Whether you’re buying your forever home or you’re eyeing a potential stepping stone to something bigger, keeping an eye on the resale potential can help you to maximise your investment when it’s time to sell. Here are some key features that should help the property hold or even increase its value over time.
Location, location, location
This classic real estate adage still holds true. Look for a home in a neighbourhood with a good reputation, low crime rates, high-ranking schools, and strong community amenities. Proximity to parks, shops, and restaurants can also add significant value to a home. Remember that location isn’t just about what’s close to the property right now, but also about the area’s future growth potential. Check with local city planning offices for upcoming developments that could impact property values, like new schools, shopping centres, or transportation options.
School catchment/district
Even if you don’t have children of your own, homes in top-rated school districts tend to have higher resale values. Buyers are often willing to pay a premium for homes that allow them to send their kids to reputable schools, making the property more desirable when it’s time to sell. Look into the school catchment maps for any area you're looking to buy in. For further research, explore the ratings and funding of local school catchments. All of these factors can make a noticeable impact on your resale value.
Good condition and up-to-date systems
While some of us may enjoy being handymen, many others don't want the hassle. Homes that require minimal repairs or upgrades are often more appealing to buyers. Check the condition of major systems like the roof, plumbing, electrical, and HVAC, as repairs to these can be costly and deter future buyers. If these systems are newer or higher quality, they’ll provide peace of mind both for you and any potential future buyers.
Outdoor space and curb appeal
A well-maintained outdoor space can be a major selling point for many people. Buyers today prioritise homes with verandahs, patios, or backyards that offer space for entertaining or relaxing. Landscaping and curb appeal are also important; a welcoming front yard can create a positive first impression. Look for homes with a good balance of outdoor and indoor spaces to help maximise resale value.
Kitchen and bathroom quality
Kitchen and bathroom upgrades are often some of the best investments for adding value to a home. Even if the property you’re considering doesn’t have the latest fixtures or finishes, you may want to upgrade these areas. Look for solid structures with the possibility of modernisation without extensive remodelling. Small updates to cabinets, countertops, and lighting can make a big difference in the resale potential of a home.
Functional floor plan
Open floor plans with flexible spaces are increasingly popular, especially as more people work from home. It can be a good idea to avoid homes with awkward layouts or excessive small, compartmentalised rooms. A layout that offers a balanced flow between rooms will appeal to a broad range of future buyers. Also, where possible, look for homes with more than one bathroom and a sufficient number of bedrooms, as these are practical elements that can boost resale potential.
Energy efficiency
With the rise in energy costs, efficient homes are increasingly desirable. Buyers are often willing to pay more for homes with updated insulation, energy-efficient windows, and smart home technology that reduces electricity and heating costs. Look for homes that have these features, or at least the potential to add them, to help future-proof your investment. A home with a high energy efficiency rating can also be a major selling point for environmentally-conscious buyers.
Flexibility and room for expansion
If possible, choose a property with room to expand or customise. Buyers value homes with the flexibility to add extra bedrooms, or a second story. Whether for your own growing family, or the potential to sell to somebody else in that situation, a property with potential for add-ons can be a significant plus. For those that feel like renovating, including the additions yourself can also significantly boost a home’s value when you go to sell.
Making the most of your money
When purchasing a home, you want to ensure you're making the most of your money. A few ways to do this can include the following:
Secure a solid rate for financing
While scouting the right home, don’t forget to focus on securing a good mortgage rate. Even a slightly lower interest rate can save thousands over the life of the loan, leaving you with more flexibility for future upgrades or investment. Comparing lenders can be a great way to figure out the most suitable option for your needs. For example, those in Australia can use the Compare the Market interest rates tool to compare various home loan interest rate options. Another option is to consider working with a mortgage broker to help secure the right terms for your needs. Remember that a longer repayment term may result in lower monthly payments, but you'll end up paying more interest over the life of the loan.
Ensure strong financials and budgeting
Before purchasing a home, it's essential to have strong financials and budgeting in place. This includes having a stable income, manageable debt-to-income ratio, and an emergency fund set aside for unexpected expenses. Additionally, having a budget in place allows you to track your spending and make smart decisions when it comes to home improvements or upgrades over time.
Be mindful of over-improvements
While making updates and renovations can add value to your property, be mindful not to over-improve the home for the neighbourhood. If you invest too much in upgrades that are not seen as desirable to potential buyers, you may have a hard time recouping the investment when it's time to sell. Research the market and speak with professionals to determine which upgrades should add the most value to your home.
By keeping these features in mind, you can ensure that your next home not only meets your current needs but also offers strong resale potential. This forward-thinking approach will help you optimise your investment and prepare for a profitable sale whenever the time comes to move on.
