Bet I have your attention now. Who doesn't like money?
The last few years, and a glut of renovation reality shows such as ‘The Block,’ have sparked an unprecedented interest in renovating for profit. Whilst TV and selective editing may make a profitable renovation seem either exceedingly simple or abysmally dramatic, the truth lies somewhere between. We have compiled some renovation tips to help guide you in a successful and profitable renovation.
With any business it is absolutely essential to consider the target market of your ‘product.’ Thinking of your renovated home as a product, which has to be tailored to the target market will ensure maximum return on investment. Your home is only ever worth as much as someone is willing to pay for it, and these factors can greatly impact on the marketability and subsequent profitability of your property.
Think carefully about the suburb you live in and the profile of likely buyers, considering there needs and wants. Is your property in a growing family neighbourhood? An extra room that dominates the backyard may not be such a good idea. A pseudo retirement village? Reconsider that second storey. Dominated by yuppies and snags? Time to rethink the interior decorating!
Matching your home with the target demographics wants and needs is a necessity in order to maximise the end result. When renovating for profit your marketing knowledge can be as important as your handiwork.
That being said, there are a number of ‘smart’ renovations that can almost always be counted on to add value to your home.
· Bathroom (An ensuite or extra bathroom)
· New Kitchen with increased bench space, and new appliances
· Built in storage, particularly in bedrooms.
· Use of loft space i.e. an extra bedroom
· Larger windows or doors that illuminate rooms
· Off street parking
· Integration of outdoor rooms
But whilst these are all certain to add value, their initial cost may negate any increase in the final sale price. An extra bathroom can become expensive dependent on existing plumbing and access issues. Whilst the maximisation of your final sale price is important, minimising your costs is just as important; both affect your bottom line.
Impeccable research into cost effective, yet stylish and quality building materials is essential, whilst Do-It-Yourself Labour can significantly reduce the costs of your renovation although this is largely dependent on the level of involvement you are capable of undertaking in a spectrum ranging from complete control of the project with DIY labour to the employment of a supervising professional to design, co-ordinate and construct the entire project.
Approximately 50-60% of build cost is labour, so taking on some of the work load yourself can be a big cost-cutter. This is of course dependent on having the necessary skills and qualifications; there are still times where going with the professional may be a more prudent option. These choices will be largely individual, depending on your experience, financial limitations and time constraints.
Renovating for profit is as much about renovating smart. Sensible planning, consideration of potential buyers and well thought out design choices will insure your wallet is full, and your home beautiful. The CompleteHome.com.au Renovate page is full of tips and information to begin your profitable renovation.