Posts Tagged ‘home renovation’
Effective Renovations for More Profit
Have you seen all the house make-over programmes on TV? Of course you have! In fact there have been so many of these types of shows on television over the past few years that I’d be worried if you hadn’t watched at least one. They’re ok to watch. But who do they cater to? They cater to families renovating their own home. They presume you have an unlimited budget (almost) for the renovation, your own personal designer and they presume also that you have a background crew of 20 people to help you get it finished in one weekend! Well, wouldn’t that be just dandy?
The problem for us as property investors, with the focus of these shows being on home owner renovations is the lack of consideration for the spend vs. value aspect. As property investors, our primary aim when renovating is (or should be) the consideration of what it costs us versus what we can sell/rent/revalue the property for while avoiding over-capitalising.
Something I’ve noticed is that when investors renovate property themselves, they self-design so that they don’t cut into their profit by spending money on a designer. Fair enough if the designer is going to chomp into your profit too much. However getting professional advice (or at the least following the pointers that follow!) will accelerate your chances of making a profit – just as using a real estate agent to sell your property will increase the probable sell price.
So, if you’re looking to renovate property for profit (to either A. pull equity out of, B. sell for a higher price or C. rent for a higher amount), follow these simple steps to get you started. Be sure to read about the design principles in the next issue and combine your new knowledge to start creating your own ‘designer renovations on a shoestring’.
Stay focus. It is not your place that you are renovating and you are not the one who is going to live there. Instead, picture out your prospect clients who would consider buying the house. Do not let those design magazines fool you, just use the image of your customers in mind. Most interior magazines go for the soft changes, those that simply include changing the artwork, some of the furniture, among others, instead of the hard changes, those that only needs to be fixed or improved, which are more practical and reasonable.
Price out all the work before you start. Get written quotes and only give the contractors the go ahead once you have ALL your pricing together. Always include a contingency. You will save yourself big headaches and probably some costly mistakes.
Tell a little white lie to the contractors or project manager about the expected completion date. Keep this to yourself and keep the pressure on as if this date were correct.
Visit the site briefly and frequently to resolve any issues and keep an eye on progress. Be as nice as pie to your contractors as they will be the ones to save you money if they LIKE you!
Pay your contractors on time after they have finished every last detail on your project.