Here are a few tips
Whenever you take on a renovation project, the end goal has to be to make a profit. You want to see a return on your investment, and see the rewards from your work. There are a few tips that can help you make money from property renovation.
Look for the worst house in the best area
When you’re looking a property to renovate, the general guideline is to find the worst house in the best area you can afford. The condition of the property is likely to put other people off, and the price should reflect this. The purchase price is absolutely critical as to whether or not you’re going to make any money. If it’s too high, then you will only have a narrow margin for profit.
One of the mistakes that people tend to make is not budgeting properly. It’s incredibly important to spend money on the absolute essentials first, such as the roof, underpinning, stabilization, plumbing and wiring, or rewiring work. You need to be sure that the building is secure, dry and damp free before you can move on to decorating.
Keep control of your budget
If this is your first property refurbishment project, then it can be very easy to get carried away, and go over budget when you begin decorating. Another mistake is to decorate it to your own personal taste. You need to research, see what other developers are doing, find out who has been buying properties in the area, and base your decisions around this information.
A central heating system always adds more value to a property than the cost of installing or updating. Prospective buyers, and mortgage brokers consider it to be an essential feature, and it will improve the energy efficiency of the building. You may be able to use the existing boiler, or it may need to be replaced. You should also think about adding new radiators, heated towel rails, or underfloor heating.
You will also need to seal draughts around the doors and windows, replace windows with double glazing, and add insulation to the loft space.
After the essentials are completed, you should start thinking about the best use of space in the house. This can mean making better use of the existing space. Or it can mean converting other space, for example, turning a loft, garage, or cellar into a living space. You may be able to add an extra floor, or extending our the back, or sides. You may be able to add an outbuilding in the garden, which would create extra space. Depending on the area, it might make sense to create a basement. However, this can be expensive, and would only be a good investment in a high value area such as London.
Decorate and fix any superficial defects
While small defects don’t have a direct impact on the value of the property, they can stop it from selling at the best possible price. Most superficial defects can be fixed by anyone who is reasonably competent at DIY. You may be able to fix things like:
Cracks in the ceilings and plasterwork
Mould on sealants in kitchen and bathrooms
You could hire professionals to take on these jobs, if you don’t have the needed skills, or time, but you will need to factor this into your budget and profit margin.
Every property has a ceiling value, or a maximum value that the property can achieve. You can’t continue adding space as at some point, you’ll be spending money that you have no realistic opportunity to recoup. You would be able to work out what the ceiling value for your property would be by looking at the sale price of other properties in the area. This information is available online on various property websites.