It’s a common mistake to just try to make a property look good when renovating for a profit or to sell – and this is of course very important. However, it’s more important to produce a ‘product’ (your property) that buyers want to buy to buy from a practical perspective too.
You need to pull not only their emotional strings – but also their practical strings.
There are two main things you should be thinking about:
- Who is your target market? What do they want or need? Does your property already provide those things? If not, can you change your property in some way to provide those things?
It’s easy to say ‘anyone’ is my target market, but if you can put a finer point on this then you can tailor your renovation more directly to them.For instance, if your target market are single mothers, then you might splash out a little extra on a security alarm or dead bolts or security screens. If you’re sure your target market are families with small children (because there are loads of day care centres and schools close by) then you probably want to make sure there’s a bath somewhere and a closed off back yard.
If you don’t already have all or some of these things then it would be a good idea to investigate spending some of your budget on adding them.
- What is the expectation in your area? That is, when people are looking at buying in your area – what do most of the other houses offer? Is there a common theme? Does your property offer those things?For instance, if every other house in your price range in the suburb has air-conditioning, built in wardrobes and a modern kitchen, then yours probably should too.
Or if only 20% of the other properties in the area have a dishwasher, then you could probably do without too if necessary (unless you were replacing the kitchen cabinetry anyway – in which case you would usually spend the extra).
Talk to real estate agents about who your target market might be (there may be several groups that will apply) and make a list of what practical needs they might have (and what corresponding features that means they’ll need).
Check listings of houses already on the market for what other houses in your suburb (in your price range) offer or visit open homes before you begin your renovation.
Make a list of the ‘must-haves’, ‘nice to haves’ and ‘no-need-to-haves’ so you start getting clear on the things you should be spending your money on. What are the priorities for your probable buyer?
The next thing to do is to work out what those things are going to cost to do, in addition to the cosmetic improvements such as painting, flooring, window dressings etc.
Once you’ve added the likely renovation costs up, compare the total bill combined with the current value of your property, to the probable sale price for your property if you did choose to do those things.
E.g. cost of renovation + current value of your property VS sale price of renovated property
If the figures are quite different and you think it is worth spending the time and money on a reno then go for it. You may even think that it’s worth spending $10,000 or $15,000 on a ‘trick-up’ to bring your property up to par with others on the market at the same time.
Regardless of how much you decide to spend, the exact details of how you renovate your property are where you will make your money.
So if you need firm guidance on what you should do to your property – item-by-item, area-by-area, then a Renovation Action Plan is what you need.