Reform a home to increase its value
The valuation of a home, far from being a static value, depends on numerous factors such as the area where it is located, the dimensions, orientation and the state of the home, as well as the current market price.
The purchase price and especially the dynamics of the market will determine our chances of revaluing a home in the market in the short or long term, or simply, to improve the living conditions of its inhabitants.
In this sense, the approach of a solution to increase the value of a home should not be taken lightly. It is advisable to carry out an in-depth study to correlate and balance the factors, in order to find the optimal range between the investment and the market sale price. From the perspective of interior design, any well-thought-out and executed reform entails an added value that revalues any home upwards.
At the time of the real estate bubble, where the outlook for revaluation was high, many investors saw the market opportunity that was supposed to buy something cheap to reform to sell it a posteriori adding the revaluation of the original property and the value of the renovated property, ready to enter to live.
This benefit was maximized when the actions to be carried out were not of much draft, or the property was in a highly coveted area with little or no new housing. The prices of construction for new construction and reform are not the same, contrary to what we can think of in some branches it is cheaper to start from scratch and put everything new than to recover the existing.
Zona de bathroom in the attic of an old Masia in l’Empordà
Increase the value | When can it be interesting to carry out a reform?
In similar conditions of size, area and orientation, a reformed house has more value than a house to be reformed. This could be a good argument to reform. But we must take into account the market moment. In situations of price boom, the reform is added to the revaluation of the home in its original state. In situations of stagnation, very slow growth or decrease the calculation becomes complicated.
Although the general context is not the most favorable, we must attend if it is a booming area, where new businesses are moving. If you are one of the first to intuit and have investment capacity, these are good opportunities, although they are increasingly scarce. If this is not the case, we should value very well the actions to be carried out so as not to add an investment higher than market prices for a reformed apartment.
If we propose the revaluation of the property by reform as a business, we must consider the possibilities of continuity of the wheel. That is to say, to reinvest the surplus value and to minimize the taxes to pay.
If our perspective is not that of an investor. But it is our home, at least for a few years, the possibility of revaluing the house for future sale or rent is a good argument to reform and update it. Thus, a home can be treated as an investment both in the short and long term. You can enjoy the use of housing in the present with a view to its sale in the future for the return of an investment and acquire, perhaps, a house of greater value or better adapted to personal conditions.
Double room on the upper floor of a detached house
Assumptions to invest in the increase in the value of a home:
- Strategic investment: housing is used as a mere investment instrument, so it will seek to maximize your sales return through the balance between the investment of the reform and the market price.
- Life project: Personal and family needs can change-the family increases and with it, the spatial needs as well. In this sense, the economic capacity may not allow to acquire a larger home in advance. As a solution you can buy a house, increase its value through the reform and after enjoying it, sell to buy another bigger house with that return.
These are the main assumptions, but we could also find a multitude of intermediate and alternative ways such as seeking profitability in the luxury rental market or a means to access a home in a revaluation area, as we have pointed out before.
What aspects will bring greater added value to a reformed house?
The ideal would be to sell / buy a newly renovated house, ready to move into. Normally we save, to buy something new, but not to reform the existing to seek a revaluation. The calculation of the differential is always risky, and in the time of a reform can change many things that make our forecast is not entirely right.
The ideal is to keep the house looking good. To do this, it does not need to be new, but the materials and distributions used are contemporary. A good natural parquet, even if it ages, maintains an attractive appearance and great durability. If we decide to put a porcelain tile, it is best to maintain an organic chromatic style. Nature as a referent ends up always working as an insurance against the passage of time.
In any case, it is always preferable to contribute little and good, that much and bad. Another way is the singularity. If our house stands out for some reason, for a terrace very well equipped, for large windows, for a large social area, or for elements of the original construction. We will have something to stand out in a complicated market like the current one.
Take advantage of original elements that give uniqueness to the property
Evaluation | Is a reform profitable?
To know if it is profitable, it is convenient to do a market study of the area to see what is offered in the area and to what quantities. After that, it is convenient to value the home in its original state and the budget to calculate if it can be a profitable investment.
Currently, a reformed house can revalue its market price between 10% and 20%.
Approach and execution
When the decision has already been made with the budget, the revaluation and the market price, you can proceed to the strategy to offer an added value to the house, which will change according to the time, the equipment or even the legislation- such as energy efficiency.
Whether you are looking for immediate or long-term profitability, you should study each dwelling in depth in conjunction with the rest of the factors. For this, nothing better than having the help of interior designers and expert architects.