When it comes to renovating for resale, there are some key points to keep in mind if you want to make money, according to the team at Renovate and Profit
The first is to look for a profitable deal. As every area has potential renovation opportunities, they suggest limiting yourself to three suburbs.
“Remember, the aim is to turn the project around in the shortest time possible – so the old mantra of location, location, location goes out the window, as you will be manufacturing your own capital growth.”
They also suggest renovators get to know what potential buyers in their area are looking for. Young professionals, for instance, will be more impressed with floating floors, double-sized showers and modern fittings, whereas families will be looking for fully-enclosed backyards, full bathrooms with tubs and non-slip tiles.
Renovators would also benefit from prioritizing the changes that would add the most value to the property – for instance, adding an extra bedroom, updating the bathroom, or focusing on the property’s exterior.
They also advise renovators to be very specific about costing.
“The more detailed your information on things you want to add, remove, fix and modify, the more accurate your quotes and costing will be. We use our Renovation Costing Template to capture this level of detail, which gets right down to the cost of the last power point. It comes to serve as a ‘shopping list’ for quotes and often is also a negotiation tool to support purchasing offers.”
Completing a thorough profitability analysis is also an important when it comes to making the right property purchase offer. When crunching the numbers, renovators should include all resale information and project costs in their analysis, as well as realistic time frames and project costs. This will help you compare different potential projects, as well as different variations of the same deal (including projections of the worst case scenario).
Developing a clear, sequential plan of the renovation based on your cost projections and priority list will help you control the renovation project.
And lastly, when it comes to selling the property and making a profit, select the best agent and auctioneer in your area by looking at who is selling the most in the higher price brackets. As well, Renovate and Profit suggests staging the property with display furniture for higher yields.
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