No matter if you are planning to renovate your own home, a long-term investment property or a flip for profit property, the basics of renovating successfully don’t change. The end goal is always to maximise the value and increase the rental returns of the property. If you are a first-timer looking to renovate, here are our top 10 expert tips on how to succeed.
1. Avoid Over-Spending
Over-spending on your property is what is called over-capitalising, and it’s a big blunder in the property world. You need to start by establishing a post-renovation market appraisal on the property. This needs to include the purchase price, any associated costs, interest, marketing and/or selling fees and a comfortable cushion on error. Deduct that from the post-renovation market appraisal. What remains is your budget, inclusive of the profit for the renovation. As a rule – if you got a little lost in all those calculations – your renovation budget should be about 10 percent of the market value of your home.
2. Allow For Variables
A renovation is not always smooth sailing. Once you have your established budget, you are going to want to allow a contingency based both on your level of experience and the extent of the renovation work needed. For structural work allow for more, deduct a little less if it’s purely cosmetic. First time renovating anything, add a little more for error as you find your way. If your budget is too tight and only allows for exact figures, you are going to quickly find yourself in an unfeasible spot.
3. Tailor Your Renovation to the Target Market
You need to become an expert on the homes in the surrounding area, and you can do this by attending inspections of similar properties. By knowing what the market is expecting you can tailor your renovation works to suit. This will save you big by not spending on things that may not bring you a return.
4. First Impressions Really Do Matter
If you are truly wanting to transform a tired old property into something people covet, then you need to focus on the little things as well as the big. So you renovated the bathrooms and the kitchen, but did you forget to bring in some natural light, add a coat of fresh paint, install new floor coverings and window furnishings? Sometimes it’s the little first impressions that can make or break a successful renovation. Here’s our little inside tip, light neutral colours allow people to create their own identity with their belongings and they make the space feel bigger than it is.
5. The Kitchen & Bathrooms Are Your Focus
Quite simply, kitchens and bathrooms sell properties. They are a package deal when it comes time to renovate. If you choose to renovate your kitchen but leave the old bathroom, it’s going to devalue your kitchen and vice versa. If you don’t have a big enough budget to renovate them both, then you might want to consider waiting until you do. Or, you can forgo them for now and focus on the first impressions of the property with smaller refurbishments such as repainting, air-conditioning, flooring, window furnishings, etc.
6. DIY’s are a DON’T
Unless you are a skilled tradesperson, it is a very big misconception to assume that you can save yourself some money buy doing the work yourself. If you’ve watched a few renovation TV shows, and are thinking “how hard could it be?” We’re here to tell you, much harder than you think. In most DIY cases it will, in fact, cost you roughly the same or more, but it is guaranteed to take longer with poorer finishes. You are going to be hurting when you see what your unnecessary holding costs have cost you. Even skilled tradespeople know they can’t do everything themselves and even they hire help.
7. Don’t Get Too Attached
If you are renovating an investment property or a flip for profit property, no room should feature your favourite new design or trend. If you love that shade of forest green, save it for your own home. The purpose of these types of renovations is always about maximising rental return and the capital value of that property.
8. Get Some Experts You Trust
Renovations are all about coordination, which means you need to be discussing your plans and schedule and seeking the tradespeople’s assistance and advice. This is why it’s essential to hire skilled and trustworthy tradespeople. An experienced tradesman will be able to advise you on mistakes they foresee, advise on budget-friendly alternatives, give you a clear indication of time-frame for certain works and overall help you avoid falling into mistakes many have made before you. If you have friends in the industry or know anyone that has renovated, ask them for advice! No knowledge is bad knowledge. But some advice can be, so make sure you’re still doing what feels right and listening to the right people.
9. On Thrifty is Perfect, Cheap is Disastrous
It’s easy to go cheap with so many places selling low-cost products (especially online). But, from experience, we can tell you cheap is cheap for a reason. And, if you’re planning on holding on to that property for a while, it’s going to cost you more in the long run. Longevity is not part of the description when looking at cheap buys, but if you consider the middle ground on certain products you can find some great buys that aren’t going to break the bank but also won’t break themselves.
10. Be Tough on Yourself
If renovations were easy, every property owner would be doing them. You need to be tough on yourself and be honest about what you are capable of doing. Do you have the spare time to manage the project? If ‘no’, you need to hire a professional to manage it for you. If you are honest about what you can and cannot do and what you can and cannot afford, you’ll be on your way towards a good renovation.