EPI 105 | Making the most of what you have – finance and renovation

Everyday property investing - podcast episode

EPI 105 | Making the most of what you have – finance and renovation

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What’s news

 

Feature – Making the most of what you have – with Jane Slack-Smith

 

Quick tip and action

  • Check out the The Ultimate Guide to Renovation
    I
    t’s a great course with solid, high quality information
    on finding the right investment location and property
    as well as how to add value through renovation.
    The course runs twice a year and at the time of publishing
    this episode (Sept 2015) it is open as we speak!
    Don’t worry though if you are listening to it in the future, you can always  send me a quick email and I’ll add you to an early notification list  for the next time it comes around.
  • Assess your current portfolio and see where you can add value

The Ultimate Guide to Renovation – Oct 2014 launch

 

One of Everyday Property Investor’s regular guests, property educator, mortgage broker and renovator, Jane Slack-Smith is opening up the doors to her very comprehensive and high quality course on Renovating for Profit.  She is currently in full swing with her launch video series – full of great information and based on some real-life case studies. We here at EPI, being avid renovators ourselves, have been through and continue to gain tips, knowledge and information from the course and the great community created around it.

 

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EPI 096 | Renovation mistakes, money suckers and add value tips

Everyday property investing - podcast episode

Renovation mistakes, money suckers and add value tips

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What’s news

unlocked_house_with_key_400_clr_9575
  • Mastermind Jo on making an offer, being ready to go, and sticking to your guns
  • Kaz bought a property in her SMSF

 

Feature – Jane Slack-Smith on Reno Mistakes

  • Renovation mistakes, money suckers and add value tips
  • The Ultimate Guide to Renovation course is getting ready to open it’s doors again!
  • Sign up to Jane’s course via Everyday Property Investing
    and get 2 special bonuses!:
    A 30-minute renovation or investing strategy session
    via Skype with Kaz AND
    A copy of our Renovation Quick Calculator—the tool
    Kaz uses to assess a renovation deal

 

Mindset


light_bulb_sketch_off_400_clr_14173

 

Quick tip and action

  • Are you ready to purchase?
    • Do you have a deposit?
    • Do you have finance approval?
    • Do you have the purchase entity set up?
    • Do you have all the documentation you need on hand?
    • Do you know what your criteria is?
    • Do you know what location you are going to focus on?

EPI 089 | Learning to buy well and renovate for profit with Jane Slack-Smith

 

Everyday property investing - podcast episode

 

Learning to buy well and renovate for profit with Jane Slack-Smith

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DOWNLOAD (Right click and ‘Save as’): EPI 089 | Learning to buy well and renovate for profit with Jane Slack-Smith (61.6MB)

Ultimate Guide to Renovation review

for-rent-sign-2-1328867-m What’s news

  • Mastermind Jo on the trials and tribulations
    of getting a property rented
  • Kaz on juggling offers
    • The stats aren’t keeping up
UltimateGuideToRenovationCourse Feature 

multipurpose_tool_words_400_clr_7137
Mindset

Quick tip and action

hands_giving_keys_400_clr_9653
  • Take control of your property management
  • Manage your managers, ensure things are
    heading where you need them to go and
    keep onto them
  • Call them every second day to ask how they
    are going – remember squeaky wheels!


Ultimate guide to renovation review
 

EPI 088 | Renovation Case Study – Interview with Kaz

 

Everyday property investing - podcast episode

 

Renovation Case Study – Interview with Kaz

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DOWNLOAD (Right click and ‘Save as’): EPI 088 | Renovation Case Study – Interview with Kaz (47.2MB)

 

Things we talk about

   house_market_graph_12473

What’s news

  • The latest on Mastermind Jo’s reno
  • Buying in a hot market
    • The stats aren’t keeping up
    • Limited opportunity for discounts
    • Multiple offer situations
    • Getting in quick
    • Knowing what the value is
    • Looking to the next suburbs
Moorooka renovation Feature 

  • Buyer’s Agent Lisa Parker interviews Kaz
    about the Moorooka reno project
goal_meter_burst_400_clr_13662  
Mindset

 

Quick tip and action

hands_holding_house_400_clr_9640
  • If you are looking to make a reno flip project
    work then buying in a hot market means that
    you may find it hard to make the numbers work
  • If it is a hot market and growth is expected then
    really, you should be doing your darndest to
    hold the property
  • For small scale residential investment, the
    money is in the long term capital growth and
    the flip should only be used where you are
    unable to hold the property for some reason 

 

 

The Ultimate Guide to Renovation

 

Check out this fantastic course from Jane Slack-Smith that gives you the step by step, comprehensive, systematic approach to renovating for profit – It’s the Ultimate Guide To Renovation!

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Renovation Feasibility: Just because you can doesn’t mean you should

 

renovation

Home renovation and DIY is a huge industry, not just in Australia, but in many countries around the world. The proliferation of home renovation shows has both demonstrated and contributed to this phenomenon.  For many, the goal is to improve their own home, for their own purposes; but for others, the goal is to increase the value of your home or your investment property for the purposes of creating equity or a cash profit upon sale.  Can you, however, really make a profit with renovation?  And if so, how do you work out what is going to be profitable and what is going to be a whole lot of work for very little return?  Let’s take a closer look.

house and block.001Lots of people undertake improvements on their own home so that they can benefit from those improvements. Who doesn’t want a brand spanking new kitchen to enjoy? Who doesn’t want that lovely outdoor decked entertaining area? There’s absolutely nothing wrong with splashing out to your heart’s content on such improvements and forging ahead without calculating the financial feasibility and expected financial outcome of the improvements where your sole aim is to provide enjoyment to yourself and your family.  So long as you understand that that is exactly what you are doing.

