Renovate For Profit - Simple Steps To Follow
Have you ever wondered how professional renovators manage to find run-down properties in great suburbs and make a profit from renovating? It can feel daunting when you’re unsure of whether you’re buying in the right area, whether you can even find a property with profit potential or if you will have a buyer for your completed project.
Here are 4 simple steps that I used in a recent renovation and which I hope will help you gain the confidence and clarity you need to embark on your own renovation project.
Tip #1 – Make sure you buy your ‘Renovator’s Delight’ in an area that has plenty of buyers who will desire your finished product
It’s important to determine that there is not an oversupply of houses for sale, with too much stock on the market and no buyer urgency. You can find this out by talking to local real estate agents and by checking the data for your suburb.
I found this ‘renovator’s delight’ in a coastal suburb where the supply vs. demand scale was balanced equally. Many of the houses on the beach side of the main road were over twenty years old so I knew there would be buyer’s looking for my beautifully renovated end product in the more desirable part of the suburb.
By presenting my completed renovation to the market in summer, using calm coastal colours, I was able to appeal to the senses of buyers who were looking to embrace the Aussie beach lifestyle.
Tip #2 – Become best buddies with your local real estate agent!
Local agents are your eyes and ears on the ground and are first to know about potential “cash cows” being listed for sale. Communicate clearly what kind of property you’re looking for and what you intend to do with it. By having an honest, respectful relationship with your local real estate agent you stand the best chance of being matched with your perfect property as soon as it becomes available.
By employing this strategy, I was able to find out about this house BEFORE it was advertised on the property search engines. I knew that I could make a profit, as long as I could secure the property at my “walk away” price.
Tip #3 – Understand your target market
Know exactly who will be buying your renovated property BEFORE you even purchase it! You need to know who is looking in that suburb and understand what they want in a home. By making sure your renovation ticks all their boxes you will have the best chance of achieving a quick and profitable sale at the completion of your renovation.
This house was in a strong community-minded family suburb and I knew that my end buyer would be a family with children. They would want separate living spaces and an open plan kitchen area for family gatherings. Having a parent’s zone with luxurious master suite and a large backyard for the children would also be valuable drawcards. By keeping my end buyer in mind at all times, I was able to achieve the goal of having a family fall in love with the property and desire it for themselves.
Tip #4 – Always furnish your renovated property for sale
How will buyers fall in love with your renovated property if they can’t see themselves living happily in it? An empty home is a soulless home and they just won’t feel that connection if it is empty.
Perth’s property market has really been suffering over the past few years with falling prices, low buyer urgency and many houses not selling at all. I didn’t need convincing that bringing in the property stylists was a good idea but my sales agent confirmed my decision with this remark:-
“100% of properties that have been styled have sold. I recently had two identical properties around the corner from each other for sale, one styled, one empty. The furnished property sold for a whopping $60,000 more than the other one!”
When people ask me if property styling is expensive, I say “No way. NOT styling your property is expensive…”
Making a profit is the aim of the game but the added bonus is how good you’ll feel knowing you’ve turned a neglected house into a beautiful family home once more. Happy renovating!