Many home owners renovate with a view to selling soon after.
But there are a few key things you should bear in mind to ensure you get the most bang from your renovation bucks.
1. The golden rule when renovating real estate: don't overcapitalise
If there’s one golden rule of renovating, it’s this. Redoing your kitchen or transforming your old deck into an entertainment space can certainly improve your property’s quality of living, but it won’t necessarily add value.
The money used to install a designer kitchen in a two-bedroom suburban home, for example, may be better spent on redoing the flooring or patching up superficial damage to improve its overall desirability.
When renovating real estate, overcapitalising essentially means the renovation expenses don’t equate with how much value those changes add to the home. So be aware of what looks good and what will actually increase the property’s value.
2. Set your renovation budget before you begin
It’s often hard to predict what your total renovation costs will be from the outset, but it’s even harder to manage costs when you’re in the middle of a project.
The first step is to be realistic. Get detailed costs and quotes for your renovation plans rather than just estimating. There are plenty of free renovation calculators online that can get you started.
You’ll then want to define three projects costs:
- What you want it to cost (as inexpensive as possible).
- What it will likely cost (your anticipated final expenses).
- What it could potentially cost (a worst-case scenario budget).
Having these on hand will keep you financially on track and also help during the challenging times, such as when projects are delayed or there’s a sudden price surge on materials.
3. Create a complete renovation plan
A great way to start the renovation process is to ask yourself a question: what outcome do I want? Not only how you want your property to look once all the renovations are complete, but also who you want it to appeal to.
Creating a ‘target market’ of potential buyers and then researching what that particular audience wants in a home can narrow down your renovation goals. Do you want to appeal to families in a suburban neighbourhood? Are you targeting high-income earners for your upmarket property? Or are you looking to grab the attention of investors?
Once you understand the ‘who’, you’ll be able to create a renovation plan that covers the ‘what’ and ‘how’.
4. Ask your local agent about renovations that add value
Struggling for ideas about renovations that will add value to your property? It’s easy enough to jump online and see what renovations ideas are currently in vogue, but you can also speak to the experts: your local real estate agents.
We have the experience and local knowledge to explain which areas of your property are most likely to add value once renovated. It’s a free, handy source of knowledge - so why not leverage it?
Looking for advice about renovating to sell?
Speak to one of our property experts today for helpful tips on making your real estate renovations stand out.
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