After having done all of the fundamental research and preparation, you’re ready to start shopping for the right property. This is where it gets really exciting. You have to keep your wits about you, as property selection is critical. When you take your researcher’s hat
There is a major difference between kit homes and turnkey homes. Kit homes are built by an owner builder, one who wishes to build their own home. Whereas turnkey homes are built by professionals, so that the client does not need to be involved with
After having done all of the necessary research, you’re ready to begin shopping for the right place.
This is when things get really exciting. You must keep your wits about you, as choosing a property is critical.
When you get to this stage, what you’re looking for is potential for renovation.
You need to assess each property not only on what it is right now, but what it could be once you’ve renovated it.
The first consideration is the state of the property. You’re searching for something rundown, but notutterly derelict (unless you really love a challenge)!Then you will think about the needs and wants of the local market, and whether the property will meet them with your improvements.
Finally, you need to consider how far you can take the property.
Some properties just need a quick fix-up to make you a decent profit.
Other properties can be totally transformed, taking them to a far superior state and unlocking better profits.
Roughly speaking, there are three types of properties that attract renovators:The ‘Patch ‘n’ Paint’ is a solid property, in good condition structurally but the decor is faded.
It needs fresh paint, carpet, fittings and fixtures, and the garden needs a tidy up.
The ‘Fixer-Upper’ will generally be older and rougher than the Patch ‘n’ Paint.
The decor needs attention, but it also needs a kitchen and bathroom makeover.
The problem child has some structural problems.
It might have cracks in the walls or need a new roof. Possibly the wiring or plumbing is uselss and needs replacing. These issues can be costly to repair but don’t necessarily return any value.
The ‘Knock-Down’ says it all, requiring a top to bottom restoration or demolition. These properties often catch the eye of developers, particularly if they’re in a good location, on a large block or have fantastic views. From my experience, the best bets to renovate for profit are the ‘Patch ‘n’ Paint’ and the ‘Fixer-Upper’.
The type of renovation work you should attempt depends on your knowledge, skills, experience and contacts, but the average person are able to do up these kinds of properties without too much trouble.
Plus, they tend not to have a high level of risk.
Dealing with structural defectsIn general, I advise people to avoid properties that need serious structural work.
It’s best to spend your renovation budget on improvements that buyers and tenants can see as that’s how you get results.
Spending money on fixing defects that are not seen eats into your renovation budget and you may not see a buyer who appreciates quality for some time, therefore your profits will be reduced.
Basically, tenants and buyers expect a property to have good foundations, wiring and plumbing. They won’t pay extra for it, so the extra expenditure to fix the defect doesn’t add any value.
If you do want to make an offer on a property with structural defects you must get a quote to find out how much it will cost to rectify the problems so you can factor that into the purchase price.
If the numbers still stack up then go for it. Plus, you can usually negotiate hard because most other will be scared off by the “problems”.
Don’t skimp on inspection reportsMany property investors are tempted to save a few bucks by foregoing inspection reports when buying a property.
Don’t be tempted! Termite infestations, dodgy wiring, rotten foundations. There are many potential problems with any building that the average person won’t notice.
Any one of these problems could cost you big bucks. You wouldn’t buy a second-hand car for $10,000 without a $250 inspection report, so why purchase a property for several hundred thousand dollars without an inspection report for a a little more? For your peace of mind get the inspections done. For building inspections brisbane, contact Home Inspect today or visit their web site.
Meeting market demandLet’s forget about property for a minute and think about people, because despite what most renovation newbies think, renovating for profit is a people business, not a property business.
That’s because the tenants or buyers of your renovated property are the source of your money -from either the rent you receive or what you make when it’s sold, so to maximise your return you must develop a property that tenants will rent and buyers want to buy.
This is the golden rule if you want to profit from renovating houses.
If you intend to hold onto the property then you need to research your target tenants for the suburb.
When you match a property to target tenants you’re not going to have vacancies, or need to make a reduction in therent just to get someone in.
Build a good relationship with property managers and find out what type of properties are most wanted in the area. Tell them you’re looking at buying an investment property in the area, and ask them what tenants prefer.
What sort of property is needed? What kind rents the quickest?In this suburb do tenants prefer houses or apartments? Do they want one, two, or more bedrooms? Do they require parking or not? You should know these basics so you can make an informed decision about what to buy.
If you intend to sell the property once you’ve renovated it, the same principle applies but now you must consider the wants and needs of buyers rather than tenants.
While there are some similarities, there are differences you should cater for.
Finally, although there will be some features of the property you can improve, some features, such as the location and aspect, etc, are fixed.
You can do a first class renovation, but if the property backs onto a railway line you can expect to trouble renting and selling it.
That’s why property selection is so critical. After all, you can always improve a house, but you can’t improve its location.
There is a major difference between kit homes and turnkey homes. Kit homes are built by an owner builder, one who wishes to build their own home. Whereas turnkey homes are built by professionals, so that the client does not need to be involved with the hundreds of steps and processes involved with building a new home. ”Turnkey” simply means that you, the client, can go to your brand new home, walk up to the beautiful front door and simply turn the key!
The process to become an owner builder is much more complicated than one might think. For instance, it’s a requirement of the Building Services Authority (BSA) that anyone who wishes to build or renovate their own home and spend over $11,000 must hold an owner builder permit, and these permits are only issued by the Building Services Authority once you’ve completed an owner builder course. The permits expire every 6 years.
Here are a few of the processes involved with building your own kit home; legal requirements, site preparation, footings and floors, wall construction, roof construction, windows and frames, doors, screens, wall finishes, ceilings, fixtures, plumbing, gas, electrical, draining, and then some landscaping to top it all off.
If you don’t have experience in all of these areas, building your own kit home could prove to be more challenging than you may think, especially tackling all the council codes, regulations and legal requirements!
We at Bush and Beach Home Builders are professionals at building sustainable homes. We know how stressful and overwhelming the process of building your own home can be, so let us do it for you! If you think assembling a piece of furniture is irritating, building a kit home is a hundred times more complicated. Instead, let us do the work for you so that all you have to do is turn the key and enjoy your unique, climate engineered Bush and Beach home.