Most investors put a lot of effort into property renovations as this adds value to their investments. Stories of renovated properties that make huge profits in the market have served as extra motivation for investors who are willing to shell out a huge sum for these opportunities. The Property Observer lists 5 types of properties you should avoid renovating:
New, or slightly new property. Obviously, a new property doesn’t need much renovation, but investors are often enticed by the idea of making additional profits out of it. New properties will cost as much, and if buyers were given the chance to pick between a newly renovated or a brand new home, they often choose the latter.
The Overhaul, or the Money Pit. These are the properties that require a drastic amount of renovation. What’s worst, is that the renovations are often the ones that cannot be seen. This may be structural issues or extensive termite damage. Think twice when investing on these properties and save yourself the headache.
Location. If the property has the potential for renovation but in a poor location, it’s not worth it. Property values can be drastically decreased because of poor locations.
SMSFs. When purchasing property using SMSFs, be aware that there are certain restrictions that you must abide. One of these restrictions is certain alterations and renovations. Consult a financial planner to ensure that you are compliant to the standards.
Properties that are out of the budget. Just because the property has a lot of potential does not mean you should buy it as you may not have enough left for possible renovations.
Read more about these tips on the Property Observer website.