Are you ready to get your hands dirty but not sure where to start?
Do you have a renovation vision but not sure how to translate that to dollars?
Is the thought of calculating making your head spin?
One of the most important steps is finding your buyers. Why? Because once you know who you’re selling to, you can design a product that fits them.
In this case it’s your renovation project.
It’s pretty obvious from all those renovation shows on TV that a good renovation can reap some serious benefits.
But the idea with parting with a big chunk of your budget can be pretty scary at first. Especially if you haven’t got a clue about how much it’s all really going to cost.
Before you run away, I have some good news. It’s possible and actually fairly straight forward to work out the cost of your renovations without losing your marbles. I have a whole bunch of checklists and resources in my Rapid Renovation Formula that you can keep on hand when doing your budget calculations to make sure that you don’t miss anything. They’re also super handy to pull out once you’re actually doing the renovations, so that you can make sure you are on track.
But before I freak you out with the million different things you should consider, there are three main ones you should look at that will help get the ball rolling.
Listen below on Reno Radio for the details of the three strategies or keep reading for the recap!
1. Is there anything that needs serious attention?
I’m not talking about that hideous lime green wall paint or the frilly curtains in the bedrooms. Yes, it might be a sight for sore eyes, but it can wait (plus it’s an easy fix).
I’m also not talking about the ten pillars under the house that are about to collapse at any minute. Unless the rest of the house has some unbelievable potential, I would suggest you avoid this time of place that will suck your budget dry before you even start on those lime green walls.
Remember, there’s no point in getting a place that eat up your budget. If you have only set aside enough for a kitchen renovation and wall paint, look for another project that fits the bill.
Otherwise you’ll end up doing half a renovation and it will impact your end profit.
If you have done your research and the house that you want to renovate is perfect for your goals, then it might be worth buying it as long as it doesn’t over-extend your budget.
Just be sure you fix up the rusting gutters or replace the termite damaged wooden beams first before you sell. And when you do, watch as your potential buyers jump over each other to buy the finished project.
2. Are you going to do structural or just cosmetic renovations?
The easiest way to figure out an estimate of your renovation costs is to break down your renovation into either structural or cosmetic.
There are two main types of renovations that you can do.
You can either do the simple airbrush – low risk like a simple paint job or floor polish – or the more dramatic nose job – bigger changes like a new bathroom or extension.
Obviously, the bigger changes also mean more risk and more time, because it involves some serious structural work. But they can also mean a bigger pay cheque at the end of the day.
You’ve found your ideal project. It’s perfect. You can already see you target market jumping for it at auction day. Especially when you knock down the wall in the kitchen and install that beautiful French provincial kitchen. Those kids are going to love the new entertainment area you’ll be adding too.
Knocking down walls will automatically put this type of renovation in the structural column.
If you’re not actually going to replace the kitchen cupboards but are just going to paint over them, then that one would go in your cosmetic column.
This way you can see from the get go whether most of your work will be structural or cosmetic, and you will be able to get a rough idea of costs.
But if you have a long list in your structural column, it might be a little trickier to take a good stab at the costs because of the nature of the beast.
Structural works can sometimes get complicated. For these types of works you would almost always have a professional tradie carrying them out. And until they have had a good look at the work and assessed it, it can be hard to see below the surface and know exactly how much money and time will go into them.
And last, but not least:
3. What is the level of finish you are aiming for?
Okay, so this is where putting yourself in your target market’s shoes comes in handy.
If you’re going full steam ahead with that French provincial kitchen, there are certain things you have to keep in mind.
The kitchen is definitely one of the best areas where you can add value to a house. You’ve already thought of adding heaps of cupboard and bench space. And who can resist that beautiful provincial style?
Just remember to always keep your target market in mind.
If the house is on the smaller end, it might not be worth your budget to rip out the kitchen, knock down a wall and throw $50,000 on a top of the line design.
Your expectations might fall flat if the kitchen is way better than the rest of the house.
Same thing goes if you have a 5-bedroom house just screaming for a large French provincial kitchen and you choose to skimp on costs and paint over the existing tiny one. Sure, it’s been renovated, but what do your potential buyers expect when they enter just a big house? Probably a nice big kitchen to go along with it.
So there you have it, three steps to consider when working out your renovation costs. Stick to these and the rest of the checklist found in my Rapid Renovation Formula, and you’ll be renovating for wealth in no time.