Reno tips: Spend smart and make the most of your profits
There are a number of areas that investors should avoid if they want to see the greatest return on an investment.
Re-wiring, which can cost up to $15,000 and branded appliances, that can also be excessive in value, are areas that investors who are looking to sell a property for a profit should be wary of spending in.
Investors can reduce their costs without reducing the quality of their products by shopping around for significant discounts.
“Where people can easily spend less is on some of the actual items. With tiles and carpets and all the door handles in the bathroom, if you’re prepared to go through auction houses or shop online, or those types of things, you can make a good saving,” Urban Sensations renovator and founder Rosalie Griffiths explains.
“If you buy a carpet at an auction house you’re looking at paying a third of the price than if you went to a normal shop.”
Properly finishing the rooms is also of high importance and should not be overlooked. “Buyers are very astute,” WBP Property Group’s Wesley Inkster explains.
“If they see a painted particle board bench top they’ll think, ‘They must have run out of money’ and it lowers the perception of the whole house. They start to look for other things that you didn’t quite do properly.”
Common mistakes, such as using touch-up paint instead of re-painting the whole wall, cause extra avoidable costs to add up.
“With touch up paint you always notice the touch up. It’s a fallacy that you can touch up. You’ll have to repaint the walls again, you can do it in a couple of hours in the first place,” Renovating for Profit’s Cherie Barber explains.
The quality of the labour should not be compromised when it comes to making the property presentable. DIYers should be sure to know their own ability.
Ms Griffiths explains that the quality of the products themselves can be entirely negated by poor installation and lack of care.
“You could even spend $200 per sqm on tiles but if the person who does the tiling doesn’t know what they are doing you will lose that effect because of the poor workmanship.
“The classic mistake that unnecessarily costs people money is when they haven’t measured up properly to start with. They will then go and buy something that doesn’t fit in the space. That can be a costly exercise in both time and money,” she says.
Spending a bit extra where it counts can even be the solution to getting the most from a lower budget.
Ms Barber explains that some “big ticket” items can be lucrative (for instance, cement render on an average red brick three-bed house can cost $6,000 and return $20,000) however they should generally be avoided unless you can rely on a good return.
Investors would be wise to avoid deviating from their initial list to ensure the most important improvements are made.
If something can be made presentable for a much cheaper price tag than replacement, this is most likely the profitable option.
“With a driveway that’s a bit all over the place, I would accept that it’s not perfect and I would paving paint it as concreting is very expensive,” Ms Barber explains.
This line of thought applies to much of renovation, she says.