Renovating for profit, works well as long as you work with the ONE main rule, and you have probably heard it before, and it is:
LOCATION LOCATION LOCATION
You hear this word constantly from the real estate agents, on the DIY shows on TV, and just about anyone who has done this for a business and succeeded.
Whether you plan to flip this house, or hang onto it as a rental, either way you still need to attract the right buyers and renters. If you are not in a good area, it won't matter what great kitchen package you put in, you are not going to get top dollar or top rent.
You have to first decide on the type of market you are going to attract. In my case, I was looking for a family to rent my house. I chose a house, in town, close to a good public school, nice neighborhood of other nice houses, and a safe environment.
It can take time to do this research, but this is the most critical part. The rest is contractors and costs. But when renovating for profit, you need to get the right house.
You have heard the term "a thorn between two roses". This is exactly the scenario you are looking for. Especially in a neighborhood, where people seem to be taking care of their yards, and the street looks clean.
But how do you find these places? Isn't everyone else looking for the same thing? The answer is YES. But before you throw in the towel, you should do at least these two things.
If you need any kind of financing for this project, go and get "pre-approved". By getting pre-approved, you will know exactly how much you can spend, your budget will be in place, and you can then decide the range of projects you will need to look at. This will save you a lot of time.Credit: diane palmer
Find yourself a good agent, and work with him/her. This is really important. They will do the homework for you. They can find out about any properties that are coming on the market, before they even hit the papers or those flyers you get in the mail. They will put in the time and effort, and keep coming up with a list of potential homes for you to see. This agent will look in the right areas, because he is also hoping you will use him again to sell it, or to lease it. This will also help you decided where the best place is for your renovating dollars. Changing the backsplash can make a huge difference as in this picture above.
If you do at least the above two things, then you are halfway to renovating for profit.
You can take your time, and then put in an offer on the right property, knowing that your finances are in order, and there won't be any nasty surprises from you bank halfway through this process. Plus having a agent you have picked and feel confident about, will make you feel better about putting in an offer on a property.
After that, you are down to designing and budgets. Just remember, not to turn this into a "palace between roses" or you will not get your money back. The same for renting or leasing the property. You want it renovated to be clean and tidy, and make a new tenant feel good. But at the end of the day, they may not treat your property quite the same way you would. So, keep in mind to include robust materials for the floors etc, especially if you are gearing towards young families, then you are renovating for profit.