When it comes to renovating a property, the main goal is to make a profit. If you’re renovating to make a profit, you need to buy a property that is sitting low in the market, conduct your renovations and then rent or sell the home with a profit. Investment in the property world nowadays means you have a great way to have cash flow coming in that can grow in value over time.
The best thing about renovating a home is the fact that you can design it however you want to. You don’t need to be waiting around for capital growth to happen. If you have the opportunity to make the process faster, then that is the way to do it. You are aiming for profit, so you need to be aware that there is more to getting a profit than just painting walls and planting some new houseplants. When it comes to investing in property, you need knowledge of the market, so you make the right decisions and understand the budget for renovations without running the risk of over-capitalising.
Make sure that you inspect the property to check for structural issues that the owners may not tell you about. If you don’t have the knowledge of this type of thing, then consider enlisting a building inspector. Building inspectors have the eye to look for different problems and concerns that you might not even see. Ensure the electrical and the plumbing is well looked over as re-wiring the home can be thousands of dollars. If the home has imperfect interiors and it is outdated, you can carry out modern renovations to increase its value. If you are thinking of using property management services, consider these costs when budgeting.
You need to make sure you are not spending money on unnecessary fees and interest on the money you borrow for the home or the money that you have for renovations. In this case, there is no real point buying and renovating for a profit. You can refinance your current home, get a construction loan and even obtain finance through credit cards. You need to make sure that you research each lending company and check their interest rates against others. Ensure you can make repayments on time and allow for stamp duty, the deposit and the cost of the repairs along with the repayments. You don’t want to be getting into financial trouble. Property investment strategies outline you should not spend any more than 10% of the property value on the overall renovation.
Things that you can do that will add profit but won’t see you spending too much:
Doorknobs: If the cupboards are in good working order then consider just replacing the doorknobs to give the cupboards a new look.
Painting: Painting doesn’t cost much, and it can make a room feel fresh and clean. The painting will add value to the home, and you can even get creative with feature walls.
Lighting: Replace outdated light fittings with something more modern like dimmers or even contemporary lighting to themed rooms.
You don’t need to break the bank when you are renovating; you need to know what is trendy and how to add modern appeal to the home.
Check similar properties on the market to get inspiration for renovations or go offline and create something out of this world. It is all about balance when renovating your investment property. There is a fine line as to whether you make a profit or loss when investing in property. Enlist the help of industry professionals if you have any queries or concerns as to whether a property could be profitable or not.