Renovation
Many people have bought properties, renovated them, and then sold for huge
profit. It can be done, you just need to know what to look for and check market
conditions. Renovation is more than just buying a house then painting, fixing up
then selling, you must know what to buy and when to buy for that area.
You may have seen shows such as Renovation Rescue and other TV reality shows
that show what people do while renovating then selling. You would probably
notice these shows only pop up during property booms and with a good reason. You
can do a successful renovation in a property boom and sell with a huge profit.
But the reason generally behind this is the price has risen during the
renovation process and hence it’s the property market that has gone up massively
not the house due to the renovation.
Capitalization
Capitalization in general terms with property is how much a house is worth
compared to its location. You can undercapitalize a property or over capitalize
a property. Over capitalizing a property is putting too much value in the house
compared to its location. For example building a two storey house in a low
socio-economic area. People who would normally live in a two storey house would
not want to live in a suburb that was not attractive to them. Under capitalizing
a property is for example a one storey house in between many 3 storey mansions.
Looking at this it’s preferable to get undercapitalized properties and renovate
them. Adding a storey on to this one storey house will add far more value than
what the additional storey cost in the first place. Not all renovations need to
be as drastic as this; it’s there just to help explain the point.
Top Renovation Areas
The most talked about renovation area is the Kitchen. A big nice clean workable
kitchen is a great way to add value to the house. The kitchen is normally
somewhere central to the house and hence its appearance affects the rest of the
house. If the kitchen is really bad, rip it out and put in a new one. It will
instantly add a lot of value to the house. A new stylish modern looking kitchen
will have any one seeing the house as more valuable.
The garden is the first thing people see when looking at a property. A neat
garden gives the potential buyer a good impression of the property as they walk
in and adds great value to the home. The garden could also be the difference
between someone looking at your house compared to someone driving by. While the
house is on sale it’s always good to plan your garden to look great long after
you have finished it. You want to make sure you have hardy, plants that survive
very well when left alone. You may also want to hire a gardener once a week to
keep the garden in check while the house is up for sale.
Bathrooms are another top renovation area. A spacious clean bathroom or en-suite
add a great feel to the home and make it look clean an inviting. No one wants to
shower in a dirty dark bathroom every morning. Make
sure the bathroom has lots of light, this may involve painting parts of it
white, or adding/expanding windows.
You may have noticed my wording throughout those paragraphs, of a lot of
emotional words and feelings. This is what prospective buyers are after, if they
are buying to live in. A welcoming atmosphere that seems like home. Think, what
would make the house a place you could call home.
A fresh coat of paint goes a long way to uplifting a house; try to keep
the colours neutral and appropriate for the room.