Costing between £5,000 and £7,000 to install, the overall saving over 20 years can equate to £6,000.
It is a great way to be green and make use while the sun shines. There are some government grants available meaning that for a limited time, you could get solar panels installed on your property for free.
5. Save money
An aspect of maximising value is also trying to save money and avoiding future costs. For instance, it is not worth investing heavily on furniture because most tenants will bring their own and nice sofas and chairs will depreciate in value.
Do not be tempted to do any DIY jobs yourself because paying that little bit extra can avoid further costs down the line. You must similarly carry out all sufficient tests like air testing, noise testing and sound insulation testing so that you avoid any complaints and potential lawsuits from clients.
Another key point is not to ‘over-spruce’ a property. You need to get an idea of what people pay for rent or property around that road and area and making a place too grand will make people feel like they are overspending and not getting value.