BUYING TO RENOVATE AND SELL
- Written by Melanie Toye, February 13, 2014
Have you watched the latest renovation TV shows? Or been keeping up to date on the building and renovating homes magazines?
Your enthusiasm to take on this new challenging project in your life, is ready to burst. Your plan for success and freedom is to buy a property, do it up and sell it for hopefully a much higher price.
Here are some tips on what to look for when buying a property to renovate and resell:
Location, location, location.
The reason renovators do so well, is when they buy a property in a location that is close in proximity to the city, schools, parks, shopping centres and the like.
Do not just buy the cheapest house in the cheapest suburb. It will take longer to sell and you will have less of a chance for a higher profit margin. However this does not mean you have to spend a fortune to make a fortune, you just need to be savvy in how you find these properties.
Or, talk with the real estate agent that is the most seen in the suburb you are looking in. Tell them what you want and they will call you as soon as they find something.
Know the property
You need to ask as many questions to the real estate agents, neighbours and online articles regarding the history of the location and the house. If you pull down a wall and discover asbestos, you could end up shelling out a tonne more money to help fix the problem.
It also helps to know the previous sales of the property which you can source from RB Data. Plus look at all properties for sale in the area to compare the value.
Before you buy, know how to negotiate.
You want the best deal you can get and knowing how a sales negotiation works, gives you a greater chance of getting that great deal. If you want someone else to do the negotiation for you, you can ask another real estate agent (from a separate firm) to step in for you. You do not have to pay them, they will score part of the agreed upon commission with the seller's agent. Be firm from the beginning on how you far you will go, yet be sure not to disclose this to the seller's real estate agent.
Plan for the renovation
While settlement is waiting, be sure to begin your plan for the renovation. Ask the real estate agent to view the property and take in a tape measure and measure all rooms from floor to ceilings and doorways. Create a workbook of sketches or designs or even cut outs of pictures of ideas for each room. Contact who you want to help you, with a clear deadline and source quotes and timeframes and start dates. Then once you the keys are handed over to you, call everyone to say you are ready to begin.
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