11 factors that can lower your property’s value
From a poor renovation job to being located in a bushfire zone, there are plenty of factors that can detract from the value of your property.
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Whether you’re selling a home or investment property, you’ll want to maximise the value and achieve the highest possible sale price. While there’s plenty you can do as a homeowner to increase the value of your home, there are also several external elements which could be driving down your property price.
General state of disrepair
This might seem like an obvious issue that can drive your house price down, but it’s one that’s still worth pointing out. If you’ve ever attended an open-house inspection at a property that’s a shambles, you’ll know that some home owners fail to grasp the importance of keeping a property neat and tidy when trying to sell.
Overgrown lawns and gardens, doors that don’t close properly, mould on the walls and cracked or broken windows can all influence a prospective buyer’s opinion of your property. Not only will it make your home seem undesirable, buyers will also be counting the cost of any repairs they will have to make if they decide to make an offer, and lowering their bid accordingly.
Taking care of all maintenance jobs, applying a fresh coat of paint or replacing old fittings or fixtures can make a big difference to the appearance of your property, and hence to the price.
Bad kerb appeal
The first impression that your property makes on potential buyers is crucial to the price you’ll achieve. If your house needs a fresh coat of paint, if the trees need pruning or if the side fence is falling down, the asking price drops immediately.
Some factors you think add kerb appeal can actually detract from a potential buyer’s perception of your property. For example, you might love garden gnomes and have them dotted in every square inch of your front garden, but buyers may have a different view.
With this in mind, it’s important that your home is in a reasonable state before you put it on the market. Ensure that the garden is well-manicured, that the fence is painted and that the letter box is modern and clean.
Forgetting to de-personalise
When a potential buyer is inspecting your house, they’re walking through each room trying to picture themselves living there. If it’s hard for them to do that, they may be less likely to put in an offer. No-one wants to be constantly reminded about a house’s past owners, so features like a brightly-coloured kids’ room (including the child’s name and choice of artwork) can actually detract from value.
Poor kitchen and bathroom aesthetics
While every room of the house is important to potential buyers, the kitchen and bathroom are two areas that will receive particulalry close attention. The kitchen is one of the most-used rooms of the house, and potential buyers will want to be able to quickly and easily prepare meals there every day. At the same time, they’ll want the bathroom to be a place where they can unwind and relax after a long day.
So if your kitchen is impractical with limited food preparation space, and if your bathroom has mosaic tiles and a poor layout, this can have a big impact on the overall appeal of your home. Take time to fix those issues.
A DIY renovation can be a great way to save money and achieve the perfect look for your home – but only if you know what you’re doing. A patchy paint job, uneven tiles or joins that don’t line up will stand out to potential buyers.
It’s important to ensure that your renovation fits in with the rest of your home and the surrounding area. For example, if buyers are attracted to a particular area because of the heritage architecture of many homes, they probably won’t be thrilled by your ultra-modern man cave extension out the back.
If you’re renovating, extending or improving your home, make sure you get all the necessary approvals from council before commencing any work. When a building inspection reveals that one of your bedrooms is not legal height, or that the pergola in your backyard breaches council regulations and will need to be demolished, the value of your property will suffer.
Sight isn’t the only sense people use when inspecting a house; smell can also play a big part in how much a buyer thinks your property is worth. So if your carpet has several years worth of unpleasant pet odours living in the carpet, get the carpet professionally cleaned before opening your doors for an inspection.
If there are a high number of similar properties listed on the market at the same time, this may harm the perceived value of your property.
If there are only a limited number of buyers and they’ve got a long list of similar properties to choose from, you’ll have to compete with several comparable properties that may have better draw cards than yours, and this may translate to a lower sales price.
Property prices in your suburb and your street can influence how much you’ll be able to sell your property for. If the area is a highly desirable area to live or invest in, that's good news for your sale price. Being close to public amenities and businesses such as restaurants, schools, shopping centres and public transport can have a positive effect.
On the flipside, there are plenty of neighbourhood factors that can devalue your property. For instance, if there’s a high level of people defaulting on their mortgages in your area, this will detract from the amount buyers are willing to offer. Similarly, if you’re located on a congested road, are under a busy flight path or if your property is located near a sewage treatment plant, this will drive prices down.
Living within close proximity to undesirable amenities such as a cemetery, a brothel or a hostel may discourage some buyers.
Rowdy tenants living next door may also play a part in dragging your property prices down. They never mow their lawn, they have car wrecks sitting in their front yard, they throw raging parties every other night and it’s not uncommon for them to receive visits from the police. Many prospective buyers will take one look at these undesirable neighbours and run a mile.
Alternatively, maybe you and your neighbour are locked in an ongoing dispute about property boundaries, overhanging trees or some other neighbourhood matter. New buyers will once again be reluctant to inherit your problems, and this will only serve to push prices down.
Schools with a bad reputation
Do the schools in your local area have a bad reputation? Would parents be reluctant to send their kids to your local primary or high school? If so, your home is going to be less desirable to young families. On the flipside, if you’re in a good school catchment area for one or more particularly desirable schools, you can ask for a little more when you put your house on the market.
Flood or bushfire risk
Is your house located in a flood zone or in an area prone to devastating bushfires? If so, this will impact the price many people would be willing to pay to live there. Studying flood maps before you buy is always a good idea, while it’s also essential to make sure your home meets any requirements for buildings in bushfire areas.
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