10 Steps to a great renovation result

The plethora of house makeover programmes on television over the past few years may be fun to watch, but they cater to families renovating their own home. They presume you have an (almost) unlimited budget for the renovation, a personal designer and a crew of 20 people to help you get it finished in one weekend!

As property investors however, our primary aim when renovating is (or should be) the consideration of what it costs us versus what we can sell/rent/revalue the property for… ie avoiding over-capitalising.

When investors renovate property themselves, they tend not to spend money on a designer. However, getting professional advice (or at least following the pointers below) will increase your chances of making a profit.

STEP ONE: Get your mindset right. This renovation is not your own home and you do not have to live there. Consider your likely buyers or tenants and keep them in mind the whole time. Put away the pretty glossy magazines and get down to business!

STEP TWO: Make a list of every single element in each room. For example in a kitchen you would itemise: cabinetry carcass, doors, handles, kick-strip, bench-top, sink, tap, splashback, lighting, power points, flooring, window treatments etc… On the house exterior, you would consider: the main part of the house, the base, window frames, trim, soffit, roof, the pathway, fences, gates, letterbox, etc…

STEP THREE: Decide whether each element fits their purpose. This is a different consideration to whether or not you like them as you see them in the scheme of the whole area or room at the moment. Look at the elements completely independently of one another. Are they in good condition? If they weren’t adjacent to the things they are adjacent to now (instead, for example, in a more modern setting) would they look alright? Assess whether you could keep the item or whether it needs to be changed in some way.

STEP FOUR: For each of the elements that you have decided needs changing in some way; consider whether you’ll Renovate, Replace, Remove or Repair. Take the perspective “what is going to cost me the least and give me the most?” Consider the 80/20 rule. What can I invest 20% on for 80% return? You’re not looking for a perfect, 100% result – but you are looking for 80%. This is the ‘trick’ to renovating for profit.

STEP FIVE: Taking into consideration the end user for this property (a renter or a purchaser), decide how you are going to make your improvements. If your end user is a home buyer in a nice suburb, then your choices will be different to if it’s a renter in a lower socio-economic suburb. You must always keep the end user in mind, but make sure you still keep the design simple. Any property renovated for profit should be done so as neutrally as possible. Give the buyer or tenant a blank canvas on which they can add their own flare – and remember your idea of style and their idea of style is potentially very different!

STEP SIX: Try to visualise the change you have decided to implement. If you were to make only that change, would it make enough of a difference? Often we need to make non-essential – but worth the money - changes so that the space is more aesthetically pleasing. A good way to train yourself to visualise is by looking at lots of product brochures and magazines. Also really take notice of the different elements in the places you go – friends’ houses, open homes, the internet (try our website - http://www.hotspaceconsultants.com) etc… you can steal ideas from them for future use in your own renovations. Consider even keeping an ‘inspiration’ folder of photos and pictures to remind you of all the options you have.

STEP SEVEN: Price the work before you start. Get written quotes and only give the contractors the go ahead once you have all your pricing together. Always include a contingency. If you are project managing the job yourself, be sure to ask each contractor lots of questions to make sure you include all costing up front. Ask the contractor what other things will affect their work? E.g. your electrician may point out that he will need to make a few holes in a wall – in which case you need your builder to know that so he can include in his price. If you can, use a project manager. You will probably save yourself some costly mistakes.

STEP EIGHT: Tell a little white lie to the contractors or project manager about the expected completion date. Keep this to yourself and keep the pressure on as if this date were correct. In my experience this is the most effective way of having a project finish on time – trouble is they may just cotton on sooner or later!

STEP NINE: Visit the site briefly and frequently to resolve any issues and keep an eye on progress. Be as nice as pie to your contractors; they will be the ones to save you money if they like you!

STEP TEN: Pay your contractors on time after they have finished every last detail on your project. Jane Eyles-Bennett is the director of Hotspace Consultants. Ph 0411 70 5556. http://www.hotspaceconsultants.com