3 Essential Tips for Maximizing Rental Profit Through Renovation
Our mobile world has given us innovative ways towards earning practically from our properties. Apps and websites have now evolved into marketplaces where we can rent homes or other residential spaces. This is a great advancement as we are able to put our properties to good use while earning extra income on the side.
If there is any downside, competition can be quite tough, with everyone being able to put up their properties on listings. One of the best ways to move ahead of the competition is to renovate your property and make it inviting for prospective guests.
Practical renovations and repairs to cosmetic renovations involving decorative stamped concrete are always beneficial. In this article, we give you tips for maximizing your profit from rentals through renovation. And if you’re looking for an expert concrete installer, Concrete Contractors San Diego is just the right company for you!
Location Matters
When planning to make renovations for-profit, one important thing to consider is where the property is located. This will determine what is the best route to take when it comes to renovations. If the property is in an area with cold weather, renovating to increase warmth and comfort would be the best option.
If the property is generally sunny and even near the beaches, it would make sense to renovate to increase ventilation and enhance outdoor living. The location also determines if a property would be used for the purpose of staying in to enjoy the area or as a stopover or resting place.
Consider Your Target Market
This second tip is somewhat related to the first one. Let’s say your property is located near a theme park, you can expect to get inquiries from families. If you are at a notable honeymoon destination, you can expect couples to express interest in renting your property.
Doing your research to identify your target market will certainly prove beneficial to your renovation plans. You have to determine what your target market wants from a rental place and how you can address certain issues that may arise.
Pre-plan Your Renovation to Save Time
Renovating can indeed be time-consuming, although it is definitely worth it in the end. Unfortunately, delay in operations is part of the investment you put into a renovation project. With that being said, the more time you save, the more money you’ll save as well.
Planning ahead is essential to this and can be done with the advice of the contractor you work with. Get a clear picture of when the project will start, how long it will take, and when your property will be rented post-renovations. Strategic planning would also include considering peak tourism dates.
Make Sure You do Thorough Suburb and Property Due Diligence
“You need to work out whether the deal is profitable or not. Suburb due diligence involves analyzing the suburb to ensure enough pricing disparity exists (the range of low to high property values in the suburb). Property due diligence means making sure you’re buying a diamond rather than a dud! Whenever I renovate, there are 64 different things I ensure I check.
A thorough building and pest inspection is one of those things, but I also check less well-known aspects of the house, like electrical wiring and structural cracking. Only once you’ve done your suburb, and pricing due diligence will you know whether the deal is profitable, and that process can take months.” https://renovatingforprofit.com.au/secrets-renovating-profit/
Research who your target market is and then tailor your renovation to that market, whether it’s young families (think safety and practical play areas), singles (security) or busy couples who want a low-maintenance property (no expansive lawns or gardens to maintain).
Doing your research will certainly be beneficial. Researching to identify your target market, then tailor renovation to their needs and wants.
Renovate to What the Market Wants, Not Your Own Personal Style
“If you’re renovating your own home and you’re not planning on selling any time soon, renovate however you want because you’re living there. However, if you’re renovating as a flip, you must renovate to what the market wants. You need to identify what property style is most popular in the area you’ve bought in.
Work out what properties in that area are expected to have in terms of the number of bedrooms, whether or not it needs a formal dining room, whether a European-style laundry will do or if you need a full-size one, and if you need to factor a garage into your plans. Think of your renovation like a product: all you do is create a product to meet the market’s needs.”
Pre-plan Your Renovation as Much as Possible Before it Starts
The devil is in the details! Ideally, you should be completely costing up the entire renovation before buying the property. Many Australians only tot up renovation costs after buying the property and then realize they’re on the back foot.
This can be easily avoided by ensuring you do your homework beforehand. You need to identify the full scope of work before your renovation starts. Cost everything up, finalize your design plan, and buy all your materials before the renovation starts. Every time I start a new project, I have a project plan and map out the construction sequence step-by-step, and work out what materials are required for each task.
That way, I know if I’m over budget before the renovation starts. If I can see I’m going over budget, I will cut out some of the work I’d planned because it’s no longer possible from a budget perspective. If you fail to plan, you plan to fail. What you do before your renovation starts to dictate your profit margin.