3 Strategies to Stop the Reno Budget Blowout
Are you looking to renovate your home or investment property? Here are three major things to consider to ensure you don't blow out your renovation budget.
1. Decide on a budget
Firstly, why is having a budget so important? The whole purpose of doing a flip is to make a profit and therefore you have to stay within your budget to achieve this. You can't work out whether your decision to renovate will be a good investment without understanding the costs involved and what the changes could potentially bring in terms of value. You need to add together the purchase price, plus the cost of the renovation, plus fees, to be able to work out your total investment. Based on comparable sales in the area, you can then work out what your profit would be and if it’s a worthwhile investment.
2. Choose tradesmen wisely
One thing that goes without saying when looking for cost-effective renovating is shopping around. For every project, you should seek out a minimum of two or three quotes. It is time-consuming, but you need to be sure you aren't getting ripped off. Alternatively, you want to be checking that all quotes include the same items, a quote may seem cheaper, however are they good value or have they just forgotten to add something? It is up to you to cross-check to make sure everyone’s quoting apples for apples and no one’s missed anything.
Always ask for referrals too. Online reviews might tell a good story but have you spoken to someone that has used them before? The five star reviews might just have a good marketing team behind them - chat to your friends and family and their friends, someone must know someone in the industry who can help you out or put you in touch with a good referral.
3. Splurge on the aesthetics
It may sound superficial, but it can be worth paying a bit more for what people will notice first when renovating the property. Bathroom tiles, stone bench tops and good European appliances are worth their weight in gold. It’s something people will pay money for and notice. They won’t necessarily notice what kind of plaster you’ve used on the wall, but they’ll definitely notice the brand of appliances. They’ll also notice if you’ve used ceramic tile or marble.
But, in saying that, it’s important to know your buyer. For an investment property to eventually rent, you wouldn’t put marble in. If it’s an investment to sell and you’re in the higher-end market, the buyer will be expecting those kinds of products. So get in touch with your local agent to help you understand whom you should be marketing your renovation for.
Would you like to know whether your renovation ideas will be a good investment or need some tradie referrals? Send me a message HERE, and I will send through some more information.
The above information has been sourced from Realestate.com.au. To read the full article CLICK HERE.