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Back You are here: Home Property Building and Renovating Renovating for a Profit

Renovating for a Profit

Renovating an old Bulgarian property can be both strenuous and rewarding. Turning a derelict shack into a dream pad is a satisfying experience. If you have bought property in Bulgaria with a view to renovating and then selling on at a profit then you need to think very carefully about what renovations are necessary and which are not. Not all property renovations add value. In fact, some do absolutely nothing for the end sale price. Quest Bulgaria takes a look at what pays and what does not.

 

Determining the Reason for Buying

To avoid the experience turning into a property nightmare a little forward planning can avoid the stress and pitfalls so often encountered in renovation projects. The first consideration should be why you bought the property in the first place. Rather than coming up with a list of “maybes” you need to commit to one reason and if this reason is that you bought to sell on at a profit, then you must base every decision you make around this. If you want to live in the property yourself, then you can splash out on granite worktops and stainless steel kitchens, but if you expect to sell the property on within a year or two of buying it lavish renovations are a waste of money. It is far better to opt for a good, simple style.

Setting a Budget

If you are an avid fan of the many property TV programmes like Property Ladder, you will already be well aware that going way over budget is not an option. You should determine your budget by researching the sales price of other similar sized properties in the area. It’s no good looking at what people are asking for similar property because there is no formal valuation process in Bulgaria. What you need to do is speak to estate agents to find out what they have sold in your area.  Once you have an idea, you can then fix your renovation budget. If your property costs 25,000 Euros to buy and renovated properties in the area are selling for 55,000 Euros, your renovation budget cannot exceed 25,000 Euros and this would only give you a small profit. Professional renovators expect to earn around 3 to 5 Euros for every Euro spent. You can save money by doing most of the work yourself, or finding a cheap source of labour. If you overrun on budget, you must stop spending. Finish off what you can do without spending money then stop and try to sell the property as it is.

Speed is of the Essence

Remember that time is money! When you are looking to turn a profit, you need to minimise the time you spend on renovating your property especially if you have bought using a mortgage. During the time you own the property you will have to pay utility bills and local taxes, which will all have to come out of your renovation budget, but the biggest threat to your budget is the amount of money you have to pay for your mortgage.
Don’t overestimate what you can achieve from buying and selling property. Big money can only be made at the top end of the market where buyers are so wealthy that they have a voracious demand for luxury.

Renovate to Suit the Project

Choosing a kitchen and bathroom and adding those little extras that make a property appealing is the fun part of a renovation, but it is so easy to blow the budget very quickly by getting carried away and decorating to suit your own tastes rather than those of potential buyers. When choosing a kitchen or bathroom suite you need to keep it simple and practical. Shop around some of the smaller independent stores in Bulgaria are often cheaper than the larger retail chains and many have some very stylish articles on offer at a low cost, particularly in the lighting department.
Areas you really do need to focus on are privacy and security. In effect this means a boundary wall hiding a private garden with parking space and an interior with decent-sized bedrooms with plenty of storage and more than one bathroom. The garden does not need to be elaborately landscaped, but it does need to be neat and tidy to sell. Thus a decked seating area and gravel garden works well. Whilst everyone would love to have a pool, this can only be added, as an option at the end of the project is the budget allows. If you can’t put a pool in then the potential buyer can see that there is room for a pool.