Have you been watching The Block for too long and want to have a crack at buying a property to renovate?
Aside from being able to find a property you can afford, Three Birds Renovations gave some hot tips to realestate.com.au on choosing the right property for a reno job.
Find the right suburb
According to the team at Three Birds Renovations, if you buy in the wrong suburb you could waste your money before you even begin.
They say you need to buy in a suburb that has ‘price disparity’, which means there is a wide range of price points for similar properties.
To work this out you’ll need to research prices in the area and compare the amount un-renovated houses are selling for to how much renovated houses are selling for.
If the suburb has good price disparity the properties that are renovated in the suburb will be selling for around 30 per cent more than those that are un-renovated in the same suburb.
Find the right house
Pick the right house by working out what sort of house would appeal to the main demographic in the area.
If it’s a family area with lots of people bringing up kids you’re best making sure the house would be suitable as a family home for example.
Houses that can be renovated without making huge extensions like a second story are obviously easier and cheaper to renovate.
The most common successful renos are of the older style floorplans with lots of little closed-off rooms in them. The walls can be knocked down inside to create open-plan areas inside while making cosmetic changes to the outside at the same time. Throw in an outdoor alfresco area out the back and you’re looking good.
Find the right price
When buying a property for a renovation it can be important not to over spend or the exercise will be financially pointless.
Making a profit will largely depend on making sure you buy the property on a budget that you can afford.
To work out estimated profit you need to add up the purchase price, renovation budget and other costs like fees and taxes and subtract that from the selling price.
It will basically mean when looking at a property for sale, there will be a point at which you can afford to buy to make the renovation profitable, and a point you’ll need to walk away and that line will need to be adhered to.