If you're looking to renovate your HDB flat with a view of ensuring that it fetches a higher price when comes time to sell, you need to know that renovations don't necessarily mean a premium price on the resale market.
In fact, for all the money you're putting into your renovations, it might mean just the opposite. Here's what you should be considering when planning to redo your flat.
1. Valuation
"As for the flat's official valuation itself, a renovation itself does not have significant impact on this," says Ricky, a property agent we spoke with.
Take note that the valuation is different from the perceived value (dependent on your potential buyers and what they are willing to pay), as it is based on factors like the flat's facing, view, distances and previous transactions.So sometimes, even a beautifully renovated flat might be officially valued at less than a flat in original condition.
Click on thumbnail to view. Story continues after photos. Photos: ST, BT, TNP
2. COV gone
Previously, a nice renovation job could possibly command a higher COV (Cash-Over-Valuation: the extra amount to be paid for the flat on top of the official valuation), but as of March this year, the COV system has been abolished. This means that sellers and buyers now have to agree on a price before the latter gets a valuation of the flat done. Needless to say, this could go either way.
Ricky explains that potential buyers looking at your flat will probably have a different idea on what to do with the space, as well as different requirements. As such, the important thing they look out for is the bigger picture: the overall space and structure of the flat, compared to individual components like built-in storage.
The important thing as well is to keep it in tip-top condition, as properly maintained electrical wiring and plumbing are big plusses.
Click on thumbnail to view. Story continues after photos. Wong Wei Liang
4. Too personalised
Deviating from the standard, basic HDB model means that the flat will no longer accommodate the majority, for example, if you have removed the walls of one bedroom.
Certain ideas may seem good - but only to you, as potential buyers may see it as a cost in having to reinstate, alter or even completely remove them.So if you're buying to eventually sell, keep to functional and practical renovations, or fuss-free decorating.
Click on thumbnail to view. Story continues after photos. Darren Chang
This article first appeared on Home & Decor Blog.
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