Key Facts

  • Homeowners who are renovating properties need to decide if they are fixing it up for their own personal use or to sell it at a profit.
  • Renovating homes can often cost more than homeowners anticipate, making it a calculated gamble.
  • Hidden value items such as central air conditioning, luxury tiles, plush carpets, and double glazing do not always increase the sale price.
  • Landscaping, both inside and outside of the property, is crucial for those looking to sell at a premium.
  • Minor upgrades can make a significant difference when it comes to selling.
  • The right property, location, and buying price are key to making a profit on a renovation.
  • Renovating homes with potential to create additional bedrooms without needing a building consent is best for investment.
  • Homes in poor condition, excluding those made from plaster or weatherside cladding, are typically good candidates for renovation.

Article Summary

When looking to renovate homes as an investment, homeowners need to carefully consider their objectives. Experts agree that while successful ‘flipping’ (buying, renovating and selling for profit) can yield significant returns, it is largely a calculated risk, often involving cost overruns and surprises. Apart from the choices of doubtful resale value additions, homeowners also make a mistake of neglecting exterior enhancements, which are crucial for establishing a positive first impression.

Aside from major renovations, minor upgrades to key areas of a house, including kitchens and bathrooms, can also significantly increase the property’s appeal without massively inflating budget or risking overcapitalisation. For those looking to make a quick-profit by flipping, buying properties in bad condition, provided they don’t have major structural issues, is often a strategy as these tend to command lower prices and therefore increase profit margins after renovation.

Successful renovation efforts also require purchasing the right properties; location, buying price and potential for refurbishment are all crucial. Simm, a former real estate agent, emphasises the appeal of properties that can be opened up to create additional bedrooms without the need for building consent, as they can greatly boost the property’s value post-renovation. However, homeowners are advised not to neglect potential hidden costs, as renovation budgets often shatter due to unanticipated issues.

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