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Recognising the renovation potential of your property

Recognising the renovation potential of your property
Recognising the renovation potential of your property

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Many people believe that making a profit from renovating is all about the hands-on DIY of renovating. However Jane Slack-Smith from Your Property Success believes that most renovators miss the number one thing that will cause them to lose money every time - being able to recognise the renovation potential of a property in the first place.  She says you must start with the first inspection so you can really begin to assess and evaluate the property for true renovation potential.

The renovation itself is then about how to create more perceived value. That is, more than what you actually spend. She says this is key to making money and not overcapitalising.

Most would-be renovators watch renovation shows which mainly concentrate on the renovation rather than the actual property location. This means they are missing a key factor in the renovation project. When it comes to renovation, unfortunately not all suburbs are created equal and some suburbs have very little difference in value between an un-renovated and renovated property. In other words, even if you can complete a fantastic renovation at minimal cost, there is simply no margin present to add equity.

The key to a successful renovation, is starting with the right target area, then finding the right street, then the right property. After that comes the actual renovation.

What can you look out for to ensure it’s the right location?

A good renovation suburb has a spread of values present at the street level. This means that renovated houses are selling for substantially more than un-renovated houses. This spread of values is referred to as a pricing disparity.

Finding the right suburb for your budget can take a lot of research, but it is the foundation on which all other steps depend. There are several methods for locating a great renovation suburb - paid reports or online tools can shortcut the research while mapping out several years’ worth of past sales data is another method. Jane can show you how to combine both of these so you know what streets in your target suburb are the ones that have the greatest profit potential. If you just leave it to chance then no matter how much potential your property has, once you have selected the wrong location then you may never get your investment back.

How to recognise the potential for a renovation

For most, viewing your potential property with a dedicated process and a checklist in hand, is a good start. However, many don’t realise that the big drain on your renovation budget is all those little things that are often unseen and not planned for.

In Jane’s opinion the five biggest budget busters to watch out for in the existing dwelling are:

  1. Rewiring
  2. Restumping
  3. Replastering (which is often needed after restumping)
  4. Roof Repair
  5. Plumbing

If all five (or even three) are required, she suggests you should begin thinking about another property.

In her new video series, Jane explains the tell-tale signs of choosing the right property and how you can renovate and make a money every time. Plus she will give you a property inspection checklist so you always know what to look for.

Click here to see this great series.

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