How to make extra money or build a business renovating property
Property renovation is one of those opportunities which thrives whether the property market is booming or falling. It could be an exciting way to make some extra cash or even build a full time business.
Because, no matter what else is happening, all property gradually deteriorates over time, and tastes, fashions and demand patterns change. That creates opportunities for savvy entrepreneurs to buy, renovate and sell properties of all kinds.
But a property renovation business isn’t the same as, say, buy to let. Here are some tips to point you in the right direction if you’d like to be a property renovator:
* First and foremost, get to know the area you’re thinking of renovating in. How are prices moving there? What sort of properties are in demand there …. for example small economy flats, luxury flats, student houses, affordable family homes or prestige properties?
Most estate agents will be happy to have a chat with you about how the market’s going in their area.
* Know your likely customer. That is, the type of person who’s likely to buy your property once it’s been renovated. Without creating a property that is too specific to one type of buyer base your renovation plans broadly around creating a property which will appeal to them. For example, young professionals, families and retired buyers expect different things from a property.
* Buy cheap. As cheaply as possible. You need to buy below market value wherever possible. Look at buying from auctions, or for repossessed sales through agents. Buying direct from sellers who are selling direct without an agent can also be a good way to save in some cases.
Here’s are couple of articles you will find useful: How To Buy Property Below Market Value
Make Money From Repossessed Property: How To Profit At Property Auctions
- Look for ways you can add value. That is, make the property worth more other than just by renovating it. Good ways of doing this can be by: Adding an extra bedroom, for example turning a two bed property into a three bed one. Adding an extension, for example turning a small house into a family house. Turning a commercial property into a residential one. Turning a large house into flats. (Check out what planning permission might be needed first.)
- Get lots of quotes for the work. Quotes can vary by hundreds or even thousands of pounds for the same work so shop around with different builders and tradesmen for the best rates. Also – compare the cost of having a builder supply materials and labour versus hiring labour and buying materials separately.
- Take expert advice, wherever you need it. If you’re unsure about something don’t be afraid to take advice from a surveyor, architect or planning consultant – together with expert financial advice. These experts often know the best ways to save and make money on a project.
- Manage your budget carefully. It’s very easy to get carried away when renovating a property. So set a budget and keep to it. Record every item of expenditure in a spreadsheet and keep a running total.
Tip. Specify fittings and materials that are in keeping with the likely value of the finished property. For example, using luxury fittings in an economy property in a budget area probably won’t make it worth any more.
- When it comes to selling, present your property professionally. New and newly renovated properties can sell at a price premium. But take in some tips by visiting show homes on new developments …. since these are the kinds of properties your newly renovated property will be in competition with. Buyers are sold on ready to move into properties, and well presented kitchens and bathrooms can make all the difference.
And most importantly: Work out accurate ‘before’ and ‘after’ valuations on your property BEFORE you even buy it. Base your ‘after’ valuation on the actual recent selling prices of similar properties in the same area …. rather than just asking prices, which can be unreliable. This way you’ll have a pretty good of what sort of profit is possible BEFORE you even start any work.