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Buying, refurbishing and reselling homes: a complete guide to achieving up to 25% profitability - Infobae
Source:
www.infobae.com
September 02, 2024
Known internationally as “property flipping”, this method is popular among investors and end users who buy and renovate properties to obtain a good financial result.
By Jose Luis Cieri
Refurbishing a home and then selling it offers a positive return, but the important thing is that they can be marketed in a short period of time once the work is completed (Illustrative Image Infobae)
The practice of buying, refurbishing and reselling homes is not a new business in the real estate segment. Known as “ property flipping ,” the alternative is gaining ground locally among investors and owners who see an opportunity in the purchase and remodeling of properties that are usually more than 15 years old.
Since 2018, the prices for used apartments have dropped by an average of 40% in CABA and 45% in the province of Buenos Aires. This drop opens up the possibility of finding real opportunities that, with the right renovations, can be transformed into new homes. Although it is true that now in art this trend has been reversed: values began to rebound and rose 5.7% so far this year , the best record in 6 years in CABA.
If the owner decides to sell the property after the renovation, he or she could make up to 25% profit. Alternatively, if he or she chooses to live in it, he or she will enjoy a renovated home and will also have increased his or her investment thanks to the improvements made in each room.
The real estate market maintains that buying properties to renovate and then sell is still a good business. When purchasing a property, it is essential to carry out a detailed visit, evaluating the possibilities of each space and ensuring that all basic services such as gas, electricity and water are working correctly.
To be successful in this field, it is essential to consider several factors. Karina Isaías , a visual artist and interior decorator, highlighted to Infobae that “the key elements for selecting a property to renovate and resell include the location, the real estate demand in the area and the general condition of the property. In order to correctly calculate the renovation costs and the co-ownership regulations (if it is an apartment or PH).”
To get a good real estate deal, the key is to buy at a good price. A significant reduction in the list price can lead to a higher return after renovations. Bathrooms and kitchens, although expensive to renovate, are crucial to attract buyers.
Regarding the evaluation of the property before its purchase, Damián Revelli , an architect expert in home renovations who is very popular on social media, stressed the importance of prior professional advice.
“You have to call an architect. When you buy a used car, you go to the mechanic, and if you are going to buy a used property, call the architect. This advice will allow you to detect hidden problems and evaluate the profitability of the project,” he said.
Architect Gabriela Correa , who specializes in projects, management and execution of new works and renovations, emphasized the importance of a thorough evaluation when purchasing a property. “It is essential to evaluate the condition and severity of the property’s pathologies. Sometimes, homes that look like chaos at first glance are actually healthy. Problems such as humidity, cracks and settlements are usually easy to solve and do not entail large costs,” she recommended.
The before and after of a property that after renovation includes an integrated kitchen and living room (Photo Courtesy: IG @remodelatucasa.ok)
It is suggested to pay special attention to basic services, such as gas, electricity and water, since they are essential to adjust the budget for the works.
Determining the right budget is another crucial aspect. Isaías pointed out that the most expensive rooms to renovate are the kitchen and the bathroom, “but they are also the ones that define buyers,” he said.
The cost of renovating a bathroom or kitchen ranges from $2,000 to $10,000, depending on the size and project. Replacing plumbing can cost up to 30% of the budget, and finishing on floors, countertops and faucets also affect the final cost.
Although the cost of the remodeling can also vary depending on the initial state of the property and the project to be carried out. “There is the remodeling that the client wants and the one that can be done with the budget that they have,” Correa said.
When considering reselling a property, architecture and functionality become key elements. An efficient and well-organized layout maximizes return on investment, while problems such as a poorly designed bathroom are costly to correct and can deter buyers.
Revelli recommended the second crucial point: the decoration and maintenance of the property. “It is not necessary that everything be modern, but it is vital that everything is neat. A tidy presentation and that everything works correctly are aspects that also contribute significantly to the perceived value of the property during resale,” he said.
Opting for porcelain floors is not the same as opting for ceramic or floating floors, given their greater resistance and aesthetics. As for countertops and vanities, the options vary from marble and granite, the most expensive, to Silestone, which offers more colors at a better price.
Once completed, lighting and good furniture play a key role in achieving a successful quick sale.
“Generating as much light as possible and, without a doubt, a well-organized kitchen and bathroom make the property a quick solution for sale or rent,” explained Isaías.
It is also crucial to choose the right sanitary ware and taps, as these materials are key to the final result and its durability.
According to Revelli, it is not advisable to opt for decorations that are too disruptive; instead, “a balance should be sought between design and functionality. I recommend that the house or apartment that is bought to sell should not be painted white and that's it. It should have certain design touches and, above all, take care of the details.”
