Adding Value to Your Real Estate Investment

   As the saying goes, 'There's no place like home.' And, as little flaws and neglected projects become apparent over time, many have been bitten by the renovation bug. Investors are keenly upgrading, repairing, and making their properties more modern and comfortable.

What's more, the good news is that despite the brief upheaval of the housing market following the COVID-19 pandemic, the current market promises an active and beneficial year for buyers and sellers.

Home Improvement Do’s and Don’ts

Many real estate investors are considering upgrades to increase the value of their properties. However, it's essential to plan renovations carefully and focus your efforts on where they will have the most impact. Here are some tips for investors to improve their profit margin:

Over Capitalizing

You may have often heard this phrase, but what does it mean? Simply put, it means that you should not spend more money on upgrades than what you've already spent on the home. This amount includes what you paid for the house, plus interest and the cost of renovations.

Research current property values in your neighborhood and surrounding area and ensure that your upgrades are in sync with these values.

For instance, you wouldn't want to add an extra floor to your home in an area that mainly accommodates small family homes with two—or three—bedrooms. 

Which Improvements Will Increase Your Home's Value?

Consider the trends and needs of the generation most likely to be in the housing market and place yourself in their shoes. 

Additional space is an excellent starting place, especially with a more open floor plan and additional bedrooms. You could also consider adding a 'granny flat' or 'mother-in-law suite' to accommodate young adults still living at home or your older parents.

Older homes often lack enough bathrooms, so why not add one? This will go a long way in attracting potential buyers or renters.

The kitchen is often the one aspect that makes or breaks a deal. However, beware of overspending and keep your return on investment firmly in mind.

Entertainment at home has probably come to stay, and adding an outside porch or deck from the lounge area will indeed be sought after. 

Another area you'd be wise to invest in is security, which always takes precedence no matter which suburb or city you live in.

Which Renovations Won’t Increase Property Value?

These are often luxurious and pricey big-item projects:

●Fitting out the property with full solar capacity

●Drilling a borehole and installing a pump

●Aircon installation

●Adding a swimming pool

●New windows and doors 

Spend Wisely

It's always advised to use professional and experienced contractors and builders to ensure quality. Always request more than one quote and double-check your contractor's reputation. 

Create a budget and control it unequivocally. Anything you didn't budget for in your estimate could throw you off budget; even regular small purchases could upset the financial balance.

You can join the majority and create an even more comfy zone for your family or step out and continue navigating the property market to reach your dream home goals.

Home Building and Renovation Costs

Depending on the size of the property and other factors, the cost of building or renovating your property can be very overwhelming. Below are some of the considerations to keep in mind.

Estimating the Expenses

To estimate the expenses of building from scratch, you have to look at several different factors.

Things like the location you choose, the size of the house, materials used in its construction, extra features like landscaping and security, and professional services like upkeep as well as the workers needed to build the home.

Another factor in this process is understanding the local rules and regulations to ensure you don't do anything that could cost you money down the line. 

Now that we've discussed that, let's take a closer look at the actual cost breakdown:

Cost Breakdown

undefined Location - This may be the most important thing to consider when looking at the cost breakdown because it determines how much it's going to cost to build your house.

It can change from province to province as well as area affected by the size and type of the property.

undefined Size/Material - The next factor to consider when looking at the cost breakdown is the size of the property as well as the materials you want to be used in the build.

 This means if you intend on using bricks in your build as opposed to wood, you're going to pay more.

Likewise, if you choose to have roof tiles as opposed to some other option, this may all affect the bottom line when it comes to the cost of building your home.

undefined Room/Features - Another thing to consider when dealing with the cost breakdown is how many rooms your home will have. Also included in this are the features you want to be built into your home.

For instance, kitchens and bathrooms add to the price but so too does adding a swimming pool.

undefined Professional Services- The last thing that affects the cost breakdown is the services provided while building the house. This includes things like contractors as well as the size of the company and amount of people on the project.

Some other costs may include things like the structural engineer, a lawyer, and an architect.

How to Get Funding

When you're looking at where you can get funding for this home-building or renovation project, you'll look at the same place as you would for a traditional home loan.

This means you will be visiting banks and lenders who will evaluate your credit and other financials to ensure that you are stable enough for them to loan you the money.

To apply for these loans, you'll need the provisional drawings, a building contract, builder registration proof, and a lien waiver.

After you get those, then you will be able to approach lenders and find the funding to build your dream home.

Conclusion

Understanding the costs and options you have will help you be more knowledgeable when it comes to building your own home. It might also take some of the stress off your plate because there will be no major surprises.