While the adage “location, location, location” is still considered the ideal gauge for your property’s resale value, there are other factors that can still play a part in helping you get the best price when you part ways with your home. One of the things to consider is the upgrades or renovations that you may have made to the property. While making improvements to a home can be a good thing, there are some additions that can make or break your property’s resale value. The following are some home upgrades that will dampen your property’s resale value. Poor renovation It’s one thing to make renovations to your home – and another thing when those upgrades requires further improvements! “Nobody likes to buy a home with something that requires big money to modify or repair,” says property investor Kamarul Ariff. He gives an example of a property he had purchased that had a “badly-renovated roof.” “The roof obviously had some bad leaks in the past but the renovations were very poorly done by the former owner. Unfortunately, when people go to inspect property, not many check to see if the roofing is in good condition. After all, most homebuyers or investors check out a property when the weather is clear anyway.” Kamarul recalls that after buying the property, it rained heavily - indoors! “There were leaks everywhere! When I finally got an expert to check the roof, I discovered that there were badly done patches made to some holes on the roof, which only worsen the leaks. “In my opinion, it’s better to spend a bit more money and get a good job done than to stinge and get poor workmanship. In the long run, nobody benefits. “It’ll affect your resale value and the buyer who’s looking for his dream home ends up buying into a financial nightmare.” P. Lalitha, a home-buyer, shares a similar sentiment. “The apartment I bought had poor floor renovations in the bathroom. Of course, it was my neighbour who lived below that alerted me of this.” Upon inspection by an expert, she discovered that the cement used by a previous owner for the flooring was of poor quality. “Renovations were not just done, they were badly done. So much so that it cost me a fortune to fix them. My advice for future home-buyers? Check every inch of your house. To home sellers, if you want to get the best resale value for your home, get your renovations done by an expert,” Lalitha says. Permanent upgrades Some homeowners make upgrades to their property for personal gratification without taking into account the fact that they may need to sell it in the future. However, these renovations hardly do anything when it comes to resale value, nor do they make it easy to sell. “Among them are fixtures such as swimming pools and wall modifications,” says KL Interior Design executive designer Robert Lee. “Having a swimming pool can increase the price of a home, but it also comes with extra responsibilities that not everyone wants. If you’re a senior citizen and not the active sort, you’d probably need to hire someone to clean and maintain the pool you’d probably never use.” He also points out that major works done to a property’s structure, such as to its walls, can be hard to undo. “There was this large family living in two adjacent terrace houses and they made a huge arch in the wall between the two houses. When it came to selling, they had a huge problem! “They also wanted to sell off the house as soon as possible and refused to patch-up the wall.” Other structural changes, like turning a three-bedroom apartment or house into a two rooms can also put a damper on resale value, says Lee. “If you’re selling a two-bedroom apartment and your neighbour is selling a three-bedded one at the same price, which property do you think a buyer will you go for?” Home-Deco Art Sdn Bhd director Rachel Tam says having a distinct paint job won’t affect a home’s potential resale value. “Some people paint their homes in all kinds of colours, like a kindergarten,” she chuckles. “But it won’t affect a property’s resale value. It’s not permanent and can be easily replaced. Besides, the first thing most homebuyers do is give it a new coat of paint anyway. Unexpected outcome Some upgrades can be so extreme that they no longer look like what they were initially set out to be. “We knew of someone who bought a single-storey house for RM250,000 and spent about RM200,000 to build a second level. When he sold it, he only got RM300,000,” says Lee. “Some renovations that place a property beyond its original architecture will not increase its resale value,” he adds. Tam notes that some people turn their homes into an office or place to conduct business, which may or may not affect the property’s resale value. “It depends on how extensive the renovations are. If you’re just converting one room into an office, then it’s fine, as the future owner won’t need to do much or anything at all to convert it back into an ordinary room. “However, if you’re going to start raring animals or live stock there, which may include additional structures to contain them, then this could be a put-off for potential homebuyers who are looking for a basic place to live.”

REPORTS released in the last two to three weeks on the state of the property sector in Malaysia and other countries in this region should offer some comfort to both builders and investors.

