Canstar asked 5 experts, including me, to share how we got on the property ladder and share what we learned from our experiences Here’s what we had...
If you’re a first home buyer, and you’re looking at adding value to your property, then you can do that through renovation.
It is my secret, sneaky, sixth step in the financial freedom framework.
We talk about the five steps, this is the sixth step. Once you have slammed that property, whilst your living in that property, you can renovate it at a time that suits you, when you get the money to do it, you don’t have to do it all at once, to create extra value.
It is like having your own vending machine. For every dollar you put in, with a strategic renovation, you should be getting $2 out.
What is a strategic renovation? Well, a strategic renovation can only be done on old properties, not new.
Buying new actually takes this entire strategy off the table for you.
Now, I talk about my Trid3nt Strategy, three ways of making money. We’ve talked about how to negotiate to make money when you buy. We’ve talked about how to be in a capital growth area, so your property is making you money for years in the future.
And now, we’re talking about #supersizingit that and doing a renovation that strategically, can add $2, at least, for every $1 that you spend. And if you decide to rent that property out in the future, create a higher rental income for you, so the gap between your mortgage repayment and cost and the rent you get is even smaller.
One of the things that people get wrong, well they buy in the wrong suburb. They don’t understand pricing disparity, the difference between the renovated and the unrenovated costs of properties in the suburb.
You have to be in the right suburb first. That’s why it’s important, in the beginning, to see it, and understand your strategy before you even begin. Then what you need to do, is have a property that has the capacity to add value. Not every property that has the need for renovation deserves a renovation.
Understanding if there’s capacity is by looking at realestate.com.au, domain.com.au, or even using RP Data, that allows you to be able to look at the sold properties, and look at what the renovated properties are selling for, and unrenovated, and working out, using trades quotes, and we’ve talked about at least four, so you’re not ripped off, to be able to understand, is there capacity to make some money?
You need to understand what the buying price is, what the renovation cost is, what the profit you wanna make, and what your holding cost is, and if that, in total, is actually higher than what the renovated properties are selling for in the suburb, or the renovated comparable properties in the suburb are, it’s time to walk away, ’cause you’re not gonna make money out of it.
Renovation is a super sneaky strategy to allow you to make money in any market. So, we talked about also, there’s some room-by-room tips that I wanna share with you.
Check out the link to be able to see the www.janeslacksmith.com.au/roombyroom, all those tips and tricks. We talked about how to repaint, we shared a few other tips, get in there and watch the entire episode. It is fantastic, and that is it for the super strategy.
Watch the full SHOW here
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