The current state of the economy has stopped a lot of people in their tracks. Many are of the view that they will ‘tread water’ for a few years until the economy improves. Others are taking this opportunity to pick up a bargain, often helping a distressed seller in the process and making a profit from their efforts.
Though profits might not be as easily sought than in previous years, they’re still there I can assure you. In addition to buying well (at least 20% under market value), a well thought out, budget conscious renovation is a great way to turn a property into a money earner.
Since capital growth cannot be relied on for at least another few years (5 years according to some property commentators!), now is not the time to necessary buy and hold expecting a passive profit.
You’ll need to be the judge of what a ‘good deal’ consists of in your suburb of choice when hunting out properties to purchase.
Regardless of whether it’s a property you already own or one you’re planning to buy; If your plan is to then renovate the property, you’ll need to make sure it has a good foundation for a profitable reno. What I mean by that is:
- That you have the scope to make significant improvements to the property (the property is not too new/tidy/already renovated)
- That the changes you do need to make to the property will not cost too much (the property is not too damaged/old/in need of lots of repair work)
So it’s all about buying the right property – at the right price. But how do you know the property you’re looking to renovate is a good one or not?
There are a number of criteria to look for (including the area, demand etc?), but as a renovation expert, I’m focussing here on the criteria of the property itself. And as a ‘quick reno/quick flick’ lover (max 2 month reno’s), my advice again may be different to someone who is happy to go to the extent of adding rooms or subdividing a property for example.
One of the key things I look for is the ability to either a) add interest or b) minimise interest (or detail).
Choose properties with a combination of simple, plain, ‘flat’ and uninteresting areas and components AND over-detailed, busy areas or components.
Here are a couple of guidelines to get you started:
Minimal or no landscaping:
If there are minimal plants and landscaping around the property, add simple, low maintenance plants around the base of the house. Also consider simple landscaping up the driveway or along the fence line to ‘soften’.
A plain looking kitchen (with good ‘bones’):
If the existing kitchen is plain, add interest to it with a new bench top and/or splash back. New lighting will give it sparkle. Jazz it up with new handles and fixtures and fittings as your budget permits.
Carpet or vinyl flooring that is the same colour as the walls (or near to):
A darker colour on the floor will ‘stabilise’ the look and feel of a space and linear patterned flooring will add interest. Where walls and floors are too plain and similar, replace or renovate existing flooring to suit.
Unpainted areas – fence, pergola etc:
Especially in a suburb where all other fences are unpainted, add uniqueness to your property by painting yours. This not only creates a point of difference, it will connect the fence to the house and create a larger area of perceived ownership. It also adds depth and interest – but only if you don’t paint your fence the same colour as the house!
A plain bathroom with basic fittings:
You may find that you need to replace a vanity or toilet, but as long as the bones of the bathroom are ok, add interest to it with a coloured splash-back, new tap-ware, and a new shower curtain or screen. Replace the lighting with fittings that emit a warm, flattering light to reflect off the walls
A trained renovation expert or interior designer will show you how to create a property that looks fantastic and is ultimately worth more. Good renovation advice is an investment in your end result and should be considered as important as your real estate agent, valuer, mortgage broker and trades-people.
Feel free to send a ‘Preliminary Enquiry’ via the Hotspace website to discuss the potential of your own forthcoming renovation www.hotspaceconsultants.com