We’ve all heard of stories about renovations blowing out and becoming quite costly, so how do you avoid falling into a trap and overspend. Unfortunately, there’s no hole proof way to safeguard yourself from not losing money when renovating to sell, mainly because a market place could turn on a dime and whether you took all the right steps, you may still come of second best.
But let’s assume the market remains steady throughout the duration of your renovation, what are the steps you need to take so you don’t go and spend all your profits. The first thing you need to do is research. It would be best to have a real estate agent come over and give you some tips about what to do, might even be worth getting two or three to pick up any tips you can. By doing this you can minimise on buyer objection, as the agent will help you design the perfect sale property.
You also want to pick their brain about who would be buying your place, your target market. The reason you want to know this is because most overspends in renovations are on fittings, simply put, if you’re in a market that don’t necessarily want or even know the top end brands and want a basic property as a roof over their heads, then don’t go and spend thirty thousand dollars on appliances that aren’t appreciated. On the other hand, if your market place is highly sophisticated and expects the best of the best, then this could be the best investment you could make.
Have a professional set a budget and stick with it. Explain to them that you are going to need certain fittings as the buyers will be expecting it, but after that, where can I save? A good project manager will have tradies at hand as well as suppliers. They will be able to set a budget down to the very last dollar and send you to certain places to choose your fittings where they will receive discounts, or they simply have good product at the right price. Once you go off to buy all your fittings and fixtures, make sure you stay within your budget and don’t blow it out by a dollar, because you liked this toilet better or that sink. This is where most people eat at their profits and even create a loss for themselves.
The riskiest job is building a second level. Adding a level is always expensive and in so many cases, will blow your budget before you even start. A good single level property is appreciated by a lot more people, from elderly to young families, anything with stairs could be taken off the list immediately. So, by going up you cut out a large bulk of buyers that could create the extra competition needed to get the price you want.
If you keep things simple and stay focused on the business side of things, you’ll find that you will not emotionally spend, you’ll stick with budgets and you’ll create a product that is specifically made for the broad range of buyers. If you accomplish these aspects through your renovation, you will increase your chance of competition to win you property and secure yourself a record breaking price.
The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice you should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.