Thanks to reality tv shows such as The Block and House Rules, it’s now a popular goal for many Australians to buy a “renovator’s dream” and transforming it into a stunning home.
But while the concept of renovating and flipping a home is simple enough, when it comes to real estate, actually doing it is another story.
Crunch the numbers
While falling in love with a rundown, but potential-filled property is all part of the process, the number one consideration should always be the B-word – budget.
Ask yourself, do you have enough money to complete the renovation? Because if you don’t and find yourself selling a half renovated house, you may find that all your profits have gone down the drain. While at the same time dealing with a property that isn’t selling as fast as you had hoped.
Most mortgage providers require a property to be in a livable standard before they lend against it. So, think about exactly how much renovation is required and more importantly, how much it will cost.
Get building & pest inspections
Always, always, always get building and pest inspections done. These reports let you know if there are underlying issues that will need to be addressed.
And generally speaking, these underlying issues tend to be the ones that will break the bank. Re-stumping, re-wiring, roof repairs, plumbing leaks, mould, the list goes on.
Read the report carefully and act. If too many issues are present, you may have to consider walking away.
Now, while a building and pest will cost you a small sum. it’s best to know this upfront before you hand over your hard-earned saving on a money pit that you later regret buying.
Know what to look for
Know what to look for when inspecting a property.
For example, a wonky floor could point to anything from the property needing to be re-stumped foundation issues. Paint peeling or bubbling could mean moisture and the potential for rising damp.
Each potential issue has different causes and costs associated to fix them.
Understand the target market
For buyers looking to sell after renovating, understanding who you will be selling the property to down the track is absolutely vital.
Are you looking at a family with young children that would consider having no tub a deal-breaker? Can you get away with a Euro laundry or do you need a dedicated laundry with external access?
Do you need to install high-end appliance brands or can you get away with appliances from the lower end of the market? Do you need to install stone benchtops or will laminate do the job? And with everyone working from home at the moment, should you consider creating a study space or stealing space from another room to create a study room, and would with equal a better price?
These are the types of questions buyers need to think about to ensure the work they do makes them money and ultimately appeals to those who will look to buy it.