How to renovate a buy to sell property for profit
/If you’re at the start of your renovating homes for profit journey, then you’re likely to be a little overwhelmed with where to start to make the best profit possible. (For this post we’ll assume that you are already a renovator but if not you should read our Renovating a House: Where to Start post).
When you’re new to it, how do you tackle the buy to sell mortgage process? What should you plan for? How do you make the most of your money when renovating property for profit? It can be a minefield out there, especially when many of your advice sources may have a financial interest.
And what’s more, buying to sell means you’re working with completely different rules to when you buy to renovate for yourself. So we’re here to give you some impartial pointers on how to plan, budget and make the best profit possible throughout the buying, renovating and selling process.
Time to start planning your buy to sell house flip
1. Do your market research
Fools rush in, right? Don’t make the mistake of buying blind. Research your potential areas so that you’re all clued up on the area, local schools, current rate of sales, even the kinds of people in the area (young families etc). Without this, you’re taking a blind stab at who will want to buy the property and that really defeats the profit bit of renovating for profit.
2. Be aware of what needs doing
Can you get away with simple cosmetic renovations for profit? Or are you ready to take on a full remodel to really maximise your money? Assessing the work to be done sensibly is crucial in your buy to sell plan. It might seem like an obvious point but it’s a really common mistake and it, along with your mortgage, will form the basis of your whole buy to sell property budget. Figuring out which survey type is best for the property can also really save you some surprised later down the line.
3. Get the right mortgage
Finances come first. Ensure you seek out the right kind of mortgage product, so start looking for a buy to sell mortgage (or bridging loan) and see what’s out there. Rates may be a little different to your average mortgage products which could make a bigger impact on your overall budget. Which brings us onto our next point…
Finances are key in making that renovation profit
4. Budget, budget, budget
We can’t stress this one enough. You’ll need an extensive, comprehensive and as-failsafe-as-possible budget, incorporating your buy to sell mortgage, to make your plans work out.
If you read our post our experience of budgeting, you’ll get a good idea of how to learn from our mistakes.
Fleshing out a realistic, well-considered and strict budget is absolutely crucial. Without strict budgeting, you might totally defeat the purpose of buying and selling for a profit. We get that creating your entire budget on your own is a mission (to say the least), so why not take our help and let us do the hard work for you with our Home Renovation Budget Planner.
5. Fit your timescale to market conditions
You’ve got to adapt to market conditions. It’s such a huge shame when you see a beautiful reno job sit on the market for six months because it’s just the wrong time. On this point, don’t put all of your trust in the words of estate agents. We’ve also seen the same happen because (some) estate agents would rather get your property on the market in slow times than advise you to wait.
Try asking in the local community and tracking sales online instead. Take screenshots of similar properties for sale in the local area, then track the asking prices, weeks or months later. The closer you get to the market, the better prepared you will be for the opportunities or challenges ahead.
6. Have a plan (for everything)
Whether you’re going full gut and remodel or just a quick cosmetic makeover on the property, you need to be planning the process right down to sale in (almost) excessive detail. Know what you want, know what needs to be done, make sure either you or your contractors have the right skills (see below). Along with this, slotting all work to be done in the timescale you’ve got will take continuous effort so make sure you’re being realistic It’s especially important here to make allowances for little hiccups.
With a solid plan, you can’t go too far wrong and you’ll make sure your money is used as efficiently as possible.
A solid plan will make your buy to sell renovation a success
7. DIY but delegate
On that note, we’re big fans of DIY-ing wherever possible, but taking on things you can’t handle means you’ll ultimately be losing both time and money. Hire experts for the obvious things such as electrics and plumbing (if necessary) but also anything else that would be a waste of your skills. Save money doing what you can do yourself. Hire a pro for the rest. Simple.
8. Convert wisely
The secret to renovating for profit lies in making more out of less. Look to extend up, down and sideways. If you can squeeze an extra bedroom into a property, you’re giving your chances of a tasty sale price a big boost. Think about it, 4 beds looks better than 3 on any listing, even if it’s a box room. As always, educate yourself on Planning Permission and check with your local authority on your limitations. If you’re looking at adding that extra something, use an extension or conversion to give your property that winning factor so the others don’t stand a chance (just make sure you don’t go over the house ceiling price for the area).
9. Know where to focus your reno funds
Now you’ve got your superstar budget, you need to be focusing it in the right places to maximise appeal to potential buyers. The facts are pretty universal on buyers putting value on kitchens and bathrooms so get these looking spick and span is a priority. On a smaller scale, channel your funds into doors, windows, light switches and painting as these are the things that will make the biggest impact on attracting a better selling price. It will also be prudent to ensure the roof and wiring is in good condition, without this, you could be preventing your buyers from getting their mortgage, so your future sale could not go through (believe us, we’ve seen this happen).
If you’re in need of some inspiration for your buy to renovate and sell property then check out our post on how to add value to your doer upper.
Planning now makes for an easier flip renovation process
10. Balance quality with potential profit
With that said, you also need to break down how you’re spending on a more cosmetic level. It’s easy to go big on the flashy fittings when you’re trying to attract a tasty profit, but be mindful of only spending money where necessary. Budget is key! Whilst it would be an obvious exaggeration to say you wouldn’t fit a £20k toilet (yes, they do exist) into a £100k fixer upper, the same principle applies to any reno job. Remember, you’re not doing this to your tastes, you’re doing it to attract the right buyers. Keeping it simple with walls and carpet means your purchasers can see flexibility in their new home.
It’s all well and good having the funds ready but you also need to know how to allocate it to make the best impact for sale. Take a peek at how we used our online course to smash using our budget in the best ways possible.
11. Set the scene for sale
Sure, empty houses give a good idea of how much space the buying will have to play with, but it might be worth buying (or renting) some key pieces to make the space a little more appealing. Think perhaps a sofa, coffee table, rug and a couple of key soft furnishings. So pairing a versatile home with some welcoming decor makes for the perfect combo to get those buyers through the door and signing that contract!
So there we have it! Hopefully we’ve given you a helping hand on the way to figuring out the world of flipping a property. We’ve got the know how on how to handle your buy to sell mortgage funds with the best budget possible so that you can get the big bucks rolling in when it comes to selling.
Any questions? Want to share your experience? We love learning as a community so please do share what you have found and we can all learn from it.
