Renovating has long been seen as an easy way to maximise a property’s value and drive additional capital growth. This has been reinforced by multiple TV shows depicting renovations as a kind of “get rich quick” scheme. But trying to renovate for profit is not as easy as you may think.
First, you need to find a property with great potential and an even better purchase price. Then, you need to plan updates that the local market will love and – most importantly – pay a premium for. Finally, you need to make those updates, sticking closely to a modest renovation budget, while still creating a high-end feel.
That said, while this is difficult to do, it is definitely not impossible to renovate for profit. In fact, for those that know what they are doing, there is real money to be made. And here are a few of the simple tricks they use to maximise their returns.
As with any property investment decision, the key to renovating for profit is research. In particular, it is important to understand what people (both buyers and renters) expect from a property in your area. You should also look into which features increase the value of a property like yours the most.
While there are no guarantees when trying to renovate for profit, a few activities will almost always add value. This includes:
Whatever changes you choose to make, the important thing is to have a set budget – and to stick to it. As a general rule, most property experts recommend spending a maximum of 10% of the property’s value on a renovation. However, this amount should be tailored to suit your renovation plans and the increase in value you can reasonably expect.
Just like there are updates that usually add value, there are also some that will usually be wasted cost. This includes:
If you are considering buying an investment property for the purpose of “house flipping”, Search Party Property can help. As property specialists, we understand how to renovate for profit and can guide you through the whole process. We can also work with you to plan changes that will add real value and deliver maximum return on investment.
For more advice on property investing, contact us for a discussion.