So you’ve bought an investment property that needs some work done – what now? How do you make the most of your investment? Here are ten things to consider when planning your renovations:
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- Check your figures
Before you start, check your numbers. When investing in property, it makes no sense to spend £15,000 on a renovation that will potentially only add £5000 to the value of the property. Speak to local agents and ask for their opinions on the possible returns available. They will also be able to give you advice on what style and type of property buyers or renters in your area are looking for. - Consider your target market
Who do you think will buy or rent your property? A young professional couple will want an entirely different style of décor and fittings to a retiree or a young family. Keep your target market in mind when planning your work. - Set a budget
Be clear on the money you have to spend and stick to it. Keep detailed records of all spending and make sure you always know how much of your budget is left. Set aside a sum as a contingency fund for unexpected expenses or emergencies. - Stay on plan
Planning is everything in property development. A detailed project plan will help to keep you on schedule, ensuring you know what’s happening and when. The sooner the property is finished and sold or rented, the quicker you get a return on your investment. - Keep it legal
If you are planning major building work such as changing the interior layout or perhaps building an extension, speak to your local planning department first to find out if you need planning permission for anything. - Don’t go overboard
Investing in property is a business venture and while you might choose an expensive designer tile for your own kitchen, you don’t need it in your development. Give your development a high quality finish but don’t go overboard buying the most expensive products every time. - Keep it classic
Don’t be tempted to use very fashionable fixtures as they will date quickly and may not be to everyone’s taste. In order to appeal to the widest possible market, keep the fixtures, fittings and décor of the property simple and classic. - Use professionals when you need to
You might think you can save money doing work yourself, but it’s often more financially sound to pay a professional to do the specialist jobs such as tiling or decorating. Two or three days of work from a professional may work out more economical than you spending two weeks or more trying to do the same job. - Shop around
Shop around for your fixtures and fittings. If you know exactly what you want, the internet can be a great way to find what you need at the best price. Alternatively, if you are prepared to be flexible, Ebay is often a great way to find one-off items or end-of-range products at great prices. - Make it unique
Find some way of making your development stand out from other properties. It can be something as small as a spa bath or a steam oven, or as big as a cinema room or a gym, but a unique touch will make your property stand out from others on the market.
Anyone got some personal experience with renovations that they want to share? Did I miss anything?
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Great tips. When it comes to renovating my rentals, I am always torn between making things look nice to hopefully attract a nicer tenant that will stay longer, and making the bare minimum to put it back on the market, considering tenants will incur wear and tear. It is worth taking a little time to find a balance.
Pauline recently posted..13 money resolutions for 2013: #9 max it out!
I guess you are a bit of an expert now Pauline 🙂
I definitely agree with the “don’t go overboard” and “who is your target market” statements!
Keeping things durable is also important. If something is easy to ruin, it is probably not the best choice to have in a rental. An example is cheaping out on carpet, unless your plan is to replace it frequently. On the other end of the scale, there are some countertops that are pricey and high maintenance, you probably don’t want those ones!
Anne @ Unique Gifter recently posted..Taking a Carriage to the Ball (aka Transportation Savings)
All things to consider indeed. I am with you on the carpets… perhaps wooden floors are a good idea for rentals.. or laminate equivalents. Especially if you rent to students! 🙂
Fantastic tips here! As a Realtor, I can certainly say these are all things to keep in mind during any investment property renovation! Things can get out of hand quickly and having a plan is crucial! Always do your due diligence!
Edgar @ Degrees and Debt recently posted..Maintaining Multiple Incomes
Cheers Edgar! If a realtor agrees they must be good! Have a good weekend 🙂
I definately agree with using the pro’s to do certain jobs. It’s easy to get carried away doing things yourself but it’ll often cost you more in the long run. You might also spend thousands doing up a house only to spoil the finish with bad plastering or decorating.
Money Bulldog recently posted..A guide to understanding the balance between risk and reward
Absolutely… Got to know when to be a ‘man’ and be sensible and call in someone! As hard as it might be on your pride 😉
I think you have it covered. It is easy to get caught up in what you like, when you really need to keep it simple, functional, neutral, and classic. I really like modern type finishes, but those would not be a good idea for a rental. You also don’t want it to look like a loaf of white bread with all white walls and wood trim. Fortunately, there are lots of classic finishes that are also very affordable thanks to places like Home Depot in the US. Do you have Home Depot in the UK?
Kim@Eyesonthedollar recently posted..My Child Needs Glasses, Now What?
Agreed. Simplicity is always the best idea… We don’t have home depot in the UK (I have been to home depot numerous times in Dallas) but we have B&Q and Homebase which are very similar! Love a bit of DIY 😉 Interesting fact for you – B&Q own the domain DIY.com – bet that is worth a fortune!!!
Excellent tips–I use the same strategies for renovating my own home (but I do upgrade the fixtures a bit!).
The Happy Homeowner recently posted..Do No Spend Days Really Work? (and a CASH GIVEAWAY!)
Thanks! Hope you have a great weekend 🙂
The one thing i’ve realized is that it’s a lot easier to do all the repairs/fixes up front when you buy the property. Personally, with my place, after the first year or two, I was pretty unmotivated to keep working on it. Kind of just let it be 🙂 haha
Awesome site re-design btw, looks great!
Harry @ PF Pro recently posted..Save $500 on a New iPhone 5 Through Walmart/Straight Talk
Hey Harry… Totally with you on this one!! Big ideas and all that 😉 – the momentum soon dies down!
I use these strategies for renovating my own home and definitely do upgrade the fixtures! Either way, great tips!!
Eddie recently posted..Doing Business With Friends – Could It Work?
Cheers Eddie… Have a great weekend buddy