Looking to buy a renovator’s dream but at the same time don’t want to spend too much money on a fixer upper? Reality TV shows can show the upside of renovating to sell but for many people, buying a home that requires some attention can be a money pit. Based on Nu-Look’s experience, we will unpack our top 5 tips when buying a home to renovate.
Sayings like “Location, location, location” and “Buy the worst house on the best street” really stand true when it comes to buying to renovate. Particularly if you are planning on re-selling for profit in the near future, it pays off to do your market research into the suburb. Factors like population demographics, migration trends, median price trends, traffic and local culture all play a role in determining which areas to buy a renovate-to-sell property. This consideration should be prioritised over all else, otherwise you are just renovating a house that is above a location’s value and standards, leaving you disappointed and short-changed when the time comes to resell.
2. LOOK BEYOND FIRST IMPRESSIONS
Outdated interiors can be off-putting for many buyers but if you can get over first impressions, you might find yourself landing a bargain come auction time. Before you commence renovations, it’s always important to understand who your target market is when re-selling such as families, young professional couples or empty-nesters. That way, when you do decide to sell at the completion of the project, you can be confident that your property appeals to the market you had in mind. If in doubt, warm white walls and sociable open spaces appeal to many buyers and always sell a home.
It’s easy to get caught up creating a shopping list of your “must-haves” when renovating a home however you should never commence a renovation exercise without having a clear budget in place. Many dream house renovations quickly turned into nightmares, when a renovating company underquotes and doesn’t provide a fixed-price contract. To avoid getting caught out, it’s important to consult with a renovation consultant and work out a budget estimate so you have a good idea of what it’s going to cost to renovate before commencing the project. It also helps to chat to an accountant or financial planner about the best timing for renovations and when you decide to sell as this can make a big difference to your taxable bottom line and affect the net profit of a renovation project.
4. AVOID STRUCTURAL WORK
When possible, try to avoid purchasing a property that requires structural repairs as this generally burns money fast and doesn’t always raise the overall value of the house to offset the costs. A house to look out for will have ‘good bones’ and requires minimal intervention in fixing up bathrooms and kitchens so you can put your money into making cosmetic renovations that have a high return on investment. Those things that people see, like countertops, cabinetry, flooring and lighting are what transforms a room and cost a lot less than what they return in market value.
5. THINK HOW TO ADD VALUE
Even if the plan is not to renovate to sell straight away, you should be looking for ways to improve the long-term resale value. Those additions that pay off financially over time like a second bathroom or an additional bedroom are great ways to improve underutilised space. Always ensure that you don’t impose your personal style too much as nothing turns off potential buyers more than a room that really doesn’t mesh with their personal tastes as they often can’t look past the first impression. Big ticket items like flooring, countertops, bathroom fixtures and wall finishes should utilise colours that appeal to the greatest number of customers. Another sure win is to purchase a house with a northern aspect, as natural lighting is always favoured by property buyers and also creates the illusion of space which is always in high demand especially by families.
If you are considering purchasing a property to renovate and resell, Nu-Look would love to have a chat and workshop some of your ideas and come up with a reasonable estimate of the out of pocket expenses for your proposed project.