Australians have already spent close to $15 billion on renovating and building residential homes since the beginning of 2016.
One of the key reasons people choose to renovate is to ‘increase property value’. However, the average Australian renovation costing almost $48,000. So it can be difficult to guarantee a return on investment.
Zaki Ameer, Real Estate Expert and Founder of DDP Property (DDP) says, “Successful renovations can generate considerable amounts of wealth. The associated risks can be kept relatively low if the strategy and planning are executed correctly. However, many investors and homeowners go about renovating in a way that involves more financial risk than necessary.”
Mr. Ameer explains his expert tips for how investors and homeowners can generate wealth from every renovation:
Avoid anything structural and stick to existing layouts to keep costs down
Utilising already existing layouts and adopting a well-planned cosmetic renovation equates to a quick home revival with minimised costs. It is possible to exercise this method and achieve a small lump sum profit margin within only a few weeks.
Know which areas will add the most value
It’s important to know that the three main areas that increase property value; street appeal, the kitchen, and the bathroom.
Street appeal is associated with: land value in a good location, boycotting major roads and traffic, under flight paths, or close proximity to transport lines.
When it comes to value, the bathroom and kitchen are of great interest. This is because they are rooms where large amounts of time are spent.
Small changes, such as modifying tiles and laminate paint, can convert an outdated design to present a more modern appeal.
Buy and then renovate at the lower end of the market
This strategy may appear too ambitious. But there will always be vendors who are desperate to sell. This offers a high-speed, hassle-free opportunity.
Time is money
So only buy properties that can be cosmetically improved in 3-5 weeks. It is essential to know the worth of the property after renovations have been completed. This will help to determine its profit figure and viability. Avoid properties that require work that will be expensive and time-consuming, such as stormwater or rewiring. Instead aim for cosmetic renovations only. These only require external modifications with new paints, carpets, appliances, kitchen and bathrooms, and an all-round sufficient tidy-up.
Use your creativity wisely
‘Cosmetic renovations’ are visual changes aimed at increasing the physical attraction of a property, and often they are very successful. For example, if the backyard of a property is neglected, its value can increase simply by adding basic garden. This is because it increases appeal.