The combination of years of strong capital growth and the negativity and uncertainty about the world economic turmoil have finally put our property market in a slump.
Property markets are generally driven by the country’s economic fundamentals and market sentiment. Australia’s fundamentals are strong, which means for the long term, property should remain strong but in the short term, market performance will be largely influenced by market sentiment.
Some investors will do well in the current market. In times of market change there are always some investors who do well, while the rest of us become paralysed with indecision and inaction,and sit on the sidelines.
The type of investment strategy that will always be a winner in any market is buying a well located property and adding value to it. Choosing a property with renovation potential or one with development potential gives you the opportunity to add value and improve its capital growth.
If you don’t have any experience with property developments you will need the help and advice of someone who does.
But when it comes to renovations most people think they can do as good a job as anyone. Here are a few tips you may want to follow anyway:
- Overcapitalizing – Do not spend more than you need to, the surrounding houses can influence your resale value.
- Quality of renovation – The renovation work should be in keeping with the existing building style.
- Quality of fittings – The use of expensive fixtures and fittings does not automatically mean you will be able to sell for a higher price. What is far more important is quality workmanship and functionality.
- Current lifestyles – embrace the needs of modern living and offer large functional living areas that allow the indoor living area to naturally flow to the outdoor entertainment area.
- Plan your renovation carefully, get professional advice and use good tradespeople, not only will they do a better job, but they will also save you time and money.