This article, however, relates to those who are looking to do renovations that will result in financial gain, either through revaluing a property to access equity or selling a property for profit.  In this case, spending time on renovation feasibility is a must and can really save you a LOT of work in the long run.  Just because a house is run-down or can be improved, you see, does not necessarily mean that the project will stack up as a money making venture.  When you are renovating for profit you need to be adding value much greater than the funds than you are expending.

Just because you can doesn’t mean you should.

This is where many people come unstuck in their renovation project. You see it’s not about how beautiful the property looks at the end, as shows like ‘The Block’ may have you believe; it is all about the numbers. These are numbers that you can and must assess before you take on a project or buy a property.

These are the key numbers that are important in calculating your renovation feasibility:

  • Purchase Price — This is the price that you pay for the property.
  • Buying Costs — These are the costs associated with the actual purchase of the property and include things like loan establishment fees, mortgage broker fees, buyers agent fees, legal costs, stamp duty.
  • Renovation Costs — The cost of the actual work, both materials and labour to renovate the property.
  • Holding Costs — The costs associated with holding the property during the renovation and up to the sale (if you’re selling). This includes things like bank interest, council rates and charges, water, power, gas.
  • Selling Costs — These are the costs associated with selling the property and include legal fees, agent fees, advertising and any other costs associated with the property sale.
  • Profit Margin — This is how much money you want to make from the project.
  • Expected End Value or Sales Price — This is the expected value that the house will have or achieve at sale after the renovation has been completed.

In a moment we’ll walk through an example of a renovation feasibility and you will see that the differential between your purchase price and your end sales price needs to be quite significant in order to account for all of the costs in between.  This is where you will really start to see that turning a profit from renovating is not as easy as it sounds.

sample property

Let’s take our example property, which is a real deal that I looked at recently.  A great property in a fantastic location just crying out for renovation.  This is our ‘high level’ feasibility to determine if it’s worth looking more closely into the project.  If we can get our numbers to be someone in the ballpark of where we need then we’ll undertake more detailed analysis.

sample

So what you can see here is that if you buy the property at $440,000, spend 6 months or so renovating, ensuring that you spend only $30,000 on the renovation then you must be able to sell the property for $567,200 in order to achieve your aim of $40,000 profit.  Now that may not be easy.

Some key questions to ask:

  • Do renovated properties in this area achieve $567,200?
  • If so, can you renovate it up to this standard required for your allocated $30,000?

Once you lay out the numbers in front of you like this for any property you are looking at then you’ll be able to assess if the project really can make a profit for you and therefore you’ll become a lot more ‘choosy’ when it comes to selecting your property in the first place or deciding whether to renovate a property you already own for profit.

You can also use this exercise to run some ‘what if’ exercises:

  • What if I could buy the property for $30k less?
  • How does this affect my end sale value?
  • What if I could renovate for $20k instead of $30K?

You can run some scenarios and be clear about the maximum amount you can pay for a property to make your project work—and hopefully stick to that number and move on from the projects that look like they’d be great but just don’t stack up!

There are so many ‘renovators’ delights advertised but reality is that many of these are properties definitely in need of improvement but they won’t necessarily make you money.

Remember: Just because you can doesn’t mean you should!

EPI 076 | Renovation: The Block Debrief 5 – Special Edition Podcast

The-Block4e

EPI 076 | Renovation: The Block Debrief 5 – Special Edition Podcast

In this special edition podcast episode, Kaz and Jane Eyles-Bennett of Hotspace Consultants discuss renovating outdoor spaces, as inspired by The Block’s recent episode where the couples renovated a terrace.

LISTEN (00:27:33 min): 

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DOWNLOAD (Right click and ‘Save as’): EPI 076 | Renovation: The Block Debrief 5 – Special Edition Podcast  (26.5MB)

Note: Please note, images used in this article are from The Block website 

Matt and Kim's terrace Things to consider

  • Where is the property? Climate?
  • Who is your target market?
  • What is your budget?

 

Alisa and Lysandra's terrace Setting priorities

  • Prettifying existing space
  • Creating extra living space outside
    to get bang for your buck

 

 Note: Please note,  images used in this article are from The Block website  

 

EPI 075 | Renovation rollercoaster and listener questions

Everyday property investing - podcast episode

Renovation rollercoaster and listener questions

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DOWNLOAD (Right click and ‘Save as’): EPI 075 | Renovation rollercoaster and listener questions (38.2MB)

Things we talk about

Calculating cashflow Calculating Cashflow

  • Things to factor in: land size, zoning, overlays, sewer lines,
    rental yield, vacancy rates, anticipated growth, facilities, sales
    history, advertising history, etc.
tradespeople Real-life renovation issues

Quick tip and action
quotations
  • Make sure you always get written quotes from at least 3
    sources – and beware of psychos!

 

 

The Reno Kings on EPI’s Renovation Project

 

So what have we been up to lately? Well, this is what:

Yep, those are yours truly and  Mastermind Jo making our small screen debut  via Today Tonight.

The episode features Reno Kings Geoff Doige and Paul Eslick dishing out some renovation tips on how to add value to a property whilst spending less. And oh, that’s our very own renovation project in Brisbane that’s used as an example.

Tell you more about our ongoing renovation project in posts to come. In the meantime, let us indulge in this 15 minutes (actually, less than 5 minutes!) of fame.