Studies show that more people are looking for homes that suit their lifestyle. However, they may not have the time, skill, or inclination to fix up the property on their own. This is where smart investors can make massive profits. Renovations can greatly increase the value of a property, and an eagle-eyed investor can pick up a property for a song, put in a bit of cash for renovations, and sell it off at a huge profit.
In this article, we look at 10 tips to adopt that would greatly increase the value of a home after renovation:
- Do your research: Take a moment to suppress the excitement of the possibility of making a killing in a renovated property and research the improvements that are more likely to add value to the home. When doing your research, you need to take the following factors into consideration: the neighbourhood prevalent taste, the style of the house, and the current market. This information will help you decide the type of renovation you need to carry out and the part of the property you should pay more attention to. No matter how fancy they are, changes that don’t fit won’t fly, and rather than increase the value of the property, they may actually make it drop.
- It’s not about you: Everyone has an idea of what their dream home should look like. But if you are renovating for profit, adding your idea of ‘character’ can be counterproductive. What is attractive to you can actually be a turn-off for someone else. Therefore, ensure that your plans for renovations actually add value to the home. You need to think about what the buyer will want, not what you want. Are you renovating for young couples or a small family? In order to make massive profits from your renovation, you have to end up with a product people will want to buy.
- Budget: if you were renovating for yourself, then it would have been okay to splurge a bit, but if the plan is to make a massive profit, then you may need to be cautious with your expenditure. It is a good idea to engage a professional who will value the property and help you come up with a good budget. Aim to sell off the property at double what you spent on the whole project, with a little bit of buffer to give room for negotiations.
- Get your finances together: You have your estimate; now is the time to check your savings account. No matter how cautious a budget is, market conditions can change suddenly, and this can cause a spike in prices. If you feel that what you have saved up will not see the project through, you can easily raise more money by applying for a bridging loan. A bridging loan offers you a way of quickly raising money in the short term to finish your project. Once you sell the home, you can pay off your debt. However, it is important that you have enough money to see you through the project. It just wouldn’t do to get stuck halfway because of insufficient funds.
- Make it simple: Sometimes, simplicity can be the best way. There are lots of DIY home improvements that could be of great help to your renovations. You don’t need a large firm to handle the renovations; a fresh coat of paint, new door knobs, new bathroom fixtures, and replacements here and there can still improve the value of your property. Unless you absolutely need to, your aim is to make the house the second or third best on the street and nothing more.
- Create a network of agents: You need the right people to come see your renovated home in order to get a bid. Connecting with agents in your neighbourhood will expedite the process. Estate agents always seem to have a ready list of people looking to buy houses, and your prospective customer can be on that list. Let them know what your plans are, so they can get you the right buyer as you are finishing up.
- Invest in a competent team: No matter how all-around you are, there are just some things you cannot do alone, such as renovating a house. You will need plumbers, electricians, painters, cleaners, and so on. Look for a competent local team that can give you a good job at the right price. Preferably, look for a small to midsize outfit that won’t cost you much so that you can still maintain your goal of making good profits.
- Make use of spaces: If the property has extra space, this can be converted into an extra room or a bathroom. And if the space cannot be used inside the house, you can create an extension for the house, such as a car garage, a children’s playroom, or a storage shed. The more features you are able to coax out of the property, the higher the price you can ask for it.
- Lighting makes perfect: Alternatively, rather than convert empty space into spare rooms, you can actually knock down walls to free up space in the sitting room or dining area. This will allow light to enter these areas, creating a warm, welcoming atmosphere that will significantly increase the appeal of the house.
- Not so visible renovations: If you have enough funds, you may consider bringing the house up to spec, such as installing a home security system, insulation, and a heat and cooling system. Even though these renovations are not as obvious as a fresh coat of paint or a new roof, they have been known to significantly add to the value of a property. The new owners will not need to do all of this, and you can confidently ask above the market price for these privileges.