The Malaysian Property Market Report 2011 that is issued by the Valuation and Property Services Department of the Finance Ministry has painted a fairly positive picture.

According to the report, the Malaysian property market saw its highest growth in the last five years. For instance, the number of transactions in 2011 was up 14% and the value of transactions in the same year rose 28% compared with the previous year.

Perhaps it is for this reason that sentiment remain upbeat not only among property investors in Malaysia but in other countries in this region as well, such as Indonesia, Singapore and Hong Kong.

Also released just recently is the Asia Property Market Sentiment Report 2012 by iProperty.com, a network of property websites covering Malaysia, Indonesia, Singapore and Hong Kong.

According to this report, 59.5% of those surveyed think that the Malaysian property market is still doing well, and 62.3% of them have expressed a desire to acquire new property within the next six to 12 months. That, certainly, is a show of confidence in the property market in Malaysia, and sweet music to developers' ears.

More numbers: of those surveyed, 28% have said that they were looking to buy for investment.

But then again, some may ask, is it all that great? Are those numbers for real? Even if they are, are we drawing the right conclusions, the perennial pessimist will ask.

Given the scenario, we have reason to feel positive about the Malaysian property market.

Not reported here or anywhere, but widely acknowledge and perhaps even fairly extensively practised is the purchasing of properties for the future generations.

Parents monitor the prices of houses for the benefit of their children. Many who can afford it are already buying new homes for their children, out of fear that prices could rise to a level beyond their children's means if they wait for the children to grow up, find a job and start looking for a home on their own.

This practice now begs the question: if the children of this generation can't afford to buy their own homes, how then are their own children going to fare? But that is another issue.

Looking at it from an investor's point of view, there is still a lot of upside in the property market, particularly in Malaysia.

The property market in Malaysia is still quite under-priced when compared with those in Indonesia, Hong Kong or our nearest neighbour Singapore.

There are many family ties between Malaysia and Singapore and our cousins across the Causeway have more than occasionally envied us our property prices.

The fact that Singaporeans make up a large proportion of foreign property purchasers in Malaysia, particularly in Johor, is a case in point.

Property developers are also increasingly eyeing markets outside Malaysia with many carrying out promotional efforts to attract buyers from China, Indonesia and of course Singapore.

So long as property remains cheaper in Malaysia than in those countries, we will continue to be an attractive investment destination.

Even moves by the authorities to keep prices in check, such as one proposal to raise the floor price of property foreigners are allowed to buy, may not have the desired effect of preventing prices from rising.

A recent report says that the government may decide to put in place new requirements for foreigners planning to invest in the property market in Malaysia by restricting them to properties valued at RM1mil and above. Currently, they are allowed to purchase any property valued at RM500,000 and above.

This is not likely to have much impact as most property purchases by foreigners are in the RM1mil and above category anyway.

In a buoyant market, this requirement may even encourage developers to raise prices to a level above RM1mil just to widen their target market to include foreigners. That would be one more way to keep prices going up.

On the whole, the economy is performing fairly well. Unemployment rate is about 3% while the inflation rate was at 2.2% in February. The Bursa Malaysia index hit a new high this month.

Foreign direct investment has also risen by 12.3% to RM32.9bil in 2011 compared with the previous year.

These are reasons to feel upbeat. If one needs an indicator on how good sentiments are, just count the number of new property launches since the beginning of this year.

The three hotspots of Klang Valley, Penang and Johor Baru continue to command top prices as demand continues to focus on these three areas.

Overall growth for the residential sector, according to the Malaysian Property Market Report, was 19%, with Selangor recording the highest for home transactions at 28%.

Yes, there is reason to be optimistic. The challenge now is to ensure that we continue to enjoy sustained growth, but prices remain affordable for the vast majority of Malaysians.

Most of all, we do not want the bubble to burst. - The Star

Teh Lip Kim is the MD of SDB Properties Sdn Bhd, a lifestyle property company. Bouquets and brickbats are welcomed. Send by email to md@sdb.com.my.