Hi All,
I am faced with the following decision.Reno now or reno in 3-6 months time. I am not selling after the reno just getting a revalue. My concern is the market. If all other things are equal, do you think that I would get a better revalue now or in 6 months.
I know this is a bit of a crystal ball question, but to me the market is obviously changing and I am thinking if prices are coming down then a better revalue will be more difficult in 6 months than now?????
Opinions?
Thanks,
MarkMark
Depends WHERE your property is.
Ok I agree with that.
But lets just look at it from a general higher-level overall market view. If interest rates are moving up and affordability is peaking (generally speaking), and there are more sellers in the market than buyers then this would indicate the opening of a buyers market.So to refine the question a little to what extent will a valuer look at the current market condition or possible market condition?
To my knowledge a valuer will value an asset at its worth at a particular point in time. But to what extent does the position of the cycle have on the valuer’s decision?
Marky I think you know the answers, I guess that many valuers will be generous in the value when its on the way up, because the value will eventually catch up, if they get it wrong, but on the way down they and the banks tend to exercise caution.
In some markets Adelaide Darwin NZ Perth the market may have a couple of months to go, possibly through to December depending how much the downturn here (Sydney ) becomes public.
But unless you really need the extra I would say the sooner the better,We will always give a current market valuation as at the date of inspection but you can ask for a valuation at todays date with the hypothetical renovations already done. eg. Value the property as if it has already been renovated/extended at the date of inspection, therefore your value will be higher automatically without any works commenced of which you can borrow money off. As for a future value, we could project what the future holds but crystal balls are hard to come by lately (kidding).
I would get a valuation done now based on the above, don’t wait 6 months (the market may be very different although it depends where your property is).
If you are not borrowing money for the renovation, I would still do them now and then revalue. Be careful not to overcapitalise or you may lose money if the market is in a sharp downturn in your area.If you do a reno in 3-6 months time, what are you going to do with the property in the meantime – a short lease? Remember you have to give the tenant 60 days notice to vacate if that is the case. Material and labour costs may go up. It also depends if you can afford to leave it untenanted.
A few ifs, but if you have just purchased the property, maybe do the reno providing you have done your homework and costs. But do it as quickly as possible so that it can be tenanted.
It has probably had a valuation for finance purposes so after the reno get another valuation done and ask for an equity line of credit. That way you don’t pay for the valuation.We have purchased a house and renovated immediately, another we renovated after 12 months, which gave equity and a large increase in rent, another we will do some work with tenants staying as it is a deck, sliding door, opening up a room. Have just sold a unit bought for reno which the bank valued at purchase price but had we been keeping it, we would have had it revalued and used the equity to continue. But just cashing in for now.
Yes, the market is changing, settling down, the media reports that interest rates are not expected to change till after an election. There are always opportunities around for buyers and sellers.
Anna
Just on this comment by 1HotValuer.
eg. Value the property as if it has already been renovated/extended at the date of inspection, therefore your value will be higher automatically without any works commenced of which you can borrow money off
I am not following.
– I understand that I can get a valuer in to provide a figure on what the value would be if my proposed renovations were done, However,– You seem to be saying that I can then borrow against the post renovated value of the house before the house has been renovated.
I am missing something here.
MarkyMark
Hi
I have had a valuation done that accounts for the post renovation value. However, the bank required that I provide written accepted quotes for the work, and they then paid the builder/tradesmen directly in a draw down type situation – I got the valuation, but bank had tight control of the dollars.
This may be one possibility that 1hotvaluer is referring to – I don’t know, there may be others.
Cheers
CDCastleDreamer
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