Productive Renovations Generate More Profit
Sunday, August 15th, 2010Of course you have seen a lot of home renovation programs. Of course you have!Asking this question definitely gets you an already obvious answer. It would be surprising if you have not encountered this kind of show as there are already a lot of home remodeling programs in the television. There is really nothing wrong about them. But who do they cater to? They show that they are just trying to offer aid to families who are in dire need for home renovation. They presume you have an unlimited budget (almost) for the renovation, your own personal designer and they presume also that you have a background crew of 20 people to help you get it finished in one weekend! Well, wouldn’t that be just dandy?
The main problems lay on the fat that these shows do not really put in mind the relationship between spend vs. value. For property investors, the most important thing to consider would be to do renovations at a cost that would not hurt decisions on selling/renting/revaluing a certain property to avoid over-capitalising.
One of the things that I’ve notices with investors is that they do the renovations themselves in order to avoid spending on a designer. That is if the designer is that bad to eat all of your budget. However getting professional advice (or at the least following the pointers that follow!) will accelerate your chances of making a profit – just as using a real estate agent to sell your property will increase the probable sell price.
So, if you’re looking to renovate property for profit (to either A. pull equity out of, B. sell for a higher price or C. rent for a higher amount), follow these simple steps to get you started. Heed the advice given by these tips and start doing your own renovations even if you are on a tight budget.
Get your mindset right. You are not doing the renovation from your own house where you will be living. Always put into mind your prospect clients. Do not let those design magazines fool you, just use the image of your customers in mind. Go for the hard changes, the ones that are fixed, and do not put soft changes, the ones that concern furniture and artwork, as your priority as the former are more practical; and reasonable.
Make a list of every single element in every single room. Make sure that you have everything listed. For example in a kitchen you would itemize out: cabinetry carcass, doors, handles, kick-strip, bench-top, sink, tap, splashback, then the lighting, power points, flooring, window treatments, among others.
Analyze each element if they serve some kind of purpose in the room that they belong to. Rather, you should see something in terms of its condition. Are they in good condition? {If they weren’t adjacent to the things they are adjacent to now (instead, for example, in a more modern setting) would they look ok?Would they not look as pleasing as they are ion their current position if you imagine some of the other elements in the room not present?} Take each element as they are and from there make a sound decision if you are going to keep it or not.
Then, if you do need to change some of the elements, which among the four methods would you choose. The four methods include to renovate, repair, remove or replace. You want to look at this from the point of view by asking yourself what is going to cost me the least and give me the most? Consider the 80/20 rule. What can I invest 20% on for 80% return? You are not after for the 100% outcome, instead you are going for the 80$.
Think about the prospect customers and what are you going to do to improve the place. Your plan would depend on the kind of renter or buyer you have in mind. Always have the client as the determining factor of your design, but also do not forget to always keep the design to a minimum. Give the buyer or tenant a blank canvas to add their own flare to.
Imagine the plan that you were able to come up with. If you were to make ONLY that change, would it make enough of a difference? You know you are set if you get an astounding yes to that question. Often though, we need to make non-essential changes so that the space is more aesthetically pleasing.
Come up with a budget plan before you get he ball rolling. Get written quotes and only give the contractors the go ahead once you have ALL your pricing together. Always include a contingency. You will save yourself big headaches and probably some costly mistakes.
Set a deadline that is much earlier than your expected completion date. Keep this to yourself and keep the pressure on as if this date were correct.
It is a good idea to frequently visit the site while the contractors are working on the improvements that you have planned. Be as nice as pie to your contractors as they will be the ones to save you money if they LIKE you!
Pay your contractors on time after they have finished every last detail on your project.
Hotspace fills the gap between property owners using a traditional (often expensive) designer – and not getting any assistance at all. Thus, Hotspace provides an opportunity for anybody to get qualified help and home renovation ideas before they spend thousands, or tens of thousands of dollars on their home renovation. To know more about Hotspace and efficient and cost-effective renovation ideas, visit www.hotspaceconsultants.com.
