News - Property value: 6 ways to impress the valuer
The kitchen's make or break -- but avoid overcapitalising, add functionality, and fit with the rest of the property.
The kitchen's make or break -- but avoid overcapitalising, add functionality, and fit with the rest of the property.

Property value: 6 ways to impress the valuer

The result of a property valuation could make the difference between whether you will be approved for finance or not. So what could drag down the value and what could boost it?

Mortgage lenders use a valuation – a formal report completed by an accredited valuer – to ensure the property you want to purchase is suitable security for a loan and that the market value is high enough to cover the mortgage if there's a forced sale. So it's important to know what could increase or reduce the property's value.

When inspecting the property, a valuer will take a number of factors into account. These include comparable sales of nearby properties, risk ratings for considerations such as environmental risks and market risks, and nearby amenities including shopping centres, hospitals, parks and schools. Although homeowners might have little control over some of these, there are some simple ways to improve your odds of getting the best valuation.

If you're looking to refinance, sell your property or use your equity to build your investment portfolio, here are six things that could boost the value of a property.

1. Property size

 

Put simply, the more floor space, the better. The minimum property size that a lender is willing to loan money for will differ from lender to lender, but generally speaking, the floor space (excluding balcony and parking area) will need to meet a 45-50 square metre minimum. A renovation that increases the overall floor space could help to improve your valuation.

2. Presentation and layout

 

Tidying the garden and cleaning up clutter around the house may seem trivial, but a valuer's first impression of your property could influence the price tag.

In addition, if your property is unkempt with personal items and rubbish strewn across the floor, the valuer might overlook the quality of the flooring or other fixtures that are obscured from view.

It's also important to fix any issues with the condition of your property – such as peeling paint or damaged carpet – before inspection, as these could drive value down.

3. Number of bedrooms and bathrooms

 

Generally speaking, the more bedrooms a property has, the more it's worth.

You may find that you're able to renovate the current layout to add an extra bedroom without compromising other value-impacting space.

But balance is also important – three or more bedrooms have less market appeal when there's only one bathroom. In this situation, it may also be worth installing a second bathroom or ensuite.

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4. The condition of the kitchen

 

The kitchen will make or break a sale, so the valuer will inspect it closely. The fittings, amount of storage, bench space, appliances and the overall space of the kitchen are all taken into consideration.

However, if you do decide to renovate, don't get too carried away – the ends may not necessarily justify the means. If you create the ultimate kitchen with expensive fittings and benchtops but it doesn't match the rest of the house, a newly renovated kitchen may not add as much value as you are expecting.

Add functionality where it adds value, but ensure the fixtures and fittings are appropriate for the property.

5. Parking

 

In a busy urban area, a parking spot is a huge perk that may immediately boost the value of your property. By the same token, if your property is located in a street where every other house has off-street parking and you don't, this could also drive the property value down.

6. Unfinished renovations

 

A valuer assesses the property based on how it looks on one day, not on what it might look like when renovations are complete, so if you are planning to start a project, make sure it's finished before your valuation.

If you are halfway through a bathroom renovation, it could negatively impact the property value and lead the valuer to provide poor comments around saleability.

The lender may then insist on the renovation being completed before they allow you to increase your loan or they won't accept it as security if you are looking to sell to someone else.

If you are considering renovating, one option you may wish to consider is using your home loan to fund your renovation. Some renovators refinance their home loan to access more money and finance the renovation.

Not sure how much you can borrow? Find out if you pre-qualify for a home loan using our two-step qualification tool.

 

This material has been prepared for information purposes only. This should not be taken as constituting professional advice. You should consider seeking independent legal, financial, taxation or other advice to determine how this information relates to your own circumstances.

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