“The cardinal rule of renovation: I am renovating for profit, not for my personal preference!”
As a nation, we are renovation obsessed! Don’t believe me? Just switch on the telly… From The Block and House Rules to Brothers vs Brothers, the appetite for renovations and real estate is exploding. The problem, unfortunately, is that these “reality” shows make renovating for profit look deceptively easy…
So today, I’m revealing the three biggest mistakes new renovators make.
Renovating for personal preference or as a creative outlet instead of for the target demographic is one of the most common mistakes new renovators make. To avoid this, it’s crucial to complete a thorough demographic analysis of the area in which your property is located. Knowing if your target market is a renter studying at university or an owner-occupier with a growing family will greatly influence the type of renovation you do.
Renovating for the right target market can save you thousands of dollars, time and effort on features, fittings and finishes that aren’t in demand.
Successful property investors base all their renovation decisions on reliable data, research and analysis. They have a strong understanding of their target demographic and know what they want in a home.
New renovators often forget how important first impressions are. But successful renovators know that the ultimate goal of a strategic renovation is to increase perceived value of the property.
So when prioritising a renovation, the areas that your target renter or buyer are going to see first matter the most. Most of them will make a decision before even stepping inside the property. And you don’t get a second chance to make a lasting first impression.
That’s why things like landscaping, painting, the entrance foyer, kitchens and bathrooms should be at the top of your list. The best part is… this work doesn’t have to be expensive. And if you do a strategic renovation, you should be able to get a return of at least $2 for every $1 you spend.
Staging a property with stylish furniture for potential buyers, tenants and the valuer is a powerful way to maximise perceived value which can drive up the sale price, new valuation and rental yield.
But a lot of new renovators miss this opportunity altogether.
The sad thing is the cost of staging a property with hired furniture has a remarkably high return on investment. Properties that have been staged consistently sell at a higher price than comparable homes that are empty.
Even if you’re renovating for renters, staging a property will present it in the best possible light for the valuer. And you can retain the hire furniture to attract potential tenants during rental opens.
To renovate for profit, you must have a good understanding of who you are renovating for. And don’t forget the valuer’s impressions also count. Doing a thorough demographic analysis and focusing your renovation on a lasting first impression will set you up for success.
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