REFORMING A HOUSE TO INCREASE ITS VALUE

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The value of a house, far from being static, depends on many factors such as the area where it is located, the size, orientation and condition of the house, as well as the current market price.

The purchase price and above all the dynamics of the market will determine our chances of revaluing a house on the market in the short or long term, or simply improve the living conditions of its inhabitants.

 

In this sense, the approach of a solution to increase the value of a house 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 sale price in the market. From the point of view of interior design, any well thought out and executed reform brings an added value that revalues any home upwards.

 

At the time of the real estate bubble, where the prospects of revaluation were high, many investors saw the market opportunity that was supposed to buy something cheap to reform to sell it later by adding the revaluation of the original property and the value of the renovated property, ready to move in.

 

This benefit was maximized when the actions to be taken were not very deep, or the property was in a very coveted area with little or no new housing. The prices of construction for new buildings and renovation are not the same, contrary to what you may think in some branches it is cheaper to start from scratch and put everything new, than to recover the existing.

 

Increasing the value | When can it be interesting to make a reform?

In similar conditions of size, area and orientation, a reformed house has more value than a house to reform. Reforms in Madrid (in spanish: reformas en Madrid)are the order of the day for this reason. This could be a good argument to reform. But we must take into account the moment of the market. In situations of rising prices, the reform is added to the revaluation of the house in its original state. In situations of stagnation, very slow growth or decrease in calculation is complicated.

 

Although the general context is not the most favorable, we must pay attention if it is a booming area, where new businesses are moving. If you are one of the first to intuit and have the capacity to invest, these are good opportunities, although they are increasingly scarce. If not, we must value very well the actions to be taken not to add an investment above the market prices for a reformed apartment.

 

If we propose the revaluation of the property by the reform as a business, we must consider the possibilities of continuity of the wheel. That is, reinvesting the capital gain and minimizing the taxes to be paid.

 

If our perspective is not that of an investor But it is our house, at least for a few years, the possibility of revaluing the house for future sale or rent is a good argument to reform it and update it. Thus, a house can be treated as an investment both in the short and long term. It is possible to enjoy the use of the house in the present with a view to its sale in the future for the return of an investment and to acquire, perhaps, a house of greater value or better adapted to personal conditions.

 

Assumptions to invest in increasing the value of a house:

Strategic investment: the house is used as a mere investment instrument, so it will seek to maximize its return on sale 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 bigger house 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 many intermediate ways and alternatives such as seeking profitability in the luxury rental market or a means to access a home in an area of revaluation, as we noted above.

Revaluation process

What aspects will add the most value to a renovated house?

The ideal would be to sell/buy a newly renovated house, ready to move in. Normally we save, to buy something new, not to reform the existing one to look for a revaluation. The calculation of the differential is always risky, and in the moment of a reform many things can change that make our forecast not completely correct.

 

The ideal is to keep the house in good condition. To do so, it is not necessary that it is new, but that the materials and distributions used are contemporary. A good natural parquet, even if it gets old, maintains an attractive appearance and great durability. If we decide to put a porcelain tile, it is better to maintain an organic chromatic style. Nature as a reference point always ends up working as an insurance against the passage of time.

 

In any case, it is always preferable to contribute little and well, than much and badly. Another way is uniqueness. If our house stands out for some reason, for a very well equipped terrace, 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.

 

Evaluation | Is a reform profitable?

To know if it is profitable, it is convenient to make a market study of the area to see what is offered in the area and in what quantities. After that, it is convenient to value the house in its original state and the budget to calculate if it can be a profitable investment. A penthouse in the center of Madrid is not the same as a townhouse in an area of Spain that has been emptied. No matter how big the house is, Madrid reforms (Reformas Madrid) always have a good exit, but the house is still a risky bet, despite the change that is beginning to feel in that aspect.

 

Currently, a renovated house can increase its market price between 10% and 20%.

 

Approach and execution

Once the decision has been made with the budget, the revaluation and the market price, the strategy can proceed 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.

 

Reform project

Whether you are looking for immediate or long-term profitability, you should study each home in depth along with the rest of the factors. To do this, nothing better than having the help of interior designers, expert architects and specialists in comprehensive reforms.




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