Here, we take a look at how to renovate your below-market property so as to increase its value – and not overspend.
Research and plan
The golden rule of “plan for three years and build for six” applies as a general law. It is extremely important to plan what exactly it is you want to renovate in your newly-purchased below-market property. Obviously if there are structural issues and problems, these need to be put at the top of the list and get fixed first.
Research will dictate to you what is most necessary for your area. If you are in a part of the country where it is cold, even in summer, installing heating would make a lot more sense than building a swimming pool. Also, if you’ve bought a three-bedroom home with only one bathroom, it would be wise to add a second bathroom.
But don’t get carried away with fancy additions: stick to the basics and stick to your plan.
Get the professionals in
If you can afford it, rather get qualified and registered builders in to do the work so that they can be held accountable and you will be assured that your renovations adhere to the highest quality of workmanship.
Don’t just rely on the first-come first-serve principle. Get as many quotes as possible and spend as much time as you can consulting with the builders before you make a decision. There are many fantastic and affordable builders out there.
Stick to your plan and don’t be swayed into unnecessary building.
Don’t spend too much
Your property still needs to be attractive to a seller and the whole point of buying a below-market property and renovating it is because you would like to make a profit.
I’ve seen it many times over: buyers purchase a below-market property and blow the budget trying to turn it into a state-of-the-art mansion and then, a few years later, are unable to get their price. This is where your research and planning will come in too.
You shouldn’t spend more than 15% of the property’s value on renovations if you still hope to make a sizeable profit in the years to come.