It is never risk free to renovate a home or investment property. In fact, you might tear down an old ceiling and find things like termites or plumbing leaks. This is hard on your budget and home equity. Here are a few things you can do to reduce risk:
• Consider the location of the property
Rarity, scarceness and low supply add or subtract the value of a home. It will can maintain or increase when demand is more than the supply too. You’ll want to chose a property to renovate that is in a place everyone wants.
• Everyone wants to feel unique
Unlike stocks and shares, houses each have unique quirks, qualities and features from other homes. Even with the same floor plan, people want to feel unique.
Unique qualities can make a buyer is be willing to pay that little bit more for a house than one that is like everyone else’s home.
Not all suburbs are the same. The surrounding including: streetscape, facilities, transport, shops and school qualities will be different. If you’re choosing a home to renovate, pick one with all of the above to maintain the home’s value.
Being close to good schools, quality medical care, good shopping, etc. will always be worth more than those miles from the nearest shop a long drive to a good school.
Selecting one to renovate in an area of the suburbs close to those things that isn’t built but planned will improve in value around the time of the announcement. Buying a home then, renovating, and selling when the planned project is finished, will allow you a profit, because value will increase even more.
• Make sure to renovate correctly
A falling housing market is seldom the right time to renovate to add value. Most experts say to hold on to your renovation money unless you really need to create more space and the building costs are cheaper. Improving to “go green” and lower home’s energy usage is a good move. Federal Government is encouraging us all to do it.
Highly personal renovations like “dream” kitchens, swimming pools or home theatres may sometimes detract from a home’s price. Not all buyers share your tastes. A new owner may see your huge kitchen is a waste of space if they don’t cook.
• Buy and sell in market cycles
The top end of the property market is suffering now more than the lower end. This is due to low interest rates and first home buyer grants.
Some real estate predictions see the price falls of up to 40 % that have occurred in the United States or Britain. Other experts say that some capital cities could have stagnant property prices. This means they value decreases in real terms.
Every property will respond differently to market cycles. You can’t do much once you own your home and the cycles change. Wait until the cycle swings back to stability and any value drop shouldn’t matter to do your renovation. Renovating a new home and selling the old one in the same market cycle should deliver the same bottom.
For more information and to get access to our free video series on finding, renovating and selling check out: http://www.FindRenovateSell.com.au
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