Many people do at least some renovations when they’re looking to turn over investment properties in order to freshen up a home or building’s appeal. But revamps shouldn’t be cookie-cutter endeavors that follow the same basic recipe. To do renovations most effectively, don’t start with contractor interviews—begin with a drive around the neighborhood instead.
“The key to a successful home sale is in the buyer,” says Mary Jo Quay, a realtor in the Minneapolis area. “They’re willing to pay more for a home that seems renovated just for them.”
Understand what kind of buyer you’ll attract, and you can renovate accordingly and likely save some money in the process. Here are three top tips for finding out which buyer will be right for you:
1 – Know the Neighborhood
It’s likely that you’ve done some homework on the area before purchasing the property, but now it’s time to take another look. Getting to know the demographics of a neighborhood can be hugely helpful for renovations. For example, if there are mainly young families surrounding the property, it may be best to renovate with a family room or playroom in mind. But if the neighborhood has mainly older couples, you might want to consider features designed for more senior independence, such as contrasting paint colors in hallways for better visibility, railings inside showers, and lower kitchen cabinets.
Work with a realtor or other professional to get data that shows financial, educational, professional, and age demographics in a neighborhood.
2 – Determine the Level of Character
If you’ve become familiar with the homes in the area and they all seem within a certain era—for example, 1920s Craftsman houses or 1950s ramblers—incorporate some of that charm into your renovations, Quay recommends.
Recently, Quay showed a home that was built in the early 1900s, but had very modern, sleek details, including blonde wood accents. Even in a competitive market, that house remains unsold. “It didn’t fit with the character of the home or the neighborhood,” Quay says. “The buyer walked in with an expectation of some era-specific touches, and instead got an IKEA showroom. If you want to remodel with that look, then choose an urban property geared toward buyers who want that.”
3 – Watch Some TV
In a neighborhood that skews toward younger residents and families, it’s likely that your potential buyers will be part of the HGTV group, Quay says. “New, young buyers are fanatics about that channel. They don’t want to renovate themselves, but they’re getting ideas based on the remodeling shows they see. They know what the trends are, and they’re looking for those.” That doesn’t mean putting marble countertops and a kitchen island in every property, but it does imply that you should be on top of what’s new in paint colors, floor plans, bathroom fixtures, and other details that viewers (and your buyers) notice and appreciate.
Every property is unique in terms of its renovation needs. But by narrowing down your pool of buyers, it’s likely that you can pursue changes that are more cost-effective and meaningful—leading to faster sales and potential bidding wars.
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