When it comes to property value, people naturally assume it means the market price for selling, but it’s actually a little more involved than that. Yes, estate agents and surveyors can give an estimated value based on what comparable properties have sold for nearby, but there are lots of other variables to consider, such as market demand and interest rates.
Regardless, increasing property value starts with understanding the audience. Who exactly needs to perceive the value? Buyers, investors, surveyors, lenders, or tenants? In this article, we’ll explore strategies for understanding the audience for your property and discuss four potential ways to increase its value so that you can make decisions that will be beneficial to your specific circumstances. Let’s get stuck in!
Property value: Understanding the needs and preferences of your audience
To truly increase the value of your property, first you have to identify who your audience is. Buyers, investors, surveyors, lenders, and tenants all have different needs and preferences; understanding each is key to adding real value to your property. Let’s begin by taking a quick look at what drives each group with regards to how they perceive property value:
Buyers
- Focus: Buyers are typically concerned with finding a comfortable and appealing living space to live in.
- Priorities: Factors like the property’s layout, the number of bedrooms and bathrooms, kitchen functionality, and overall aesthetics are crucial.
- Value perception: Buyers often place a high value on features that align with their lifestyle, such as a well-maintained garden, a modern kitchen, or proximity to schools and amenities.
Investors
- Focus: Investors primarily view the property as a financial asset with the goal of generating returns.
- Priorities: Factors like rental yield, potential for capital appreciation, and the overall return on investment are critical considerations.
- Value perception: Investors prioritise properties with the potential for positive cash flow, strong market demand for rentals, and appreciation over time. They are likely to assess the property’s profitability to see whether it aligns with their investment strategy.
Surveyors
- Focus: Surveyors primarily assess the structural and overall condition of the property.
- Priorities: Factors like structural integrity, potential maintenance issues, and adherence to building regulations are top priorities.
- Value perception: Surveyors focus on the long-term value by ensuring the property is in good condition to minimise the risk of future problems and meet safety standards.
Lenders
- Focus: Lenders view the property as an investment and consider the risk associated with providing a mortgage.
- Priorities: Factors such as the property’s market value, potential for appreciation, and overall financial viability are key. Lenders want to ensure that the property can be sold quickly and at a price high enough to cover the loan if the borrower defaults.
- Value perception: Lenders seek properties with a stable market value and good potential for appreciation to reduce their risk of financial loss.
Tenants
- Focus: Tenants look for a comfortable and practical living space that fits their lifestyle and budget.
- Priorities: Factors like affordability and location, and amenities like parking are key considerations. Tenants are becoming increasingly conscious of energy efficiency.
- Value perception: Tenants typically place more emphasis on short-term benefits, such as the property’s convenience and functionality, rather than its long-term value appreciation.
Other things to consider: Tenant and buyer demographics
Understanding the demographics of potential buyers and tenants is a big part of making value-boosting improvements. Features like a family-friendly garden or a spacious kitchen/dining area can significantly enhance the perceived value for specific demographics.
Here are some typical tenant and buyer demographics to consider:
- Students: Properties near to universities and colleges with multiple bedrooms, bathrooms, and communal spaces to accommodate shared living arrangements.
- Young professionals: Properties in urban areas or in close proximity to work or public transport links with modern amenities such as on-site gyms or co-working spaces.
- Families: Larger properties in close proximity to schools and parks with multiple bedrooms, spacious kitchen/dining areas, and a well-maintained garden.
- Retirees: Single-story or accessible properties in peaceful, retirement-friendly communities in close proximity to healthcare facilities and local amenities.
- Short-term rentals: Properties with unique features in tourist-friendly locations or urban centres and in close proximity to local attractions.
Tailoring your property to meet the needs and preferences of these demographics can set your property apart.
4 Ways to Increase Your Property’s Value
1. Strategic property refurbishment
Strategic refurbishments can be a game-changer when it comes to increasing your property’s value, but it’s essential to align the refurbishments with local market demand and the preferences of the relevant audience groups and target demographics discussed above.
Whether you’re addressing repairs or making cosmetic changes, the goal is to enhance the property’s sale price or maintain its value. However, while all improvements contribute, they don’t all yield the same value, so do your research before getting started.
Strategic property refurbishments to consider:
Fitting a new kitchen: A modern, well-equipped kitchen is often a focal point for buyers and tenants, making it a worthwhile investment to boost property value. Focus on quality materials, functional layouts and stylish design elements that appeal to the preferences of the target demographic.
