Conceptually, the whole process of renovating houses entails buying a property at the lower price and then selling them at a higher price than the amount of the property and its renovation cost. This has become a common practice among a coterie of investors in Australia. This is the simplest process of creating capital growth without waiting for so long for property prices to rise. Nonetheless, this is not a venture for anyone as many have made fortunes while several others have seen their savings wither. The determining factor for this success of this venture lies in the ability of an
Nonetheless, this is not a venture for anyone as many have made fortunes while several others have seen their business bankrupt. The determining factor for this success of this venture lies in the ability of an investor to spot an opportunity and how well he can forecast his margin from the envisage sale of the property. Renovation builders carrying out works for a property are in a position of advising on the cost of renovations and from that, the investor can estimate the total cost. Without a clear picture of the projected selling price, one is bound to overcapitalise and this may lead to losses.
An investor seeking the best houses to invest in should identify a particular suburb and select the specific properties with a potential of outperforming the market. Something that can easily be renovated without the burden of over capitalisation. This is purely a mind game. Numbers play a role in all this as it will act as a guide in the whole process of renovation. It is imperative to get renovation builders who can provide accurate estimates before the works start.
Having done all the forecasts and made a decision to renovate a house, it is important to be certain that whatever is being paid for is actually what is required. Accordingly, a number of due diligence measures in form of property inspections have to be carried out to find what hidden works have to be undertaken. Issues like cracks on the wall should not be taken for granted. Moreover, inspections should also give you an idea about the wiring and plumbing of the property and the tasks and amount it needs to fix them if necessary.
Importantly, it is essential to obtain the service of a real estate agent as this will enable the investor to obtain a better price. After agreeing on the price, then renovators can commence with the work. It is important to hire a project manager for the work as the process may be involving. A manager working together with renovation builders can help the reduce the overall cost of the works and make the margins increased considerably.