What We Can Learn From The Block
I think a lot of things can go wrong with home renovation projects if you have “buy, renovate and sell” on mind. A lot many times, we overcapitalise on renovations and from that point on it is a downward spiral unless we meet a very generous buyer who still hands us out a decent profit. When you have renovation in mind, aim to buy the property at a reasonable price. Not many who bought at a high sticker and went through an elaborate renovation found themselves laughing all the way to the bank when it was time to sell the property.
Wrong location, wrong price
Another mistake people commit- and it is a mindset crime- is that they fail to think of renovation as one part of a big consolidated effort. They mistake it as the only thing! The one big answer to high profit margins! Doesn’t happen that way! If you buy your property in a wrong location and at wrong prices, no amount of renovation will rescue you.
This is exactly what the hit television reality show The Block has taught us. It is one thing to lap up a profit on a reality show even if you scratch the wrong end of Bondi (poor location) and build following your personal whim and quite another to do it in the real property world.
Building and pest inspection
My recommendation- and it is a pretty straightforward, time-tested one- to the property renovators is to be very practical about the budget and the sale price you are aiming for. Besides, it is important not to ignore aspects like building and pest inspection in order to determine how much you may have to spend in renovations.
Check demographics and gentrification details
Check your market demographics and how the neighbourhood has gentrified over the course of the last decade. It will give you an insight into various structural and cosmetic renovations that would suit prospective buyers and tenants. And please, not at any rate, make it a personal thing. To reiterate, you are not going to live in the property.
How have you fared with your “renovation for profit” projects in the past?
