Renovating for profit is a tricky thing these days. It's not as simple as slapping on a new, fresh, coat of paint. It's about adding simple value and functionality for your buyers.
Here are six renovation tips to set you up for success.
Take the emotion out of the equation and learn what improvements are most likely to add value for your style of home, your suburb, in the current market.
When renovating for profit, simple is best.
Changes that don’t fit won’t fly, no matter fancy they are, and your renovating for profit dreams could become a nightmare.
2. It’s all about the buyer
If you’re looking to renovate for profit, adding ‘character’ can be a touchy subject. “There’s always a risk that your ‘character’ could turn potential buyers off with a risky style.
The starting point is to think about your buyer. Consider their needs in a home and tailor your work to suit them. Are they a young family or are they empty-nesters?
Renovating for profit can mean leaving your own tastes at the door.
The key when renovating for profit is to keep the renovation accessible to the buyer.
If you’re undertaking an extension, avoid ‘edgy’ and run with popular, proven finishes that are in vogue.
Lots of natural light, warm white walls and sociable open spaces, create a blank canvas and always sell a home.
3. Watch the bee's & honey
This could be the most important point to note. Blowing out your renovation budget can breed cash-flow issues and unhappy suppliers, not to mention kill morale and raise blood pressure.
A professional valuer can help you estimate costs and craft a disciplined budget. Aim to double what you spend as your end game, and always add a buffer for those unpredictable hiccups.
Make sure you are undertaking feasibility and costs estimates, while weighing up market trends. As being conscientious about your spending, this is where the money is made.
It is also a good idea to have a chat with an accountant sooner rather than later, about capital gains tax and repairs vs improvements. The timing of your work and the period for which you hold your property makes a big difference to your taxable bottom line.
4. KISS - Keep it Simple Silly
There are plenty of small, low-cost improvements that could make a huge difference to your property’s value. Fresh paint, new light fittings, new bathroom fixtures, and door handles can all help a place command more for rent or sale.
Avoid overcapitalising all costs, don’t renovate your house to be the best on the street, instead aim for second- or third-best.
5. Agents are your Allies
Sometimes agents will chat to a network of prospective buyers before they list properties. Connect with agents in the areas you’re looking to renovate for profit, and share your goals so they can hit you up with a winner before the competition.
6. Develop a Great Team
Cleaners, painters, electricians, plumbers, roofers… Relying on professionals is usually essential to transform a property safely and soundly. Invest in a competent team you trust and have rapport with. Grievances and misunderstandings will cost you time and money.
When you want to renovate for profit it pays to have a good team around you.
7. Give it some Extra Room
Aussies have the biggest houses in the world and love having room to move! Enlarging or adding rooms is a popular way to create atmosphere and appeal. If you’ve already got larger areas, consider creating multiple rooms within these, especially if it increases the number of bathrooms or bedrooms in the home.
Credit to original owner