Renovating a property is one activity that everybody needs soon after buying a house. The whole place may not suit you or have the right features that you desire in a home. Or it could be that the house has a couple of broken furniture or leaks. Nevertheless, many people do not realise that they can renovate properties for sale. But how can one go about buying a house to renovate and then sell it? Surely, renovating for profit doesn’t mean changing the colour of the paint and expecting a paycheque for doing so. Follow these rules to understand how to buy a house, renovate and sell it for profit.
What Type Of Properties Can You Renovate For Profit?
Since the goal is to make a profit from the sale of the house after renovating it, not all properties will make the cut. You have to look for those that are not too expensive to renovate, and are worth it. Houses that you can easily renovate and sell for profit include;
- Auctioned properties: These are the easiest to acquire if you can afford the asking price. Renovating and selling auctioned properties will make lots of profit for you if you know how to go about it. You need to change a couple of features and let the money roll in.
- Residential properties: Residential properties are the most common houses to renovate. They are easy to acquire and are usually available at a fair price.
- Commercial Properties: These are the kind of houses that need total renovation before they can be put for sale.
Steps To Take When Renovating A Property For Profit
1. Carry out intensive research on the available properties
To get the profit you desire from renovating and selling a home, take out any emotions you may have and research all available properties. Find out what changes will add value to the property that you want to renovate. Learn what the prices of similar houses with the same features are. This will help you fix a good price for the renovated property. It is also essential to have an understanding of how the real estate market works. Understanding the ups and downs of the market will allow you to make better decisions when renovating a property for sale.
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Also, research what buyers want in a property before renovating it. You will also need to understand who your target audience is. Remember that you are not renovating the house for yourself. Renovation styles of properties may work for a particular group of people, while the same style may be a turnoff to another.
2. Buy the right property at the right price
If you do not already have a property that you intend to renovate and sell, then you need to purchase one. Prices of houses are skyrocketing daily, so be careful not to overpay for any property. Keep your emotions aside. Think like an agent of a property renovation company, and negotiate the price of any home you intend to renovate and sell.
The worst property that you can find in the market is the best house to buy and renovate. Such properties will not be attractive to many people, which is not a bad thing. It just means that you have to transform the house into what people would like. The majority of these properties have the potential to bring in a lot of profit for you when you sell them. Buying, renovating and selling big and expensive properties may not give you the profit you desire.
3. Stick to your budget when renovating
It is easy to change everything in a house you bought for renovation if you do not have a budget. It is essential that you have a budget before you renovate a property that you will eventually sell. Make sure that every new feature that you buy will add value to the house, and increase its market value when you want to sell it. You can get advice from anyone who is accustomed to the real estate market and the prices of products and services that you will need in renovating a house.
Remember that undergoing the renovation of a property to sell it is entirely different from interior designing. You may slightly increase your estimated budget but never put it so high that you would get a loss when you eventually sell the property. Experienced renovators recommend that you spend about 10% of the property’s purchase price on renovations.
4. Fix up the essentials first
If you buy a house that is already in good condition, then you have half your work done for you. A few changes will make it ready to be sold in the market. But if there are a lot of things to change in a home, then start with the essential rooms or household equipment first. Spending too much money on the kitchen, bathroom, and adding fancy touches are not the best moves to make when renovating a house for sale. Instead, inspect the house and fix those things that are essential to your target market. A roof work, rewiring job and fencing are always considered more important to any buyer.
Having a limiting budget will make the job of fixing the essential things easier for you. No buyer will care more about the colour of his/her bathroom than a leaking roof!
5. Remodel the house while renovating
Remodelling and renovating are not the same thing. Remodelling means changing the structure of and selecting the optimal use of space. After fixing the essentials of a house, you should consider remodelling it. A couple of things you could do are;
- Extending the house upward: This may not be possible in every situation, but when it is, extending is a great idea. Consider extending the house upward rather than outward because it is cheaper. Moreover, you would not want to extend the house outwardly to affect the space for the garage or garden.
- Convert any space: It is very likely that the house will come with a lot of space. You may convert this space to something useful for the occupants.
- Extending the house downward: This is expensive to carry out. It works well in high-value cities and for buyers that require a basement.
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6. Pay attention to the secondary defects
Secondary defects are the small ones that do not affect the value of the house. After fixing up the essential things and rooms, then handle all the superficial ones. Some superficial or secondary defects that you should also change include;
- Loose tiles
- Bathroom and kitchen leaks
- Ceiling cracks
- Sewer smells
- Peeling paint
Remember that these are not the primary things to renovate in a property. You should only consider changing all of these if they are important to the buyer, and your budget permits it.
7. Sell the property at the right price
The goal of buying and renovating a property is so that it can be sold, and you can get profit. But if you fix a price that is too high and not benefitting of the value of the house, then no one will buy it. Remember that in the real estate market, there is a ceiling for every house. You cannot just renovate for the fun of it and expect people to pay huge amounts.
The best strategy is to compare other properties that others have renovated and sold and use that as a yardstick for your house. Alternatively, you can find out what companies charge to renovate and sell a property in the UK to buyers and use that as well.
Also, when selling your property, make sure that you don’t under-price it. You do not want to make a loss from its sale, so value the renovated house properly. You can get help from real estate companies to do this for you.
Common Mistakes To Avoid When Renovating For Profit
The steps you should take to renovate a house that is for sale are simple to follow. A few mistakes to avoid when renovating include;
1. Handling the whole project by yourself: It is usually not a good idea to take a house renovation as a do-it-yourself project. A lot of jobs need to be outsourced to professionals. Do not hesitate to employ such experienced professionals to provide the services you need and include their wages in your budget. Castle Point Construction offers one of the best home renovation and remodelling services in the UK. Do not hesitate to call on us for your renovation services.
2. Ignoring the needs of the buyer: The property that you wish to renovate is not going to be inhabited by you. Hence, do not personalise everything in it. It is good to add a few classy touches, but do not stray from the needs of the buyer. Also, find out what buyers like in a house.
3. Overpaying: Luxurious properties are not usually easy to renovate and sell for a profit in the market. No one is going to buy a property when it has been overpriced. You should make sure you do not overpay when buying a property because the purchase price negatively influences the realisable profit.