In today’s market it’s getting harder and harder to renovate a house and then sell it on quickly in order to bag a profit and then repeat the process. People just aren’t moving house as much as they used to, so it’s important to get every last penny of potential profit out of each property you flip.
If you create a home that you would enjoy living in yourself, the chances are that any potential buyers will be happy to live there too.unless you have budgetary restrictions, the biggest challenge can often be to decide what you want to do with the property in order to maximise profit and appeal.
Look for a Bad House on a Good Street
In order to really maximise your potential profit, you need to find a run down property on a street where the average house value leaves you a good margin for profit. The trick is to buy your run down investment property at the lowest possible price, the less you pay, the bigger the margin becomes.
Since the current condition of your investment property will have most potential buyers running for the hills, it’s likely that you will be bidding against other property renovators rather than people looking to buy a family home. If you can find an opportunity that nobody else has spotted, you should be able to secure the property for a great price, increasing your potential profit. Try to buy the worst house you can find, on the best street that your budget will permit.
Don’t Over Invest
Always bear in mind that buyers who are looking to spend £450k on a property do not want to live on a street where all the other properties are worth less than half that amount. Whilst its important to make your house desirable, don’t go overboard with development. Aim to bring your properties value in line with the higher margin of comparable properties on the same street.
Look for neighbouring properties that have already been extended, if the planning department granted your neighbours planning permission, you should have no problems gaining approval for a similar development.
Make Sure Your Development Adds Value
If you are planning on adding more bedrooms to a property, it’s worth bearing in mind that five is the magic number. Once a property has five bedrooms, adding more will only result in a negligible increase in value, and your development budget could be better spent on other improvements that offer a better return on investment.
Achieve the best Possible Finish
Low quality finishes can make a home difficult to sell, especially in markets where the property is competing against other homes that have been renovated to the highest specifications. If you are not 100% confident that you can tackle the job yourself and achieve the best possible result, get a professional to do the job for you.
Badly tiled surface or wonky kitchen cabinets are a huge turn-off for potential buyers. Once you see one example of poorly executed DIY in a property, it’s easy to let your imagination run wild and start wondering what other DIY bodges are lurking beneath the surface.
Electrics & Gas
Unless you are a fully trained and certified competent person, you should never undertake any electrical or gas related jobs yourself. Electrical and gas work needs to be tested and certified in line with current legislation. If your property needs to be rewired, contact a certified company like EJS Electrical to avoid any nasty surprises when the property is surveyed.