10 Profitable Property Renovation Tips

This week we have a guest blog from my friend and fellow property investor, Dee Heath. Dee runs a company called Property Extreme, who specialist in doing and teaching Renovations.  Over to you Dee…

So, you’ve decided you want to renovate for profit but don’t know where to start?

It’s easy to do a renovation to live in but its not easy to renovate and make money. Here are my 10 tips to ensure you make money on your next renovation project.

1/ Stay In Your Budget: For a cosmetic renovation you should only inject 10 % of the properties value in to the property. For, example, if you buy a house for 300,000 you should stick to a renovation budget of $30,000. The key is to not spend 1 cent over this amount!

2/ Avoid DIY: Sometimes people get caught up in doing the renovation themselves so they can save a few bucks here and there. I did for my first reno! The important thing to realise is that time equals money on a renovation, and although doing it yourself can sound appealing, it often takes way longer to complete the job and you end up paying more in interest repayments. The quicker you get the job done the quick you can get your money.

3/ Get Good Help: Make sure you get quality tradespeople that will help you achieve your goals. Choosing the right tradies can make or break your renovation project. Once you find great ones, do what you can to keep them, this includes paying them on time, looking after them and treating them like gold.

4/ Be Mindful On What You Spend Money On: Choose the right things to spend your money on. You should aim for ever $1 you spend you get an extra $1-$2 in profit on the sales price. For example, if you spend $20K on a renovation, you should aim to get $40-60K extra when it sells.

5/ Planning Is Key: To enable you to get your renovation done quickly, this is key. A big proportion of the success of your project will be based on how well you do this step. Try to ensure everything is planned in your settlement period so as soon as you get the keys you can start the renovation.

6/ Style Your Property For Sale: This is an added expense when selling the property but it definitely gives at least what you pay in added vale. It allows the buyers to see themselves living in the property and they will get emotionally drawn to purchase your property.

7/ Fixtures and Fittings Count: This is one of my pet peeves when renovating. Choose quality fixtures and fitting, never choose cheap ones – it shows! That includes, taps, handles and lighting.

8/ Research – This step will make or break your renovation project. Do not overspend on a property. There needs to be enough of a variation in these prices to make your effort worthwhile. I generally aim for 33-35% difference. Ensure you do your research when purchasing, if you are purchasing a 3-bedroom un-renovated house, compare it to 3-bedroom renovated house. An example, an un-renovated house might be purchased for $400K, the renovated houses in the area need to be selling for around $532K for the renovation to be profitable.

9/ Keep Records: Track every cent you spend, if you are not good with money, you need to learn this skill. Ensuring you do not overspend throughout the project is very important for profitability.

10/ Know Your Target Market: Make your property renovation for the majority, if the majority of buyers interested in your home are family, ensure the reno targets families. This will ensure you get the best possible price.

All of these tips will enable any want-to-be renovator to succeed in doing a renovation for profit. For more hints and tips or your free renovation secrets videos go to Property Extreme.

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