5 Pros and cons for buying to renovate for profit!

When it comes to buying a property, the choice between a move-in ready home and buying to renovate for profit can be a daunting decision.

Many homebuyers find themselves enticed by the prospect of purchasing a fixer-upper, envisioning it as a blank canvas to unleash their creativity and increase its value. However, this choice of buying to renovate for profit, comes with its own set of advantages and challenges. It’s not always like the shows. We see “The Block”, and my favourite…”Fixer-Upper”, which tend to gloss over the more realistic and challenging side of renovations.

We in the process of buying and renovating some properties so I thought it may be helpful to share some pros and cons of buying a “Renovator’s Dream”.  Hopefully it will help you make a more informed decision as to whether buying to renovate for profit is something you’d like to do.

Pro’s for buying to renovate for profit!

1-Customisation and Personalisation:

One of the most significant advantages of renovating a property is the opportunity to customise it according to your taste and requirements. From choosing paint colors to selecting fixtures and layouts, you have complete control over the design, making the space truly your own.

2- Increased Property Value:

Renovations done right can significantly increase the value of your property. By investing in modern amenities, energy-efficient appliances, or stylish finishes, you not only enhance your living experience but also boost the resale value, ensuring a return on your investment.

3-Potential Cost Savings:

Properties in need of renovation are often priced lower than their move-in ready counterparts. With careful planning and budgeting, you can save money by purchasing a fixer-upper and investing in renovations, especially if you’re willing to put in some sweat equity.

4-Creative Expression:

Buying a property to renovate for profit allows you to express your creativity and experiment with various design ideas. Whether it’s an open-plan kitchen, a cozy reading nook, or a stylish bathroom, you have the freedom to bring your vision to life.

5-Sense of Accomplishment:

Successfully renovating a property can provide a profound sense of accomplishment. Watching a rundown space transform into a beautiful, functional home can be incredibly rewarding, fostering a deep sense of pride in your achievements.

Con’s for buying to renovate for profit!

1-Time-Consuming Process:

Renovations take time, often longer than anticipated. Coordinating contractors, obtaining permits, and dealing with unexpected issues can delay the project, making it challenging if you need to move in quickly.

2-Financial Uncertainty:

Renovations can be expensive, and costs can quickly escalate if unexpected problems arise. It’s essential to have a detailed budget and contingency fund to avoid financial strain during the renovation process.

3-Disruption and Inconvenience:

Living in a construction zone can be disruptive and inconvenient. Dust, noise, and limited access to certain areas of the house can create discomfort, especially if you have a family or work from home.

4-Skill and Expertise Requirement:

Some renovations require specific skills and expertise. While DIY projects can save money, complex tasks such as electrical work or structural changes are best left to professionals. Hiring skilled contractors adds to the overall cost.

5-Emotional Stress:

Renovations can be emotionally draining, especially if unexpected issues or delays occur. Managing the stress and decision-making process, while dealing with the intricacies of renovation, can be challenging for some homeowners.

Buying a property that needs renovating offers a unique opportunity for customisation, potential cost savings, and increased property value. However, it comes with challenges such as time constraints, financial uncertainty, and emotional stress. If you’re specifically looking to buy a fixer upper with the view to renovate and for profit, it’s imperative to assess your budget, timeline, and willingness to handle the renovation process.

When we buy to renovate for profit, we do an immense amount of research before putting in an offer. This includes a very thorough list of everything that needs repairing or replacing with estimated costs including our labour time. We ensure we are not over capitalising and consider the potential increase in rent or resale value that can be achieved.

If everything lines up then we create a spreadsheet with all expenses, timeframes and allow some (lots) of wriggle room. We then stick to the budget and timeline as much as we possibly can and any extra costs are thought through with the same logic to ensure the goal of making a profit is our top priority. We can’t afford to let emotions get in the way.

With careful planning, realistic expectations, and a clear vision, renovating a property can transform a dated house into a desired home that will sell well and make you a tidy profit along the way.