Renovating for Profit

Renovating isn’t always about doing a lot, but it is very much about doing the right thing. It’s easy enough to paint some bedrooms, sand the floorboards to renovate. But knowing exactly what you need to do to improve a space and increase a property’s overall value requires expert knowledge.

As with all aspects of property buying and investing, renovations require careful planning and execution. Investors must bear in mind that the purpose of a renovation is to improve the property’s value and not to get carried away and over capitalise on your home.

This is how M.J.Harris can help, with our wealth of knowledge and experience through the renovations we’ve done on many Melbourne homes, we can advise you on what is worth doing, but also, what really won’t give you a return on your investment.

Renovating a property can give you capital growth, even in a flat market. Undertaking careful upgrades will prevent maintenance for years to come, giving you a worry free investment.

A good renovation can be as simple as new paint and new carpet, or it can be as complex as a complete refurbishment.

There is no set rule on how much you should spend on a renovation, but it’s always a good idea to engage an independent and impartial property valuer before commencing.

Many people make renovation plans, believing that a $30,000 kitchen renovation will add $50,000 to the property’s value. A good valuer will know that homes in the street won’t sell above a certain value, even with a new kitchen.  Sometimes it’s better to spend less on simple improvements such as new cupboard doors, benchtops and flooring, which could add $20,000 to $30,000 to the equity, which could double or triple the investment.

Are you looking to, renovate and sell, or renovate and live in the property? If you’re selling it’s imperative that there is an immediate and almost guaranteed profit in the deal. If you’re looking to hold, you need to buy the right property that will continue to grow strongly forever. The renovation profit in a hold strategy is more about icing on the cake, maximising your rental return and ensuring you have minimal maintenance to do in the future.

Consider adding a contingency for unforeseen expenses that could crop up once you start stripping back the surface. It’s all about being prepared for the worst to make sure you’re in a secure financial position, if the renovation takes a turn for the worse.

For help with any renovation get in touch with M.J.Harris. To see how we can help you, select any of the links below for a complete portfolio of services we offer.