Renovating Property For Profit

Renovating property for a profit is every investor’s intention; unfortunately this isn’t always the final result. At WISE our buyers agents have renovated their own property’s and helped many investors purchase there own property’s for the purpose of property flipping.

 

Property Flipping: buying a house that needs repair and fixing it up before reselling it for a profit (“fix and flip“)

Glen came to Wise Real Estate Advice looking for a property to flip. The strategy was targeting an old rundown house then renovate for profit.  Having a strict budget, we began a property hunt with the end goal in mind. Our team worked backwards starting with the final sale price of a renovated property, deducting the cost of renovation, fees/taxes and profit margin which gave us a shopping budget.

The criteria our buyers agents developed:

  • a renovators delight that’s structurally sound,
  • located within 7km of CBD,
  • quiet location, close access to cafes, public transport,
  • budget of around $800K,
  • a popular suburb that buyers will compete for. 

 

Brunswick Hentley St

After conducting an in-depth property search across inner Melbroune we targeted the Brunswick area. One of Melbroune’s most popular suburbs, known for it’s hip cafe’s, trams and retro real estate it made good business sense. Like with all property purchases, Wise Real Estate Advice always buys property with re-sale in mind and there were plenty of comparable examples in Brunswick. 

“The most important step in renovating a property is choosing the right one.”

Brunswick Renovator Finished

Brunswick Renovator Finished 1

Where is Brunswick

Below, Glen testimony:

Mark provided great advice, and saved me an enormous amount of time and research in finding properties that fit my criteria. Despite the fact that it has been a tough market for buyers, Mark was very patient, and we eventually closed the deal on a great property after the auction thanks to Mark’s negotiations. Mark is a very professional and knowledgeable Buyer’s Advocate and I couldn’t be more happy with his service. GLEN5 star buyers agent

 

Thinking about renovating a property for profit? There are many factors to consider in selecting the diamond in the ruff property to turn a healthy profit. Prior to being a buyer’s agent I sold many homes to amateur renovators. I discovered there was allot if skill in selecting the right property, knowing what to renovate and a correct selling strategy. Experienced buyers advocates can help you with the right property selection pointing your project in a profitable direction. Below are some points I look out for:

Six things to look out for when buying a renovator.

MAKE YOUR PROPERTY STAND OUT

At any one time there are hundreds of homes buyers can choose from, how is your property going to stand out and achieve a premium price? Desirable features make a house stand out from the rest. Look out for a property that has the potential for a high quality finish, high ceilings, unique landscaping or floor plan.

 

GOOD FLOOR PLAN

A good floor plan is one of the most important selling points of a house so renovators need to pay careful consideration when looking for property’s. Look out for multiple living spaces; windows that maximise natural light with good out looks. Consider the functionally of the living spaces and how practical it would be to live in the property.


OFF STREET PARKING

 Off street parking is something most people expect to have with a property. Not having off street parking will be a detractor for some buyers and reduce completion when bidding for your property.

 

CHOOSE A PROPERTY BASED ON LOCAL MARKET DEMAND

Consider the demographics of the area and target a property that will attract the most buyers when selling. More competition increases your chances of achieving a premium sale price.

 

STRUCTURAL DEFECTS

Avoid properties that need structural work. A key factor to a profitable renovation is adding visual value to a property, this means focusing on surface renovations that buyers and tenants can see. Spending money on structural improvements that are unseen can be costly and reduce profit. Buyer’s agents always recommend employing the services of a building and pest inspector. A building inspection report will identify major structural defects and reduce risk.

 

DECIDE YOUR PURPOSE

Knowing what you hope to get out of your renovations is fundamental. If you’re hoping to add a new floor or expand your existing layout there are different considerations than if you were to just change your floors and cabinetry. Mark Ribarsky, senior buyer’s advocate, suggests “sit down and work out what you’re trying to accomplish: are you hoping to make the place more comfortable with your existing layout, is the primary purpose to add more equity into your property, is your family growing and you need more space, or are you preparing the house for sale?” Depending on the reason you will have a better idea of where to start and how large a budget you will need to commit.

 

Once You Have Purchased

MULTIPLY YOUR OPTIONS
The easiest way to capitalise on your improvements is to save money along the way. For each job obtain three quotes from relevant tradesmen to make sure you don’t pay more than you have to. Remember though, that cheapest isn’t always best so make sure you do some research into the credibility and workmanship of the company. Word of mouth and online reviews are a valuable tool in ensuring the company you choose will be the best for your project.

 

PUT SOME WORK BOOTS ON
There’s a reason that many reality shows on television focus on DIY. Many jobs within a renovation can be easily accomplished without a trade qualification or without breaking a sweat. Painting, fitting internal doors and laying floorboards are simple things that can usually be achieved without the need for many tools. There is a great range of options online to help you through the process or check with your local hardware store as many provide free, or cheap, DIP classes to help you learn a range of skills to apply to your renovations. It is important to check with your local building authority about building restrictions in your area. Many states require certain works to be conducted by registered tradespeople and you may even need to get a permit for the jobs you undertake.

 

BARGAIN HUNTERS
It may feel overwhelming choosing the right flooring, fittings or fixtures for you’re your renovation, but that doesn’t mean you have to spend a fortune. Once you have a good idea about what type of style you’re going for, shop around. There are great deals to be found online or by taking a trip out to a wholesaler to get the products you want at a reduced cost compared with major retailers. The money you save by shopping around will help keep your budget down or even add to a much-deserved post-renovation holiday.

Buying property is an exciting time and a buyer’s advocate may be just the right person to help clarify your options. For an obligation-free conversation contact Wist Realestate Advice on 1300 009 473 to find out how their services can assist your property needs.


Property Buyers GuideDown load a FREE Home Buyers Guide, an easy to understand booklet designed to help you through the process of buying. Your copy of the buyer’s guide can be downloaded here