Categorized | Renovating Real Estate

Renovation Budget for Real Estate Investment

It is common sense to think that if you fix up your place, maybe add a little more counter space in the kitchen or maybe another bathroom, you’ll be able to sell your home for more than you bought it for. And in most cases, you would be right. But in a recent study done by Remodeling Magazine, there are some renovations that can actually cost you money and hurt the value of your house.

When investing in property, if your goal is to make a profit you have to take into account what kind of profit you want to make. Some people will say that it is easy to make a profit, if by profit you mean a small one. Buying a house cheap, and doing the minimum necessary to renovate it, may well see you make some money on the deal because you have taken a house in disrepair and sold it in a liveable condition. However, there is always the danger that you will find more that is wrong with the house the longer you start working on it.

Renovation Budget for Real Estate Investment

You have to have a strategy when it comes to renovating a house, because without being firm and decisive you will allow far too much slippage when making decisions, and it is this slippage that can turn a likely profit into a loss. Instead of taking an overly flexible strategy, you need to have a plan when deciding what you will do. Sticking to your philosophy – up to a certain point, anyway – is important because if you fail to stick to your plan, you will be hesitant in making crucial decisions.

Be careful when you try to get too trendy when you go to remodel. An extremely important point to remember is that while you may think a special touch is cool and fashionable, the people coming to look at your house may not think so. And while most remodel touches can be changed, you may have a hard time talking a prospective buyer into that. If you are not completely sure that the house you’re living in isn’t going to be the house you die in, try to make any remodeling touches neutral so that if the time comes to sell, you won’t regret what you did.

Equally, though, you need to be ready to spend money to make money. Being conservative and unbending as regards your budget could see you not reaching a decent price on the sale of any renovated property.

Have a budget you would like to stay within, and a slightly higher “contingency budget” which allows for potential mishaps along the way – by doing this you will increase potential profit.

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