There’s money to be made in renovations if you follow some golden rules.
When Michael Woodcock began renovating his 100-year old cottage in the NSW Hunter Valley, he had romantic notions of modernising the character home on a tight budget. Several years and countless cost blow outs later, Woodcock says it’s been a tough grind.
“Do-it-yourself renovating can be a hard slog both physically and financially,” he explains. “I underestimated how much the whole project would cost in terms of time and materials, and it didn’t take long to realise that old homes can dish up plenty of surprises like uneven foundations and dodgy wiring.”
Although Woodcock believes his improvements have doubled the value of the property, he admits to making some classic mistakes including bypassing a renovation budget and choosing to do most of the work himself.
Research is critical
In his book, “The Insiders Guide to Renovating for a Profit” renovation guru Patrick Bright says one of the key steps to making money out of renovations is research. It’s vital to have a firm idea of the likely cost of the project and the value the works will add to the property.
Bright also believes that a DIY approach isn’t necessarily a money saver. Hiring professional tradespeople will cost more but chances are you’ll get a better quality finish with the job completed sooner.
Another key step is buying at the right price. Don’t be afraid to negotiate because as Bright points out, every dollar saved on the purchase price is extra profit in your pocket. Check out more of Patrick’s renovation tips at www.epspropertysearch.com.au.
Know what you’re getting into
It’s also important to know exactly what you’re buying. The hidden nasties Michael Woodcock discovered can be avoided with a pre-purchase property inspection.
David Hallet, General Manager of building advisory service Archicentre explains, “A pre-purchase inspection lets you know immediately if there are any serious building faults and is extremely valuable when you are negotiating your purchase.”
He adds, “The worst case scenario is when halfway through a renovation a major problem such as termites, or structural defects are discovered leading to costly variations and substantial impact on the financial return.”
Archicentre has compiled a useful renovation cost guide that can be downloaded from www.archicentre.com.au/cost-guide