Category Archives: Renovating

My November 2014 Goals & Projects Report

my november 2014 goals & project reportThis month I thought I’d write a detailed report about the progress that I’m making towards some of the goals and projects that I currently have on the go. This is my November Goals/Project Report, which goes over some of the major projects and the progress that I’ve made on them so far.

It’s my hope that you can take away something from this report that will help inspire you to achieve your own goals.

Watch My November Project Report:

My Project Breakdown

I’m now going to go into some of the projects I’m working on in detail and share exactly where I’m at with them. If you enjoy this sort of post be sure to comment below.  I’m even thinking of making this a monthly report including other personal goals too, for 2015.

South Hedland Property Development

DA (Development Approval) approval is now in place.

The existing property has been tenanted at a rate less than initially planned. This has been due to the downturn in the market in WA’s north-west. We are still achieving figures that will meet our projected profits, but on the lower side. Once the new buildings have been completed, we expect there to be an invigorated interest in the area and would like to secure a long term corporate tenant into the new properties.

When the building plans were submitted for approval there was a rejection from Council in regards to how close the bathroom was located to the front of the house. The architect is making some adjustments to the plans to comply with the changes required and then we will go back to the builders to re-quote on the amended designs. The change shouldn’t actually affect the final price very much.

Click here to view this property.

Flynn Street, Churchlands

The kids are moving out!!! This property was purchased for the intention of using it as accommodation for our two children while they were studying in the city. We selected this particular apartment for the following reasons:

  • 6 mins drive from the city centre
  • 7 mins drive to the beach
  • Walking distance to small and major shopping centres
  • Bus stop right outside the door to the city, shops or universities
  • Close to the train station

You can read more about our Flynn St  property in this post.

Our son and daughter in law have decided they’d like to move back to Albany to be closer to the family. I love this idea for two reasons:

  1. We get to have our little grandson living very nearby
  2. The property will now be rented out at full market rent  (our bank account loves this one too!)

There will be a couple of weeks where the property will be empty. Whilst this would not normally be a good idea, we’ve have planned it this way for good reasons.

  1. We are going to stay in the apartment (thus saving accommodation elsewhere) for about 10 days and will save on accommodation costs elsewhere during the peak holiday season. We’ve got a busy social calendar planned in the city for that time.
  2. During our stay we will also be doing some cosmetic renovations to modernize and improve some areas. This will also justify us being able to increase the rent by $145/week.

Having tenants that are not family members will put an end to one of the biggest mistakes we’ve made over the time of having our property portfolio.

In the meantime I have been working on the following things specifically:

  • Securing a new tenant and completing the associated lease agreements and paperwork
  • Ensuring the property is updated to comply with smoke alarm and RCD regulations.
  • Selecting new carpet for all the bedrooms
  • Liaising with the carpet layers in the city to lay the carpet when we are there (Murray has done this actually J )
  • Obtaining quotes from tradies to replace the shower screens in both the bathrooms. The shower screens that are currently in the bathrooms are old and clunky. It’s an ideal time to update these areas.

Sub-Division Joint Venture in Brisbane

This joint venture deal is progressing nicely. It’s a quick ‘in and out’ type of deal. Buy the land, demolish the existing dwelling, sub-divide the land and re-sell both lots.

We obtained a delayed settlement on the original land lot which means the sub-division approval has gone through before we have even paid for the land.

The two new parcels of land are currently being advertised for pre-sale. The intention is to have the new blocks sold and settled on within only a few weeks of actually having settled and paid for the original lot. By doing this our money is outlayed for only a very short period of time before we receive the profits back. If projected sale prices are achieved, our return on investment will be 15%.

Investigating Other Joint Venture Deals

I’ve been in discussion with other investors who are seeking joint venture partners and if we go ahead with any of these I’ll give you details as they come about over the next few months.

I’ve discovered a great resource to create comprehensive legal documents for loan agreements, power of attorneys, partnership agreements and much more. I’ve used Law Depot to create an affordable Loan Agreement I’m considering with a potential joint venture partner and found it to suit my needs nicely for a reasonable price.

Finding Hidden Money

You’d be surprised at how much money you have lying around in your cupboards!! The last week or so I’ve been gathering up all sorts of bits and pieces and have filled our garage ready for a Garage Sale this past weekend.

It’s easy to spend so much energy on the accumulation of ‘stuff’. And yet really…. What for?? I just feel right now I want to get rid of lots of unnecessary ‘stuff’.

Because after all, the meaning of my life is held within the relationships we have and our experiences rather than the accumulation of material items.

I hope to make a few hundred dollars in exchange for my pre-loved goods. This might seem like an insignificant amount of money; and many people couldn’t be bothered doing something like this.

I don’t need to find money for a deposit or anything like that just now, but if I was this would be a great way to boost my bank balance. This is more about letting go of things that no longer serve our family. And, there are lots of other ways to put some extra cash to good use. Especially with Christmas just around the corner……

Remember: you’re trash is another man’s treasure. Note: The Garage Sale produced a great result of almost $400. Sweet smiley

 Final Lessons Learned In November

Some of the biggest lessons learned during November are:

