If you’re planning to renovate your current home, or you want to get into flipping properties as a professional concern, then there are a lot of things to think about.
From organizing the works to setting a budget and finding the funding, you need to be ready to overcome a number of administrative obstacles to fulfill your renovation ambitions.
With that in mind, let’s discuss some key questions you’ll need to answer and some impactful strategies to consider before you embark on this potentially rewarding journey.
Should You Refinance Your Current Home to Raise Funds For Your Renovation Project?
A popular option for people looking to revamp their current property is to refinance it, and use the equity they release from their home as a means of paying to improve it.
Before you do this, it’s worth getting a valuation from a local realtor, so that you can work out both how much your property is worth right now, and what value might be added by the renovations you intend to carry out. You can find reputable agents in your area via sites like Home & Money, and also look into potential refinancing packages as well.
Refinancing will only make sense if the work you do makes your property more valuable. If not, you could end up in negative equity, which is far from ideal.
Should You Do The Work Yourself Or Get Contractors Involved?
The temptation to try and complete renovation projects on a DIY basis in order to save cash can be significant. However, this is not always the best route, as any savings you make here might be negated by the ultimate quality of the finish, which has a big influence over a property’s value.
Calling in the contractors to take care of the jobs that need doing also has its caveats, as you’ll need to find reputable professionals and also manage the project to make sure it is taking the right direction.
A combination of the extent of the renovations required and your available budget, as well as your own skills and background, will impact your decision here. If the work needed is only simple and aesthetic, doing it yourself will be worthwhile, especially if you are a property flipper. If the work is more specialized, complicated and labor-intensive, outsourcing it will be better.
Should You Sell On Immediately Or Consider Renting Out The Property?
This question applies to property flippers specifically, but it is one to weigh up carefully. In most instances, flipping a property to put it back on the sales market is the main aim, but depending on the current conditions and your own circumstances, it may be worth holding onto it.
For example, if you don’t need immediate access to the capital that you’ve sunk into the project, and the average rental values in the area are high enough, then you could get a better yield and passive income going this route, and also retain ownership of an appreciating asset.
Of course if every penny you own is tied up in your renovation project, or you don’t want to deal with the hassle of looking after tenants, then selling will align with your intentions.
Rushing into a renovation project, whatever form it might take, is a bad idea. You should really aim to get all of the key aspects in order, from the funding to the contractors and beyond, before you get anywhere near a sledge hammer or a paint brush.
Also remember that if this is your first time, making mistakes is all part of the process. You just have to learn from them so you don’t repeat them.