Pros:
You can build a home for a good price a lot of the time
Looking for the right property in an area that you like isn’t always easy but you may be able to find a property that needs work in a good location. If you want to really make money by renovating a property, buy something that needs work in a nice area so you can add to its value and then sell it. Or, if you want to sell it the way it is you may have a hard time but not if you lower the price. As someone that is doing renovations, you can’t really change the reputation of an area but you can change up how nice the home is.
A lot of the profit for a property comes from what you purchase it for so you have to be cautious about what you pay. In most cases, you want to purchase property that is able to be improved on that others may not have looked at yet so you don’t have to pay a lot. There are a lot of properties that have good profit margins associated with them but you still need to do research on what you’ll spend versus what you’ll make. See here for NTT building.
Is there potential to add a lot of value?
There are some investments you can make that will not turn out poorly. To add value to a property, you can invest in parts of the home like the kitchen and the bathroom. Most homes that you spend £10,000 on for a new kitchen or bathroom can add double that to the value or even more! Also, you can pay to get a loft extension for about £35,000 and on that investment, you can make around £100,000 when you add a bathroom and bedroom to the home.
There are also small projects you can do that will add value to a home
You don’t have to treat every renovation job like they have to be super expensive. If you want to find a property that you like a lot then you may want to work on a project that lets you turn a home that needs work into one you like. There are small issues you’ll find that doesn’t really cause a home’s value to go down so you can sell it at a good price. Here are some defects that homes can have that can be fixed by someone that knows what to do:
- Paint that needs to be redone
- Windows or doors that have issues like making noise or sticking when using them
- Floors and walls in a bathroom or kitchen that have issues with mould
- Latches on doors that need to be replaced
- Tiles that need to be replaced
- Smells coming from the sewage system
- Taps that have been leaking
- Windows that need to be repaired due to being broken
- Stairs and floors that make squeaky sounds
- Ceiling cracks or plaster that needs work done to it
- Flooring that is peeling
- Decor that is old and needs to be updated
Cons to watch out for:
One con is that you may spend more than you wanted to
There are a lot of ways to renovate a property to add value to it but there is also a risk that comes with it because it may cost a lot more than expected. And, even if you spend quite a bit of money on a renovation or two, you may not get a lot of money back in some cases. If you want to do a property renovation it is good to be as realistic as possible about what you need to do and get information on what steps to take. It’s also really smart to think of your budget and to stick with it at all times.
Try to allow yourself to have 20% extra in addition to your budget for buying a property so there is money available for problems