Read Time: 5 minutes
The good thing about TV is that there’s so many renovating programs that we all love to watch. And we all sit there and think, "that really is my dream job" or "I’ve always wanted to do that".
The bad thing about TV is that there’s so many renovating programs that we all love to watch. And we all sit there and think, "that really is my dream job" or "I’ve always wanted to do that".
Catching my drift here??
It look’s so easy on TV, doesn’t it? Let’s then consider the full-time editors sitting in a tiny van outside cutting together the ultimate piece of 30 minute TV. That 30 minutes that makes it look so fun, enjoyable, fascinating and of course…..EASY!
Before you consider renovating a property, consider these tips below to give you a head start.
1. Research (you’ll probably see a common thread across all my blogs here)
Know where you are. By this I mean, if you’re renovating for sale, then know your market. Know who’s going to be buying the property and renovate to their style accordingly. No point renovating to a beach pad style, when the property is in the country 300km’s from the beach. A bit of a stretch I know.
2. Own The Budget
No points for guessing how important this is. Renovating is all about creating equity/value in your property by using as little amount of money as possible and selling for as much as possible. You need to know your budget before buying the property. Because that will determine how much you can afford to pay for the property. Because of course, you know how much you need to sell the property for to make a return. Get in a quantity surveyor if you’re unsure of the build costs on your project - or better still, get your trusty builder to give you a ballpark and add 10% to your budget as a contingency.
3. Know The Final Chapter
Before you buy the property and before you even start looking, you need to know what the end goal is. Are you going to buy, renovate and hold to live in the property? Or are you going to buy, renovate and sell the property? Or are you going to buy, renovate and hold to lease out the property? All of these are factors you need to know before buying the property. Your exit strategy should be top line and centre. Once you agree to it, don’t change it. Changing it means your exit strategy now does not match your entry strategy.
If you’re taking on a big renovation, ensure you have it planned down to the very last detail. You need to know when your trades need to be on-site and how long they’ll be on-site for so you can tell the next trade when they need to be on-site etc. Your timeline may also be dictated by your renovation strategy. You don’t want to be letting things slide - you have a mortgage to pay and the longer it takes, the more it eats into your profits. Excel will be your best friend!
5. Team of Professionals
They are your engine room. The guys that get the job done. How good that job is, well that’s determined by how good your trades are. Get recommendations/referrals from friends or family if you don’t have the contacts. Starting off can be a lottery if you don’t know the right people. Once you find the right team - keep them! They are gold. You need to build trust in your team and they need to trust you. Treat them right, and they’ll treat you right. Don’t shy away from the importance of this. Cheaper is not always better.
6. Add Value
Sounds easier than it actually is. The aim of the game is adding value. This can be achieved in so many different ways. But those ways are different in each market. So going back to point 1, know your market and what they are after. If you have a two bedroom house on a large block of land in an area that is predominately families - then you need to add bedrooms to your property. As a general rule of thumb, property prices in areas are grouped by how many bedrooms they have. The more bedrooms, the more the property is worth (generally). If it’s a cosmetic renovation, look to spend the budget on the kitchen and bathrooms and simple but effective storage solutions.
It’s sometimes the simple things in life, that are often the better. Look to fresh paint, new light fittings, new bathroom fixtures, door and window furnishings. All relatively easy and simple fixes, but can add a dramatic difference to the property and the resale value. Don’t overcapitalise!
And all in all, if this doesn’t sound as easy as it sounds, then drop us a line - we have plenty of experience:)
Milk Chocolate project manages structural and cosmetic renovations on behalf of our clients on properties we recommend. Our property analysis will include a detailed renovation feasibility study. The cost for any renovations to an investment property will also be a tax deduction.
Milk Chocolate purchase residential and commercial property in Australia on behalf of Australians living abroad, looking for a home or investment property. To see how we can help you get in touch here.
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