Are you considering getting into renovating for profit, but uncertain about the potential earnings? Perhaps you’re hesitant due to the already high market prices, or worried that your investment won’t yield a return?
If so, I’m here to offer a few tips to help you approach the renovating game with confidence.
It’s true that shows like The Block and House Rules have popularised the idea of renovating for wealth, portraying it as a straightforward process that anyone can do. However, the reality is far more complex. If it were easy, everyone would be doing it, right?
Here’s some tips –
Acquire a property that aligns with your renovation plan at an appropriate cost
The current property market is experiencing a significant surge, with rising prices and fierce competition to secure properties at reasonable rates. However, this doesn’t imply that one should give up on finding a suitable property for renovation. While it may be difficult to locate the perfect renovation project in a hot market, it is still possible to find a gem.
In a cool market, it’s generally easier to acquire a desired renovation property since there isn’t as much competition. However, this could also imply that there aren’t many potential buyers when it’s time to sell the property. In contrast, a hot market attracts a lot of people interested in purchasing a well-renovated property.
Therefore, the best time to renovate isn’t determined by market trends, but rather by locating the right property for your renovation strategy.
Do your research
When searching for the ideal renovation project, numerous factors must be considered. To prepare for your renovation journey, one of the most crucial steps is conducting extensive research. Blindly embarking on a renovation project simply because the kitchen needs an upgrade in the first open home you come across can be disastrous.
To ensure success, you must assess the situation from every angle. Who is your target market? What are your plans for the property once the renovation is completed? Does it match your renovation strategy?
Avoid the pitfall of settling for a property that doesn’t align with your objectives and strategies solely because it’s a good deal. For instance, if your plan is to convert a four-bedroom house into a luxurious open-plan masterpiece for families, avoid the temptation to buy a two-bedroom villa just because it’s a bargain. It won’t work with your existing strategy, resulting in a waste of time, energy, and money, as well as a decline in your eventual profits.
So, how can you locate the perfect property at the best price?
The area you’re focusing on has its own unique market
Media reports about the current state of Australia’s property market may be overwhelming, but it’s essential to consider the specifics. Not every property, in every suburb or city, is unreasonably expensive. While some areas may be pricier than others, it’s vital to recognise that Australia comprises numerous “micro” markets, each with its own set of characteristics.
Every region, city, suburb, street, and building has its unique market. Therefore, it’s crucial to compare similar properties within your patch, as each location has its variations. By conducting thorough research, you can always find a suitable property within your target area.
Keep in mind that your local area is not a fixed entity and can change over time
If you choose to focus on a particular area for your renovation project, remember that it doesn’t have to be a permanent decision. Market conditions can change, and so can your strategy. If you find that an area no longer aligns with your goals, you can always move on and find a new area that does. Similarly, if you want to stick with an area despite market shifts, you can adjust your strategy to suit. It’s important to keep in mind that staying on top of market changes requires ongoing research.
Renovating for wealth offers the advantage of flexibility and multiple profit strategies, unlike relying solely on market fluctuations for income. With these four tips, you can renovate for wealth in any market. And if you’re looking for an easier way to plan your renovation, consider exploring my resources HERE that can guide you through the process from start to finish.