With shows like the Block and Renovation rescue getting high ratings on TV, many people dive in to renovate thinking it’s easy money. But be warned, over capitalise initially and you are likely to lose big money quick smart. Read on to find out some key ideas for making renovating a real money maker.
Lose the emotional attachment! No matter how much your heart says yes to a house, you have to step back and ask yourself – will this house make me money? If the answer is no, step away right then it’s not worth it. If the answer is yes, start planning exactly how you will achieve a profit and stick your budget. According to most experts, you should aim to spend no more than 10% of total property cost on the renovation – so for a $500,000 property, budget $50,000 for the entire renovation. You should be looking at profit margin of around 10-15% when it finally comes to selling time.
There are two types of renovation – cosmetic or structural (or a combination of both). If the building is structurally sound and only needs cosmetic updates, start with a fresh coat of paint. Paint is the best low cost renovation tool out there and can really transform with minimal effort. Its quite impressive how a coat of tile paint and some new door hardware can transform a tired bathroom or kitchen. Whilst we are on the subject of bathrooms, consider swapping traditional hinged doors to the bathroom with modern sliding doors for a funky alternative. In the kitchen you can make vast improvements by updating the splashback and door hardware.
A common mistake a lot of first time renovators make is to spend too much money on one room and not enough on others. Be ruthless, and dedicate only a strict limit for each room – sure the kitchen or bathroom will likely cost more but factor that in. Better still, if possible think about combining the kitchen and living areas into one space separated with some bifold doors or sliding doors to really open up the space and make the building feel contemporary. Brio make a huge range of doors with quality stainless steel hardware and fittings and in a range of styles from ultra modern to industrial chic there is something for everyone and most price points.
Natural light can make a huge difference to the overall impression a potential buyer gets from a house or apartment. Consider replacing existing windows with larger ones, adding skylights or large glass exterior folding doors (with or without an insect screen). Natural light is the best decorative addition to any building as it enhances everything, from the paint to the finishes.