Blog Post

EIG Property Auctions: Maximising Your Property Investment

Publish Date: 09 September 2024

By Jade Shrubsole

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Further reading

What is property auction finance?

Understanding Legal Packs

EIG Property Auctions: Maximising Your Property Investment

In last months blog post we showcased auction properties from all over the UK that had some fantastic uplifts from simply clearing and cleaning a property to fully completed renovations. 

Whether you are looking to making a profit or you want to find a home, it’s important to remember that a property is an investment. How you enhance and nurture that investment is entirely up to you. If your goal is to increase your property's value, it's crucial to conduct thorough research before diving into any renovations, whether large or small, to ensure a profitable return when selling. On our website you can search the history along a street and gauge the potential investment by checking the nearby property values and previous auction sales.

At EIG Property Auctions we are here to help you understand how to increase your property's value. With our extensive knowledge of auction trends, market insights, and detailed research into the costs and benefits of popular renovation projects, we’ve created a comprehensive guide. This guide covers everything you need to know about adding value to a house and includes the essential tools to assess the worth of any renovation project, even if it's not specifically covered here.

Increasing Property Value

To effectively increase the value of your property, whether you currently own it or are evaluating a potential purchase, it’s best to focus on projects that provide significant improvements. Adding value differs from simply increasing interest; while minor enhancements can boost curb appeal and attract more buyers, substantial renovations, such as modernising features and adding extensions, will significantly elevate the property’s price.

If your primary aim for home improvements is to sell at a profit, prioritise projects that add more value than they cost. Here’s a straightforward calculation to help ensure you achieve the best return on your investment:

Step 1: Estimated new value = Initial house price + (value increase in percent)
Step 2: Potential profit = Estimated new value – (Initial house price + cost of renovation)

Example Calculation:

• Current average UK property value: £285,000
• Average cost of a new kitchen: £17,500
• Average increase in value: 6%

Step 1: £302,100 = (£285,000 + 6%)
Step 2: -£400 = £302,100 – (£285,000 + £17,500)

If the cost of the renovation exceeds the increase in value, the investment might not be worthwhile. In such cases, you might be better off avoiding the renovation or reallocating your budget to more profitable improvements.

Renovations That Add Value

Numerous renovations can boost a property’s value, varying in time, cost, and space requirements. Even with a limited budget and a tight timeline, there are opportunities to enhance value.

Here’s a rundown of popular home improvements that increase value, along with their typical costs and potential returns:

1. New Kitchen:

• Cost: £10,000 - £25,000 (average £17,500)
• Value Increase: 5-6% (£17,100 for a £285,000 house)
• Potential Profit: -£400

2. Extra Bedroom:

• Cost: £41,500
• Value Increase: 14% (£39,900 for a £285,000 house)
• Potential Profit: -£1,600

3. Extra Bedroom with En-suite:

• Cost: £48,000
• Value Increase: 19% (£54,150 for a £285,000 house)
• Potential Profit: £6,150

4. Conservatory:

• Cost: £10,250
• Value Increase: 5% (£14,250 for a £285,000 house)
• Potential Profit: £4,000

5. New Bathroom:

• Cost: £5,000
• Value Increase: 4% (£11,400 for a £285,000 house)
• Potential Profit: £6,400

6. New Windows:

• Cost: £4,250
• Value Increase: 3% (£8,550 for a £285,000 house)
• Potential Profit: £4,300

7. New Garage:

• Cost: £28,000
• Value Increase: 10% (£28,500 for a £285,000 house)
• Potential Profit: £500

8. Loft Conversion:

• Cost: £50,000
• Value Increase: 25% (£71,250 for a £285,000 house)
• Potential Profit: £21,350

Finding Renovation Properties at Auction

For developers seeking their next renovation project, property auctions are the ideal place to find potential properties. At EIG Property Auctions, we list properties ready for transformation from auctioneers all over the UK with over 3,000 lots added each month. Visit our website to begin your search and secure a property with great potential.