Property For Investment -Tips For Renovation Success

September 19, 2011

Tips & Ideas

Property bought for investment purposes often brings higher returns if it is sold after renovating.

The renovation may just be minimal and cosmetic but adds to the instant appeal of the place.

Renovation is always to upgrade a property, to give it a modern, new look, but there is a difference in renovating for living oneself and when renovations are carried out on investment property. In the latter case, the returns expected must be much more than the cost incurred, and overcapitalization never pays.

Renovating property for investment would focus mainly on painting, repairing parts that are damaged or broken, bathrooms and kitchens, perhaps changing flooring and other cosmetic changes to beautify the place.

The idea is to maximize returns with minimal expense. It is also important to know the rules for renovations, what is permissible and taking clearances beforehand is better than paying penalties later.

Tips

  • Make a list of changes needed – it is not difficult to go overboard with renovations, but the best way to go about it is to take a round of the property and make a list of what looks old, is broken or damaged and has to be replaced rather than repaired.
  • Work according to a plan- if a plan can be prepared about the renovation process, it will ave labor costs, time and money.
  • Stick to safe décor and designs- Property for investment must have general appeal. Very trendy designs and décor may not appeal to all prospective buyers. The colors selected must be neutral and muted rather than bright, since everyone may not like them. Time tested techniques are better than experiments that may not be successful.
  • Make the kitchen attractive- kitchens are important to women who often have the last word in buying property. Kitchens get a facelift when doors and cabinets are changed. A fresh coat of paint, a few new fittings and gadgets and de-cluttered look, will make it look inviting, and help to clinch the deal.
  • Bathrooms must look clean and new- Bathrooms are extremely important to buyers and a new set of fixtures with clean corners and floors will add to the appeal of the place.
  • The five percent limit- a golden rule while renovating is to not spend more than five percent of the value of the property on renovations. Going above this limit will make it a losing rather than winning proposition.
  • Do not replace what can be cleaned- While cleaning requires more effort than anything else, and many opt for changing fittings like door knobs, windows etc., but this expense can be saved by simply getting them professionally cleaned.
  • Minimize the work and avoid the headache- renovations can be very demanding, and hence must be kept at the bare minimum level.

Renovating an investment property has to be impersonal and impartial since the property will change hands soon. Hence it is better to use it as a money spinner more than a work of art with your stamp on it. 

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