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, with the average Australian renovation costing almost $48,000, it can be difficult to guarantee a return on investment.
Zaki Ameer, Real Estate Expert and Founder of Dream Design Property (DDP) says, “Successful renovations can generate considerable amounts of wealth, and the associated risks can be kept relatively low if the strategy and planning are executed correctly. Unfortunately, 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:
1. Avoid anything structural and stick to existing layouts to keep costs down.
Utilising already existing layouts, such as bathrooms and kitchens, and adopting a well-planned cosmetic renovation equates to a quick home revival with minimised costs. It is very possible to exercise this method and achieve a small lump sum profit margin within only a few weeks.
2. 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. The bathroom and kitchen are also of great interest when it comes to value as they are rooms where considerable amounts of time are spent. Small changes, such as modifying tiles and laminate paint, new light fittings, and satisfactory storage, can convert an outdated design to present a more modern appeal.
3. 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, which offers a high-speed, hassle-free opportunity. Even if the house needs a significant amount of renovating, if it is located in a suburb with desirable property values, a significant profit can often be achieved.
4. Time is money so only buy properties which can be cosmetically improved in 3-5 weeks.
It is essential to know the worth of the property after renovations have been completed 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, which only require external modification with new paints, carpets, appliances, kitchen and bathrooms, and an all-round sufficient tidy-up.
5. 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 items such as a picket fence, garden beds or plants as it increases the appeal.
Zaki Ameer is the Founder of Dream Design Property (DDP), a unique wealth creation mentoring program that is designed to help Australians gain financial freedom. Offering each client an ongoing personalised service catering to their changing circumstances and needs. DDP has helped its clients purchase nearly 800 properties and has recently launched Kickstart, the first affordable program designed specifically to help Gen Ys take their first step into the property market.
For more information please visit www.ddpproperty.com.au and www.ddprealestate.com.au