By Erin Reilly
What we could do if we won the lottery, right? We’d pay off our family’s debts. We’d donate money to worthy causes. We’d invest it and live off the interest … Erm, if we’re being totally honest, we’d probably just blow it all on new houses, cars and a trip to Disneyland for all our friends.
We all wish we were rich. And we all wish that getting rich was as easy as it is to spend money. Let’s agree for as long as it takes to read this article, then, that renovating houses and selling them on is an easy way to load your bank balance with lots of zeros. Keen to get rich by renovating? Here are some handy tips.
Buy Well in the First Place
If you’re buying property with the sole intention of flicking it on for a profit, it needs to be in pretty good nick in the first place. The home should be structurally sound but have plenty of potential to bring it into the 21st century. Do your due diligence by signing up for as many pre-inspection checks that are available before signing on the dotted line. Remember, if you wouldn’t live there, other people might not want to either.
Focus on Key Areas
Time is of the essence when it comes to renovating to sell. Don’t commit to redoing the entire property; focus on key areas that are important to prospective buyers and will look good in marketing photos.
Redoing the kitchen and bathroom, (see Basic Kitchen Renovation Cost and Basic Bathroom Renovation Cost) giving the interior paintwork a spruce up and replacing the carpet (see Re-carpeting Cost Estimate) is a great start. Paint is the ultimate fixer-upper-er and it’s pretty cheap, plus you can do it yourself if you want to save some cash.
Auckland Refresh Renovations franchisee Corey Rambhai says a few easy exterior pick-me-ups could add plenty of value too.
“A new front door is reasonably low-cost but can make a real impact,” he says. “The same goes for water blasting. If the exterior paint job of the property is looking a bit tired or the driveway and pathways are covered in decades’ worth of grime, giving them a water blast could be enough to freshen up the entire property.”
Beware, though: if you buy a place that came straight out of the 70s and only renovate the bathroom, this could accentuate just how much work the rest of the house needs which might put off prospective buyers.
Don’t Shop for Yourself
If you buy a place with the intention of selling it straight away, Rambhai recommends that property owners ignore their own tastes.
“You’re not shopping for yourself so don’t get carried away with stuff you’d like to have in your own home,” he says. “Stick to low-spec fittings and neutral colours that let the next owner personalise the place to suit their style. Not everyone will appreciate that lime green lounge wall as much as you do.”
Professional Reno or DIY?
The best profits often come from doing as much of the work yourself and knowing lots of tradies who are happy to give you mates’ rates. But not everyone is blessed in the area of DIY which makes project managing a renovation tricky.
Before you even think about lifting a finger on your reno, make sure you have the best team in place. The overall success of your project will depend on how well you prepare in the first place, the people you’ve got doing the work and planning for those inevitable budget overruns.
Sorry to break it to you, but if you buy a property for $450,000 in an area where the average sale price sits at around $600,000, you’re not going to sell your freshly-renovated property for $1,200,000. Be realistic about how much money you’re going to make before you get too far into your project by researching recent sales in the area. Avoid overcapitalising by establishing a strict budget and sticking to it.
Agree That It’s Actually Not Easy
If you go into a renovation project thinking that it’s going to be an easy ride, you’ve got another thing coming, sonny. Renovating can be stressful at the best of times, and there are plenty of factors that could impact how much money you’re going to make like market fluctuations and budget overruns.
But, if you do it well, renovating to sell can be a good way to increase your wealth. Have a solid plan, stick to your budget and be prepared to put in the hard yards. You’re not going to become a millionaire after one reno, but after a handful? Maybe.
You might be interested in reading How to plan a home renovation
Want to know more? Get in touch with the renovation experts at Refresh now to find out what they can do for you and your home. Refresh Renovations Specialists offer a free initial one-hour consultation that will help you make the decision whether their team is the one for you. This consultation is no obligation and is a chance to understand what they can do for you.