It’s easy to get carried away by your imagination when you’re dreaming of buying your first home. You will paint and decorate it according to your personal tastes. You’ll have the kitchen you’ve always dreamt of having. You might even stretch your budget and install a swimming pool in the backyard. Reality doesn’t hit you until you have to match your first home with your budget. You realise you have to make compromises, but what should you leave out and what should you leave in?
Rather than thinking of your first home as your permanent home, think of it as an investment for the future. When you think of it this way, you start to think of your renovations differently. Instead of thinking, “What do I want?” you begin to think about other things like:
- What will appeal to the majority of potential buyers?
- What kind of return on investment (ROI) will this renovation give me?
- How will my renovations make buyers value my house more than other houses in my area?
When you start asking yourself questions like these, you are well on your way to making sound decisions that will bring your dream home closer to your reach.
First-home buyer dos and don’ts
Successful renovators have learned from trial and error which renovations pay off and which ones are a waste of money. After analysing their market, they stick to the following dos and don’ts.
- Do paint and decorate in a style that will appeal to the widest range of people.
- Don’t choose the most expensive lighting and other fixtures. They may not appeal to everyone and don’t add value to the home that’s greater than their cost.
- Do make all necessary repairs. Most buyers are looking for a house they feel has been well maintained.
- Don’t install an in-ground swimming pool. In the short-to-medium term, swimming pools and other expensive extras do not offer good ROI.
- Do freshen up the home’s exterior. A new paint job or even a new roof and guttering (if they are needed) can enhance the value of a property.
- Don’t overspend on any renovations.
Overspending is arguably the most fatal mistake you can make when renovating for profit. Quality is important, but buying top-of-the-line products can be a waste of money. For example, if your kitchen needs replacing, buy it from a reputable manufacturer who uses sound construction techniques and quality fittings, but don’t buy their most expensive doors or benchtops.
Of course, you want to feel comfortable in your home for as long as you live in it. Spend your money on furnishings and other things you can take with you when you sell rather than on the things you will be leaving behind.
The secret to renovating for profit is in increasing the value of a home’s potential in the eyes of buyers, not in fulfilling your dreams. Your dreams and theirs may be very different.