Fitting a new bathroom: Upgrading bathrooms with modern fixtures and contemporary finishes, can significantly increase property value. Pay attention to cleanliness, functionality, and storage options to maximise the usability and appeal of the bathroom space.
Building an extension or converting an underused space: Adding extra living space via an extension or by converting underused areas like garages, lofts or cellars can substantially increase property value. Carefully consider the potential return on investment and obtain necessary permits and approvals before embarking on any construction projects.
Improving the garden and outdoor spaces: Enhancing outdoor areas with landscaping, patio or deck installations and garden features can significantly enhance the property value. Focus on creating functional outdoor living spaces that are low-maintenance and suitable for various activities.
Creating open-plan living spaces: Opening up interior spaces to create flowing, open-plan layouts can make a property feel more spacious, modern and versatile, which can boost its appeal and value. Consult with a professional to determine the feasibility of removing walls or reconfiguring floor plans to achieve a more open and flexible living environment.
It’s important to consider both cosmetic improvements and structural/functional upgrades to address the priorities of all audience groups.
2. Energy efficiency
Energy efficiency is influencing property values more now than it ever has before. Properties with high energy efficiency ratings are attracting environmentally conscious buyers and tenants, as well as those worried about rising energy costs. But it’s not just buyers and tenants who are interested in your property’s energy efficiency rating. Investors, lenders and surveyors are also attributing more value to energy efficient homes. Here’s why:
For lenders: Lenders assess the risks associated with providing a mortgage and the reduced operating costs of energy-efficient homes, including lower utility bills, help mitigate the risk of financial strain on homeowners. This contributes to making the property a more secure investment. Long-term value is also a concern for lenders, and energy-efficient properties tend to maintain their value over time and attract responsible and financially stable homeowners.
For surveyors: Surveyors focus on the overall condition of a property, and energy-efficient features indicate that a property has been well-maintained. The features also contribute to the property’s longevity by reducing strain on heating and cooling systems and reducing the likelihood of damp and mould damage. In addition to this, regulations emphasising energy efficiency standards are considered by surveyors to ensure legal compliance and meet the expectations of buyers, lenders, and regulatory bodies.
For buyers and tenants: Energy-efficient homes offer potential long-term savings on monthly expenses, making them appealing to buyers and tenants. These features also contribute to a more comfortable living environment, providing consistent temperatures throughout the seasons. Many modern buyers and tenants also prioritise environmental sustainability; energy-efficient homes align with their values and allow them to live more responsibly, reducing their carbon footprint.
For investors: As sustainability becomes a key consideration for buyers and tenants, energy-efficient properties are in high demand, which ensures a consistent flow of potential tenants or buyers for investors. Lower operational costs for rental properties, with reduced maintenance and fewer issues with heating and cooling contribute to increased profitability.
Homeowners who invest in energy efficiency are not just making their property more appealing; they’re also aligning with the changing expectations of the market. Making your property more energy efficient is a viable way to increase its value.
3. HMO conversion
When thinking of ways to increase your property’s value, consider converting it into a House in Multiple Occupation (HMO). However, bear in mind that while HMO conversions can add value to your property in some cases, they are more likely to boost your monthly cash flow by accommodating multiple tenants and maximising rental income rather than increase the property’s direct market value.
It’s important to note that this strategy is specific to certain investment goals and may not be universally applicable. We recommend that you assess the local market demand for HMO properties in your area before embarking on such a conversion.
4. Cleaning and decorating
While cleaning and decorating are unlikely to increase the value of your property in the eyes of investors, lenders and surveyors, they can play a crucial role in making it more attractive to buyers and tenants. You can catch their eye with thoughtful colour choices, well-arranged furniture and attention to detail and, in doing so, get more views or higher bids due to increased demand. A well-presented property has the potential to leave a lasting and positive impression, making it more attractive in the competitive real estate landscape.
Property management is what we do
At Purseglove, we recognise that increasing a property’s value goes beyond market comparisons. By understanding your audience, making strategic refurbishments, prioritising energy efficiency, and tailoring improvements to buyer demographics, you can elevate your property’s perceived worth.
Partner with us to maximise the performance of your property! Unlike traditional estate agents who view property management as secondary to sales, it’s actually our number one priority. Choose Purseglove today and turn your property into a thriving long-term investment!