Renovating for profit is an amazingly creative and satisfying thing to do.
But you need to follow a few basic rules in order to make a profit. I want to share with you one of the biggest mistakes people make when renovating.
The biggest mistake is actually not understanding who you’re renovating for, not understanding your buyer. And the way you understand your buyer is through your research process. So we spend a lot of time getting that data so we can understand what their wants and needs are. And also, the things that they don’t like because if you don’t understand your buyer, firstly, you will do what you think your buyer likes. You will also spend money on things that doesn’t need to be spent. So in order to deliver the right renovation and spend the right amount of money, you need to have intimate detail about what your buyer wants and needs and plan your renovation accordingly.
So who is your “Renovation Avatar“?
The baby boomer generation is downsizing at a rate we have never seen before. They are selling their homes as the nest is empty and the 3 bedroom home is no longer required.
Biggest Mistakes: Over priced properties, too many stairs, styling with too much furniture, high strata levies.
Your typical nuclear family now has older parents with more of a disposable income than the baby boomers ever had. When renovating for this avatar you have to be very careful with location and school catchments.
Biggest Mistakes: Removing the bath from the bathroom, small laundry, limited outdoor area, lack of storage.
This market is your fast paced super career driven individual. Usually single and no children with a very high disposable income.
Biggest Mistakes: Over-Capitalising in the kitchen area, cheap finishes, poor proximity to CBD.
Here is a market you want to impress and mistakes with this avatar will reduce your market size. Let’s all remember that this is a supply and demand market, so if you don’t have the essentials you won’t recover your renovation costs.
Biggest Mistakes: Cheap appliances, poor entertaining space, cheap finishes, cheap styling. I would not recommend Kmart Styling hacks with this avatar.
I hope this reminds you how important the research phase truly is and you ask the right questions when buying your property.
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