A complete kitchen renovation can take up to 60 days (Photo courtesy: IG @remodelatucasa.ok)
Isaiah said that “this depends on the condition of the property, the square meters to be renovated and the budget contemplated for the same. But if it is a whole 2-bedroom house, it can take up to 90 days.”
Today, in toilets and bathrooms, it is common to use suspended furniture or fixtures (Photo Courtesy: IG @remodelatucasa.ok)
One strategy used by many professionals to maximize profit margins is home staging , which involves decorating and furnishing the property to make it more attractive to potential buyers. “I like houses to be equipped for sale, somewhat decorated, to present the property,” Revelli said.
There are also strategies to follow regarding how to maximize the profit margin when selling refurbished properties.
Bedroom that was transformed into a modern and brighter environment
Correa stressed: “During the renovation phase, it is crucial to be meticulous in the purchase of materials, seeking the best price and quality. I design renovations and maintenance projects that attract buyers, taking advantage of the variety of materials available to create attractive and economical proposals.”
Considering a PH of 100 square meters in Palermo, a purchase of USD 150,000 and an investment of USD 30,000 in reforms can result in a sale price of up to USD 225,000.
A man installs the handles and adjusts the operation of the door on the under-counter cabinet of a brand new kitchen (Illustrative Image Infobae)
Correa said: “If the property is more than 30 years old, it is vital to renovate the plumbing, gas and electrical installations to ensure both functionality and safety.”
Remodeling time can vary; an apartment requiring bathroom, toilet and kitchen updates could require up to 60 days of work, while a more extensive remodel can take up to 120 days.
Revelli commented: “A job that includes renovating the bathroom and kitchen, as well as painting and decorating the entire apartment, usually takes between 5 and 6 months. It is important to remember that it is not just about painting and changing the coverings in the bedrooms and living room; you have to put everything in place, which includes cleaning and attending to all the details so that everything works properly and is ready to decorate.”
Once the refurbishment is completed, it is advisable to establish a sales price in line with the market to facilitate a quick operation and avoid long periods of inactivity in the segment.
www.buysellba.com
Source:
Comprar, refaccionar y revender viviendas: una guía completa para lograr hasta un 25% de rentabilidad
Conocido internacionalmente como “flipping inmobiliario”, este método es popular entre inversores y usuarios finales que compran y reforman propiedades para obtener un buen resultado financiero
www.infobae.com
September 02, 2024
Known internationally as “property flipping”, this method is popular among investors and end users who buy and renovate properties to obtain a good financial result.
By Jose Luis Cieri
Refurbishing a home and then selling it offers a positive return, but the important thing is that they can be marketed in a short period of time once the work is completed (Illustrative Image Infobae)
The practice of buying, refurbishing and reselling homes is not a new business in the real estate segment. Known as “ property flipping ,” the alternative is gaining ground locally among investors and owners who see an opportunity in the purchase and remodeling of properties that are usually more than 15 years old.
Since 2018, the prices for used apartments have dropped by an average of 40% in CABA and 45% in the province of Buenos Aires. This drop opens up the possibility of finding real opportunities that, with the right renovations, can be transformed into new homes. Although it is true that now in art this trend has been reversed: values began to rebound and rose 5.7% so far this year , the best record in 6 years in CABA.
If the owner decides to sell the property after the renovation, he or she could make up to 25% profit. Alternatively, if he or she chooses to live in it, he or she will enjoy a renovated home and will also have increased his or her investment thanks to the improvements made in each room.
The real estate market maintains that buying properties to renovate and then sell is still a good business. When purchasing a property, it is essential to carry out a detailed visit, evaluating the possibilities of each space and ensuring that all basic services such as gas, electricity and water are working correctly.
What other steps should be taken to obtain better benefits?
In the real estate market, it is a good deal to buy a cheap property for remodeling if you know the trades that will be involved.To be successful in this field, it is essential to consider several factors. Karina Isaías , a visual artist and interior decorator, highlighted to Infobae that “the key elements for selecting a property to renovate and resell include the location, the real estate demand in the area and the general condition of the property. In order to correctly calculate the renovation costs and the co-ownership regulations (if it is an apartment or PH).”
To get a good real estate deal, the key is to buy at a good price. A significant reduction in the list price can lead to a higher return after renovations. Bathrooms and kitchens, although expensive to renovate, are crucial to attract buyers.
Regarding the evaluation of the property before its purchase, Damián Revelli , an architect expert in home renovations who is very popular on social media, stressed the importance of prior professional advice.
“You have to call an architect. When you buy a used car, you go to the mechanic, and if you are going to buy a used property, call the architect. This advice will allow you to detect hidden problems and evaluate the profitability of the project,” he said.
