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How to: Make a profit from your reno

Many Australians have watched reno shows like The Block and caught the DIY bug, but renovating a house for profit can be a risky business.

CEO and founder of The Reno Chick, Cathy Morrissey, has seen it all when it comes to the pitfalls of renovating. She shares her best tips for making a profit from your renovation project.

1. Get educated

“The biggest mistake people make is that they take the advice from the wrong people,” Morrissey says. “They ask their friend who’s never really done a renovation before and made it successful. Find somebody that’s already done this before and repeat what they’ve done.”

2. Don’t overcapitalise

“Usually because people haven’t been educated, they tend to overcapitalise,” she says.

“I bought a house back in 2011 where the vendors had invested too much money in a great bathroom and great kitchen and the house was nowhere near worth the value (of the bathroom and kitchen). They ended up having to drop $50,000 off their asking price, because they’d overcapitalised.”

3. Ditch the emotion

“Don’t be emotionally attached, even if it’s your own home. Know and understand what your house is worth.”

 4. Get the structural stuff right

“Make sure you get the right advice before you do anything structurally. Is it really worth investing all that money in this property if the structural build isn’t right?”

5. Budget, budget, budget

“This is the number one thing that people do overdo,” Morrissey says. “Do your numbers and then create a total budget for your home. Make sure your reno fits into your budget.”

6. Enlist professionals.

“If you are good at doing DIY that’s great. But if you’re not good at it, make sure in your budget you’ve accounted for hiring professionals.”

7. $50k at least

“You must see in your mind to make a profit of $50,000 at least, otherwise it’s not worth doing this. Otherwise, it might be good entertainment, but you won’t make a lot of money. Focus on your budget and the market you’re appealing to.”