How To Start Renovating For Profit
While the practice is often done by homeowners looking to improve their living conditions, renovating for profit is a whole different ball game entirely.
On any given day in Australia, you can bet that there’s a large portion of the population renovating. While the practice of making improvements to a home isn’t exactly a new phenomenon, renovating has soared in recent years as a reflection of the red hot property market and being stuck at home with little else to do.
While some of us are more handy with a power tool than others, there is also a growing number of people who have started renovating for profit. Sometimes, you have to spend money to make money, and investing in your home is one way to help future proof what is arguably the average person’s most important asset.
What To Consider When Renovating For Profit
Regardless of whether you’re looking to sell your home in the not so distant future, or simply have the time, energy and funds to commit to such a project, renovating for profit is all about spending as little as possible in the hopes of making as much as you can on the final sale price.
In contrast, flipping houses is a type of real estate investment strategy in which an investor purchases a property not to rent or live in, but with the sole intention of selling it for a profit. Some investors prefer to play the waiting game in the hopes of capitalising on property market increases, while others take the bull by the horns and purchase a ‘fixer upperer’.
Either way, the most important part of the process is to avoid overcapitalisation, or spending more on a home renovation than you could ever hope to make back on the profits of a sale. Experts advise that renovators should allow 10% of your property value for your renovation budgets – so if your home is valued at $700,000, your renovation budget should be $70,000. As such, before you start renovating for profit, consider the following tactics.
Crunch The Numbers – Did you know that the average renovation budget blows out by 80%, and the average slippage on timeline is a whopping twenty month? To minimise your exposure to unexpected surprises, do the planning and make an in depth budget from day one, and track it as you go. Above all, be sure to stick to the plan to avoid spending more than you intended to.
Invest In Key Areas – Kitchens and bathrooms are always big hits in terms of determining what and where you choose to invest in when looking to renovate for profit. As a general rule, aim to spend 2% of the current property value on a new kitchen, and 1.5% for the bathroom, and avoid investing in risky additions such as walk-in wardrobes, wine cellars and high end materials.
Keep The Layout – One sure-fire way to burn through cash during a renovation is spending all of your money on trades. To help reduce this, try and keep any existing room layouts in the property as they originally were, and aim to avoid playing around with costly endeavors such as moving the plumbing or electricity connections.
Consider Budget Flooring – When renovating for profit, it’s wise to invest in strategies that involve minimal expenditure that have the potential to yield maximum results – and one of those areas is flooring. Instead of shelling out on top tier products, consider using a replicant option such as engineered timber flooring or, better still, Hybrid flooring that resembles the real thing for a fraction of the cost.
Fancy Fixtures – Rather than ripping out existing structures or thinking too big, renovating for profit is all about making the most of what you’ve already got. If you can’t afford to shell out for a whole new bathroom or kitchen, give these spaces a refresh by adding new tapware, vanities, and benchtops, as these investments have the potential to yield similar results when done well.
Don’t Underestimate Paint – Although renovators shouldn’t view cosmetic changes as pathways to serious profit, it’s important not to underestimate how powerful a new coat of paint can be. While this applies to both indoor and outdoor environments, do your research on timeless colour palettes to capture the imagination of potential buyers.
One of the primary appeals linked to undertaking a home renovation is the boost you’re able to give to your property’s overall value. Whether or not you intend on selling in the near or distant future isn’t really relevant, as a home renovation ultimately means more money in your back pocket when the day does eventually arrive, and you’re the one who benefits from an improved living space in the meantime.
Wherever you are on your renovation journey, giving your home a facelift is never easy, particularly if you’re not sure where to start. If you’re on the hunt for flooring solutions that best fit your style, budget and the needs of your household, the good news is that a visit to your local Tile Wizards outlet can provide all the answers and more.
Chat Flooring Materials With The Professionals
While your options for renovating on a budget are almost limitless, selecting the right type of flooring for your home renovation certainly isn’t an easy feat. With each space comes a different preference or priority: are you chasing style, functionality, or simply want the most bang for your buck?
In operation for over 26 years, at Tile Wizards we pride ourselves on getting you more, for less. We pioneered the warehouse format, and our stores are purposefully designed to make your selection easier, and ultimately offer our customers quality, price and the right advice.
Even if you are just after some honest and friendly advice – please don’t hesitate to get in touch with us at Tile Wizards today for a free quote. We pride ourselves on being able to work with you in order to bring your dream flooring solution to life.
