If you are renovating to sell, there are three key things you should avoid:
1. Over-capitalising (spending more than you stand to gain in the sale).
2. Not finishing the renovation and selling it half done.
3. Blowing the budget.
There’s no question that a beautifully renovated house that creates an emotional connection with buyers can help you secure the best price. But present a half-finished renovation because you’ve run out of money and you will reduce your chances of making top dollar because prospective buyers will look beyond what’s been done and only see how much work they’d have to do to finish it. Often it would have been better not to start renovating at all. This situation is particularly problematic for owners who end up needing to sell quickly because of how much they’ve spent on a half-finished project.
The number one reason renovations are stopped halfway through is inadequate planning. Without a proper plan, it’s far too easy to blow the budget.
Here are 3 tips to prevent you from blowing your budget when renovating to sell.
1. Start with a plan
Starting a renovation without a plan will lead you to spend more than anticipated. Renovators often estimate costs too broadly, or focus on the big-ticket items while overlooking the minute details and functional aspects of a renovation, such as plumbing and wiring.
Break down the costs of every aspect of a renovation, room-by-room, item-by-item.
2. Know what to scrimp on and where you can afford to splurge a little
A common mistake for people who renovate to sell is over-capitalisation. Take the time to research what the market value of your home should be on completion compared to what it is before you start. A good real estate agent will tell you how best to spend your renovation dollars.
3. Set aside some money for contingencies
Unexpected costs are an unavoidable part of the renovation process and should be planned for in the budget. Who knows what hidden damage you may find, like wiring or decking boards that need replacing, etc. etc.
It’s also important to understand exactly what is and isn’t included in tradespeople’s quotes to avoid nasty surprises.
It’s a good idea to set aside at least 10% of the total budget to cover unexpected costs.
Contact us if you’d like some independent, honest and totally obligation-free advice
on what it would be worth spending money on in your home in order to achieve a better price when you sell.