Selecting the right property to renovate

One of the biggest mistakes renovators make is failing to consider the needs and wants of their prospective tenants or buyers. There is no doubt that this year’s auction results on reality TV show The Block were as high as they were due to the renovators accurately considering the needs and desires of their ultimate buyers.

Nor is it surprising that the results coincided with the show incorporating buyer’s agents into their judging and coaching panel of experts for the first time. When renovating for profit you must create a property that tenants want to rent and buyers want to buy. You have to begin with the end in mind.

Too many people wrongly think renovating is just about marble finishes, soft lighting and designer furnishings.  You can do a first class renovation but if the property backs onto a rail line you’ll have trouble renting and selling it. That’s why property selection is so critical.

Here are five tips for selecting the right property to renovate:

AVOID PROPERTIES WITH STRUCTURAL DEFECTS - In general I advise people to avoid properties that need structural work. You want to spend your money on renovation improvements that tenants and buyers can see because that’s how you add value.  Never be tempted to forgo an inspection report to save money as there can be many problems with any home that the average person probably won’t notice.

OFF STREET PARKING - Off street parking is something most people want and it’s great to have. But again pick your market. Not having a car park in an inner-city Paddington terrace house, won’t be too much of a handicap because it’s the norm and that’s what buyers and tenants expect. Where you can get into trouble is having a property with no off street parking in a suburb where most have it and where the target market expects it.

UNIQUENESS - It helps if your investment property is unique in a positive way. If your property has desirable features which makes it stand out from others, people will be willing to pay a premium to rent or buy it.

PROPERTIES THAT MEET MARKET DEMAND - To maximise your return you must create a property that tenants want to rent and buyers want to buy within budget. That’s the golden rule of renovating if you want to make a profit. It’s of paramount importance to research your target tenants or buyers for the suburb and to renovate your property accordingly.

GOOD FLOOR PLAN - After location, the floor plan is one of the most important selling points of a property so renovators need to pay careful consideration to floor plans. A good floor plan is practical and functional. It allows an efficient flow of traffic through the property and it maximises natural light and takes advantage of the best outlooks.