Renovating for profit isn’t about simply painting a wall and watching the returns roll in. It’s about carefully adding real value over the long haul.
We spoke to renovating expert and founder of The Makeover Group, Richard Armstrong, for his renovating for profit tips.
1. Get studying
Take the emotion out of the equation and learn what improvements are most likely to add value for your style of home, your suburb, in the current market.
When renovating for profit, simple is best. Picture: The Makeover Group
Changes that don’t fit won’t fly, no matter fancy they are, and your renovating for profit dreams could become a nightmare.
2. It’s not about you
If you’re looking to renovate for profit, adding ‘character’ can be a touchy subject, according to Richard. “There’s always a risk that your ‘character’ will be someone else’s turn-off. So, with this in mind, how do your ensure your improvements will add value?”
3. How to renovate for profit: Budget like a hawk
This could be the most important point to note. Blowing out your renovation budget can breed cash-flow issues and unhappy suppliers, not to mention kill morale and raise blood pressure.
A professional valuer can help you estimate costs and craft a disciplined budget. Aim to double what you spend as your end game, and always add a buffer for those unpredictable hiccups.
Richard suggests undertaking feasibility and costs estimates while weighing up market trends: “This is where you make your money.”
He also suggests chatting with an accountant sooner rather than later about capital gains tax and repairs vs improvements: “The timing of your work and the period for which you hold your property makes a big difference to your taxable bottom line.”
4. Simple can work wonders
There are plenty of small, low-cost improvements that could make a huge difference to your property’s value. Fresh paint, new light fittings, new bathroom fixtures, and door handles can all help a place command more for rent or sale.
Richard says to avoid overcapitalising don’t renovate your house to be the best on the street, instead aim for second- or third-best.
5. Agents are your friend
Sometimes agents will chat to a network of prospective buyers before they list properties. Connect with agents in the areas you’re looking to renovate for profit, and share your goals so they can hit you up with a winner before the competition.
6. Build a team of workers
Cleaners, painters, electricians, plumbers, roofers… Relying on professionals is usually essential to transform a property safely and soundly. Invest in a competent team you trust and have rapport with. Grievances and misunderstandings will cost you time and money.
Richard adds, “If you’re looking to add period detail to an older home’s facade, consider engaging a design expert who can advise on authentic finishes that stay true to the period.”
7. Add space
Aussies have the biggest houses in the world and love having room to move! Enlarging or adding rooms is a popular way to create atmosphere and appeal. If you’ve already got larger areas, consider creating multiple rooms within these, especially if it increases the number of bathrooms or bedrooms in the home.