Renovating for Profit
Renovating for profit is quickly becoming a popular way to earn a good standard of living. If done correctly, it can generate a good level of profit for those that are successful. This entails following the key rules and understanding the market. Buying the right property, adding value in any renovation works and tight cost control throughout the project life, are all key to being successful. This, along with knowing what sells and how to sell it will maximise the chances of any renovation project generating a healthy profit.
– When renovating for profit, always ensure that value is being added to the property. Excessive decoration and accessorising while it might be attractive, may be sub-optimal use of funds. If it doesn’t add value, don’t do it.
– Ensure that decorating is carried out with the taste of the target market in mind. Well presented woodwork, neutral colours and an easy to maintain interior will all help to maximise the final sale price. Above all, the property should be clean and fresh, especially in the kitchen and bathroom.
– Certificates for the electrics, gas and plumbing are essential. It is important to provide buyers with the assurance that costs such as rewiring or a new boiler will not be added to an already cash draining project.
– The only way to keep costs under control is to ensure the project is managed properly. The first critical stage of any project is planning. Where possible, using the skills of a professional project manager will ensure that costs are tightly controlled and objectives within the original scope, are achieved. However, there will always be unforeseen problems with any renovation, so ensuring both a time and budget contingency in place is a prudent approach.
– Using high quality and where possible, specialists in areas such design, electrics, plumbing and building will ensure that the work is done to a high standard and over-runs are minimised. Where friends or family are available to lend such specialist skills, this can be a good way to minimise costs however ensuring that their availability is clearly defined at the outset, will minimise the risk of project delays.
– Ensuring that finance is in place is a critical part of the planning process. Reviewing the options available will identify the financing costs associated with the project and can therefore be included in the initial budget preparations. Additionally, using appropriate renovation specialists will help to ensure that any planning permissions and restrictions are taken into account when considering the factors impacting the overall budget and hence project financing.
The project manager is central to the success of any large project and in the case of large renovations, is an essential requirement. Project Management can, in itself become a significant cost in relation to the overall budget but considering the benefits in terms of managing costs, time constraints, objectives and assisting in critical decision making, this can be a very effective use of funds.