Detect in time
When purchasing a property, it is essential to carry out a detailed inspection.Architect Gabriela Correa , who specializes in projects, management and execution of new works and renovations, emphasized the importance of a thorough evaluation when purchasing a property. “It is essential to evaluate the condition and severity of the property’s pathologies. Sometimes, homes that look like chaos at first glance are actually healthy. Problems such as humidity, cracks and settlements are usually easy to solve and do not entail large costs,” she recommended.
The before and after of a property that after renovation includes an integrated kitchen and living room (Photo Courtesy: IG @remodelatucasa.ok)
It is suggested to pay special attention to basic services, such as gas, electricity and water, since they are essential to adjust the budget for the works.
Pay attention to the budget
The most expensive renovations are usually those that require changes in the layout of the rooms and affect wet areas such as the bathroom, kitchen and laundry room, as they may have hidden defects that need to be resolved immediately.Determining the right budget is another crucial aspect. Isaías pointed out that the most expensive rooms to renovate are the kitchen and the bathroom, “but they are also the ones that define buyers,” he said.
The cost of renovating a bathroom or kitchen ranges from $2,000 to $10,000, depending on the size and project. Replacing plumbing can cost up to 30% of the budget, and finishing on floors, countertops and faucets also affect the final cost.
Although the cost of the remodeling can also vary depending on the initial state of the property and the project to be carried out. “There is the remodeling that the client wants and the one that can be done with the budget that they have,” Correa said.
When considering reselling a property, architecture and functionality become key elements. An efficient and well-organized layout maximizes return on investment, while problems such as a poorly designed bathroom are costly to correct and can deter buyers.
Revelli recommended the second crucial point: the decoration and maintenance of the property. “It is not necessary that everything be modern, but it is vital that everything is neat. A tidy presentation and that everything works correctly are aspects that also contribute significantly to the perceived value of the property during resale,” he said.
Opting for porcelain floors is not the same as opting for ceramic or floating floors, given their greater resistance and aesthetics. As for countertops and vanities, the options vary from marble and granite, the most expensive, to Silestone, which offers more colors at a better price.
Once completed, lighting and good furniture play a key role in achieving a successful quick sale.
“Generating as much light as possible and, without a doubt, a well-organized kitchen and bathroom make the property a quick solution for sale or rent,” explained Isaías.
It is also crucial to choose the right sanitary ware and taps, as these materials are key to the final result and its durability.
According to Revelli, it is not advisable to opt for decorations that are too disruptive; instead, “a balance should be sought between design and functionality. I recommend that the house or apartment that is bought to sell should not be painted white and that's it. It should have certain design touches and, above all, take care of the details.”
A complete kitchen renovation can take up to 60 days (Photo courtesy: IG @remodelatucasa.ok)
Time
As for the time that a renovation project may take, this varies depending on the initial state of the property and the scope of the project.Isaiah said that “this depends on the condition of the property, the square meters to be renovated and the budget contemplated for the same. But if it is a whole 2-bedroom house, it can take up to 90 days.”
Today, in toilets and bathrooms, it is common to use suspended furniture or fixtures (Photo Courtesy: IG @remodelatucasa.ok)
One strategy used by many professionals to maximize profit margins is home staging , which involves decorating and furnishing the property to make it more attractive to potential buyers. “I like houses to be equipped for sale, somewhat decorated, to present the property,” Revelli said.
There are also strategies to follow regarding how to maximize the profit margin when selling refurbished properties.
Bedroom that was transformed into a modern and brighter environment
Correa stressed: “During the renovation phase, it is crucial to be meticulous in the purchase of materials, seeking the best price and quality. I design renovations and maintenance projects that attract buyers, taking advantage of the variety of materials available to create attractive and economical proposals.”
In numbers
Buying and reselling PH (highly sought after in CABA and the province of Buenos Aires because they do not have to pay expenses that are very expensive today) can be particularly profitable, offering up to 25% annual profitability.Considering a PH of 100 square meters in Palermo, a purchase of USD 150,000 and an investment of USD 30,000 in reforms can result in a sale price of up to USD 225,000.
A man installs the handles and adjusts the operation of the door on the under-counter cabinet of a brand new kitchen (Illustrative Image Infobae)
Correa said: “If the property is more than 30 years old, it is vital to renovate the plumbing, gas and electrical installations to ensure both functionality and safety.”
Remodeling time can vary; an apartment requiring bathroom, toilet and kitchen updates could require up to 60 days of work, while a more extensive remodel can take up to 120 days.
Revelli commented: “A job that includes renovating the bathroom and kitchen, as well as painting and decorating the entire apartment, usually takes between 5 and 6 months. It is important to remember that it is not just about painting and changing the coverings in the bedrooms and living room; you have to put everything in place, which includes cleaning and attending to all the details so that everything works properly and is ready to decorate.”
Once the refurbishment is completed, it is advisable to establish a sales price in line with the market to facilitate a quick operation and avoid long periods of inactivity in the segment.
www.buysellba.com
