Why some renovation projects make money and some don’t
“Hello and welcome back to daily buying tips, I’m Dean Berman from Berman Buys.
Today were going to talk about why some renovation projects make money and some don’t.
There’s a variety of factors which I believe causes a renovation project to add value.
Possibly the most important factor, is what you pay for the property at the start.
If you spend well above what the property is worth, then it will be harder in my opinion to make money from the renovation within a short timeframe.
You’ll be trying to re-trace your steps.
Only to find it’s really hard to skimp on the quality as it will usually show in the end.
The second factor is time.
The longer a property is usually held, the easier it is too make money from a renovation due to time and likely market movements.
Think about it, if you had bought a property in 1995 for $500,000 and now it’s worth $1.5m, a renovation project is the cherry on top.
Paying too much for the materials and labour can damage your profit potential.
It’s very easy to get caught up emotionally in a renovation.
Remember to stay objective and realise if you are just trying to make some money, what you spend counts.
It’s a different story if you plan to occupy the property.
The final factor I believe has a bearing on how profitable a renovation is, is the uniqueness of the renovation itself.
If the property is like every other one, then it’s not that different and catching.
But when the renovation is exciting and makes the space enjoyable to live in.
Then that can truly add value.
Pisa in Italy is very famous for one thing a leaning tower.
How can you make your renovation unique?”