Becoming a renovator that makes a profit then moves on to the next enticing project takes more than DIY ability. It’s easy to be seduced by well edited and scripted renovation shows, highlighting the mostly smooth transitions from purchase to profit. It begins with finding the right property. How do you avoid pitfalls? What can you do to source a suitable property as a renovator?
Here are the 5 P’s!
Position: What is the position of the house on the block?
- What is the position to the street, entry & access to the property, fenced yard, storage?
- Can you see the kids in the backyard?
- Does the property get any sun? Is there a lot of natural light or not?
- Is the position close to shops, main roads, transport options, schools?
Keep position in mind as it matters to many buyers and renters alike. If your property is poorly positioned or does not have proximity to services or places that attract buyers, it may not be the renovation deal for you.
What can you improve? Look for something with the potential to add value, create a point of difference. What can be uplifted and improved through renovation?
- Change the flooring? Paint the walls or exterior? Paint a feature wall?
- Can you add an island bench or reconfigure the kitchen layout?
- Can you convert the property from a 3 bedroom to a 4 bedroom home?
- Improve the layout? Could you create a study room or nook?
The power of potential lights every renovator up! Get the balance right between what you have to work with and what you can realistically improve that makes profit, not takes profit away.
Know your numbers! The biggest indicator of profit starts with price and is the basis from which a decision to buy or not can be made.
- Is it expensive or is it affordable?
- Have you compared sales history that is like for like?
- Do the owners expect a lot?
- Are you one of many buyers competing for the property?
- What will you spend on your renovation?
Is buying the property financially viable for you? These questions will give you more clarity and keep you emotionally even and in control from the outset.
Learn to spot issues quickly. The faster a problem is identified and dealt with, the better your chance of maintaining your profit margin.
- What repairs or changes will increase your renovation spend?
- Are products budget savvy and appealing to the demographic?
- Are tradies paid on time? Be up to date and keep tradies on side.
- If there are delays what else can you do to stay on schedule?
Inevitably, problems arise. Products are late arriving or could be wrong altogether. What if structural issues come up? Always have a Plan B (Behavioural flexibility) and communicate it clearly to key people such as your JV partners and your tradespeople alike.
What is the layout like? Will it add to the liveability and overall enjoyment of the property?
- Be aware. It can be hard and expensive to change a bad property layout.
- Make sure it flows for you and the next buyer. Can it flow better?
- Demographics are vital, see what is popular and ask a real estate agent too.
- For families that show interest, does the layout work with their lifestyle?
When you think about the layout, it goes further than where you can place furniture! More buyers than ever before are wanting to do more within their homes. By considering the layout and planning with your demographic in mind, you will create more buyer interest.
These are just a few of the things you might need to consider before deciding to pursue or pass on a property purchase.
This blog was written by Alanna C
Alanna is our Community Manager here at RARE and makes everyone feel welcome within our community, she is our go to girl for all administration and organizes our events & workshops + contributes to our social media. Alanna also runs her own Renovation Consultancy Business specializing in material & colour selections & property styling.