Property development is one of the strategies investors can do to gain more profit from their investment. One of property development strategies is doing renovation to the property.
This is expected to increase the value of the property. Lots of new generation also get more interested to renovation. After all, renovating can lead to increasing value, more appealing to tenants, and increasing the rents. However, sometimes your expectation doesn’t meet the point.
Therefore, it is important to use the right strategy in renovation so that it will pay off in the end. The better thing to happen is to make it as long-term investment.
Strategies to make sure the renovation pay off
Lots of investor doing renovation in hope to be able to sell it with increasing value. Thus, they can gain profit from it. However, you can even do better than that. You can use the strategy of buying, renovating, refinancing, and holding for the long term.
This is a smart plan for investor to grow their property business to another level while still gaining more profit. Here are things you need to know:
- Make sure that no matter what strategy you are in renovating, you follow the rule of renovating for profit. This type of property investment is highly recommended for investors. Thus, you need to make sure that you make the right purchase of the property. You need to buy property with the right price at the right location. This is to make sure that you are going to make more money when you finish the improvements. Paying too much for the property you purchase is not so wise decision. To decide the right price, you need to determine the end value of the property after the completion of renovation from the beginning.
- Always set your budget in realistic measure. You need to expect the renovation to cost more than you expect and take longer than you planned in the beginning. It is quite common for property development project to require extra budget and time than what the investor planned. What you see on TV show about how easy it is to do renovation is never true because it is never as easy as it looks.
- Another strategy is to put your foot on your expected tenant’s shoes. You need to think and consider what type pf improvement or property that will attract tenants more. Or, you can instead target certain type of tenants you want to attract. This way, you have clearer plan of what to do with the development project.
- It is also important to not let your emotion get involved in your property development plan. Undertaking renovation with your emotion and personal feeling never turns out good. Instead of pay off, the project will put your finance in jeopardy. Therefore, put aside your personal feelings and focus more on making your property livable, functional and profitable. To achieve this kind of goal, you need to use your logic instead of emotional attachments.