Rebeka Morgan of BuildHer Collective, an experienced builder, renovator and renovation educator, explains why the old game of renovating for profit no longer works.
Let’s go back a little with this conversation! Remember the times when developers were all men, they’d buy a renovators delight to tart up a bit. They’d throw a lick of paint on the walls and the tiles, then maybe they pop a box on the back and then resell it for a profit? The mantra was do it as cheaply as possible – which we think has given all developers a bad name!
Well, we are here to say that this does not work anymore!
The market is far too smart for that now. We know when a renovation is cheap and nasty and we are demanding better and more!
Why is this? The vast number of renovation shows have meant that we are more aware of how to renovate, we know what we want and we don’t want to pay for work which we could have done better ourselves. There is also way more access to information – purchasers now know what you bought a property for and how much time it took to renovate, and they’ll make their own calculations on what the renovation is worth (in most situations, forgetting to factor in holding costs, stamp duty and sale costs)!
So, does this mean you can’t make money renovating for profit?
No – but it does mean you need to focus on creating value, presenting a product that is fit for your market and providing solutions that will be valued and paid for by the purchaser.
Style and flair mixed with practicality (ummm, yes that means storage!) has become the key and creating a home that the purchaser is willing to pay for which is more than the cost of the work. There is so much inspiration and imagery available now and our dreams of the home we will live in have adjusted accordingly!
The good news is that this is increasing the standard of the build and means that if you are working in this area you can do really well renovating for profit.
However, it’s not all good news.
With the increase of these renovation shows we have seen more people pick up tools and decide to tackle projects without really understanding the process and the costs, missing the mark and making either no profit or, much worse, a loss. We recently spoke to a couple who had great success in their first build (probably due to a rising market) but despite investing more than 500 hours of physical work on each of the two subsequent projects, they only just broke even. They couldn’t understand what had gone wrong.
We unfortunately hear this type of thing all the time, and whilst renovating for profit can be super fun, there is a key: profit. You do need to make a profit, and a profit that is worth the investment of time.
At BuildHer Collective, we have an amazing group of women, DevelopHers, who are renovating and developing for profit the right way! They know how to run the numbers and make sure they are adding value from the outset. With our experience in this game, we have identified 11 different aspects of renovating for profit that can make or break the budget!
If you have dreamed of renovating for profit, or perhaps you already are giving it a go and you want to know how to maximise your profits, then please join us for our free Stop Dreaming, Start Renovating – three evening event:
Stop Dreaming, Start Renovating for Profit!
When: Monday 7 to Wednesday 9 November 2022, 7.30-to-8.30pm
Where: Online in the comfort of your own home
For more inspiration, check these DevelopHers who have all been featured on Interiors Addict in the past:
1970’s Melbourne home transformed to take in the landscape
An interior designer’s thoughtful and successful heritage renovation
Edwardian beauty revealed under 80s facade and saved from demolition
Before & after: An amazing California Bungalow transformation in Melbourne
