One of the most important things you should know as a successful property investor is how and what to spend on renovations – and perhaps more importantly, what not to spend. It’s the same whether the property you intend to give a makeover is your own home or an investment property. The main goal is to make upgrades that will be profitable now or in the future.

Keeping this goal in mind can help you figure out which among the thousands of possibilities deserve to be put into action.

Do not Over-Capitalize

It is a good idea to establish the probable sale or valuation price of the property after the renovation has been done. This value is just indicative, of course. Try to check out similar properties in your neighbourhood which have had the same renovation project. You can also consult with a real estate agent to find his or her opinion on its value before and after the renovation is done. The information you’ll get can be used to find the median price and stay within a range of that. You don’t want to end up not being able to recover the costs when you sell.

Establish a Budget Range and Stick to It

Most experienced renovators and investors suggest that you keep your budget for renovation to around 10% of your home’s current market value. Try to stay on the lower side of that range, especially if the area has low demand. If the neighbourhood is really good, then you can add 1-2% to your budget.

Understand Your Target Market

If you live in the area, then find out if you can check the property inspections of similar properties to see who those properties are attracting. Take time to read the comments during an inspection. For instance, if a number of comments talk about how the house would have been perfect had there been a bathtub, then you might want to add that feature. Local real estate agents can also help you understand the level of demand, the kind of potential tenants you are likely to attract, and some specific features they could be looking for.

Don’t Forget about Curb Appeal

Once you have made the changes that will better cater to your target market’s needs, you would want to pay attention to curb appeal. Believe us, first impressions count. It doesn’t need to be an expensive makeover. Most of the time, a fresh layer of paint, some plants, and new fences can do the magic.

Put the Plan on Paper

Just having the things you want to be done in your head can be overwhelming. This is nothing a detailed checklist can’t fix. Be specific with your plan. Include how many funds you are allocating to each area of renovation. Don’t forget to update as the expenses start adding. If you are like most property owners, you will always find more things to upgrade than your budget would allow. By keeping track of how much money is already going out, and having what you should prioritize listed down can help you avoid getting surprised later on.

Take Photos

After all the work is done, don’t forget to have a professional photographer over to take shots as this will be the time when your property will look its best!