The property market has always been an alluring one for those with entrepreneurial aspirations. If you enjoy DIY and working with your hands, renovating a home can be an enjoyable and challenging undertaking. And having heard the tales of self-made millionaires and families who have inherited properties and flipped them for enormous profits, who could help but be enticed by the prospect of selling one home to move into a dream property.
But while making money from your home renovations is certainly achievable, is it a realistic money-making venture for everybody? Or does it require a specific set of skills and knowledge? The truth actually lies somewhere in the middle. While it is definitely helpful to have experience with DIY, and home renovations specifically, as long as you prepare yourself properly, home renovations can be a great way of making money and potentially starting you down a new career path.
Here’s what you need to know before you begin.
Location Matters A Lot
The location of your property will have a very big impact on how much you can expect to sell it for. Regardless of how good the work ends up being, if the property isn’t located in an area where people will want to buy property, you will struggle to sell it. You should factor in the average value of a house in your location when you are working out the extent of the work that you are going to commission.
This doesn’t mean that you need to buy a house in a particularly upmarket area in order to consider it for renovations, but it will definitely help if you are working in a prime real estate location. As with every other decision you need to make with your home renovations, you will need to strike a balance between the amount of money that you are going to invest and the amount of money you can expect to make from it.
You Can Find Cheap Properties at Auction
Those who have a lot of experience with using home renovations to make money will generally recommend that you keep an eye on the auction houses and look out for foreclosures and other properties that are available at an absurdly good value. An auction is rarely anyone’s first choice for selling their property, so most of the houses available at auction are ones whose owners are desperate to get rid of them. This makes auctions a reliable source of relatively cheap properties.
Set Yourself a Budget
The one thing that you don’t want to happen when you are renovating a property for a profit is to end up spending more on the renovations than you can ever hope to make back from selling the property. In order to ensure this doesn’t happen, you will need to make sure that you very carefully cost everything before you do it.
Once you have set yourself a budget, you need to then make sure that you stick to it. This will require you to be meticulous as you progress through the project. It can quickly become difficult to keep track of all your expenses so make sure that you’re keeping on top of it.
Factor in Administrative Fees
As well as the costs of the renovations themselves, you also need to consider the costs of securing all the permits, licenses and other administrative paperwork that you need. If you fail to take these costs into account, they can sneak up on you and end up tipping your budget into the red.
Use Professional Services
While many people will want to do as much of the work as they can for themselves, you should also know when to call in a professional workman. A trained professional will be able to tackle the larger and more complex jobs throughout the property. For example, if you haven’t tackled roofing before then you should consider whether the cost of hiring a professional is worth it in comparison to the costs of fixing any errors you might make in the work. Take some time to search “roofers near me” online and compare some prices and reviews, too.
Hiring professionals will also allow you to dream bigger and commission renovations that you wouldn’t be able to tackle on your own. Just make sure that you factor into your budget how much value you expect the work to add so you can decide if it’s a worthwhile investment or not.
With the right preparation and attitude, anyone can consider renovating and flipping a home to make some money. Make sure that you are very careful about your budgeting and that you work out how you will make your money back before you put any down.