  • I have everything I need to reach my goals within me.       Reach out to people who can help more often. It is wasted energy to try to solve problems yourself when there are others you know who can help.
  • Planning is everything. I’ve made the mistake in the past of thinking that just because I work on our business and property portfolio from home, that it does not have to be run to some kind of schedule. Because I like a ‘freedom’ lifestyle, for a long time I’ve resisted any kind of schedule. I now accept that a planned schedule (that still includes flexibility) will actually mean I get more achieved and I’ll have even more time to do other things I love to do. This will be a big goal for me moving into 2015.
  • Raise your standards!  This is the only way that you change your life.  Stop doing a “good” or “excellent” job.  Instead, do an OUTSTANDING job.  All the rewards goes to those who are truly committed and outstanding.  I’ve let some good daily habits slip and I am incorporating a new morning ritual that I want to follow more often.  I work out daily and want to eat more healthy foods as a default standard that I follow. You must make the habits you want a MUST and not deviate from them.
  • Energy is everything.  When you’re in a high energy state, everything is possible.  You’ll deal with things totally differently than if you are in a low energy state.  For a relationship to be successful, it requires energy.  For any goal to be achieved, it requires energy.  Energy is life.  In low energy states, that’s when you’ll create negativity and suffer from the negative emotions.  It starts with your body and emotions first thing in the morning.
  • Make your vision for your life clear and compelling.  Focus on that vision at least every week, so you know exactly where you are going.  Your vision and purpose for your life is what will continuously drive you and motivate you towards it.

These are some of the biggest lessons that I stand out for me during November.

Overall, I enjoyed putting this November Project Report together and I look forward to doing another one in the future. I’ve found that this public sharing gives you an important ‘behind the scenes’ look at what can be involved to build and maintain a profitable property portfolio so you can ultimately create the life you want to live. Thanks for reading!

Please leave a comment below or let me know any questions you have.  I’d love to hear what you think!

And pop on over to join our conversations each day over on Facebook.

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Here’s to your success!

Fay McLean

Line of Credit: Important Tips for Managing Your Line of Credit

Important tips for managing your Line of Credit

Line of Credit for Property InvestingManaging the cash flow and allocating appropriate spending in your Line of Credit (LOC) loan is very important, whether it’s for personal or investment purposes.

I would always highly recommend that if you have a Line of Credit set up, that you use it solely for the purpose for which it was originally established. This could be either for personal purposes or for investment purposes.

By correctly establishing the separate loan types into what is personal and investment right from the start, you’ll be able to easily identify which interest expenses are tax deductible.

As soon as you start to pull money in and out of an investment Line of Credit for personal expenses and then repay personal money back in, you start to get into all sorts of mess. And this mess ends up having to be sorted out by your accountant so he is claiming the correct amount against your investment. His extra time and effort will hit your hip pocket in the form of higher fees. So do yourself a favour and stick to the rules on this one!

Line of Credit for Investment Purposes

An investment Line of Credit should be used to invest in assets that appreciate in value. Any properties you buy are a typical example.

You can use your Line of Credit to help meet some of the costs associated with your investments. This will reduce the amount of cash you need to use from your personal savings or regular income.

During any twelve month period there can be large expenses associated with holding your properties such as rates and taxes or an unexpected maintenance issue. Even the lack of a tenant can put stress on your regular income. These are times when it can be useful to have a Line of Credit set up that you can dip into to meet these costs.

Your Line of Credit would also be the account where you deposit your rental income as well as place any tax refund you might get as a result of holding an investment property. Your Line of Credit can also be ‘topped’ up by transferring a set amount of your regular weekly income over to help with the running costs of holding your investment property.

Line of Credit for Personal Purposes

Typically, you would deposit your wages and investment property tax savings into your personal LOC.

However, these investment property tax savings may need to be transferred over to your investment LOC from time to time, to ensure the longevity of your investment LOC.

If you have an LOC set up for personal use, then any interest charged by the banks on this account will not be tax deductible* and will be just like having a credit card bill.

Important things you should know about Line of Credit Loans

Interest will accrue on your LOC and one thing that most borrowers rarely realise is that when interest rates rise and the interest continues to accrue, there will start to be a draining effect on your LOC. If you are not aware of this or you don’t manage it carefully, this situation can quickly bring you to your LOC limit.

You have extra take home pay because of your investment properties. This should not be spent and should be invested back into your line of credit or better still to reduce your bad debt – your home loan.

A Line of Credit requires Discipline!

These types of loans require financial discipline and good budgeting skills to stay within your financial limits. They are a little bit like having access to a credit card with a huge limit.

If you have a LOC set up to help manage your property investments, its rule number one that you must NOT dip into this account for personal spending.

A big mistake many investors make is they see a nice tidy sum of money sitting in a LOC readily accessible and then decide they need a holiday or they want to buy some new expensive ‘toy’. Next minute – boom! The line of credit balance drops and before long they can find themselves having difficulty with the holding costs of their properties and now have no surplus finds to assist.

When a LOC is set up to assist with your property investments it must only be used for that purpose.

Be sure to keep in regular contact with your bank to ensure you are receiving the best interest rate possible. Just this week, for the second week in a row, we have been given a reduction in the interest rate we are paying on some of our loans. I wrote all about it here last week.   I’ve just updated the post to include our most recent reduction.

Line of Credit interest rates

On that note, I’d like to remind you to constantly review your finance structure to be sure it is as optimized for your investing. You can always have a free, no obligation review with the team at eChoice.

*The information in this article is not meant to replace professional advice.

Here’s to your success!

Fay McLean

 

 

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The Most Asked Question: Where To Buy Property?

where to buy property

Where to Buy Property????

Of all the people buying property in Australia at the moment, one in four buyers are looking for investment properties.* Each and every one of them will ask the same priority question – where to buy?????

[box]You’ve heard it said before – “location, location, location”![/box] This old saying is especially true when it comes to buying investment property. If your investment strategy is one of buy and hold in order to achieve capital growth, then your property must be in a location where there is high demand. Demand is directly related to location. So to maximize your profits from property you must buy the best property you can afford in the best possible location.

Here are the steps to follow when choosing a  location to buy property:

Step 1
Learn all you can about the area your looking at. Getting a good sense for what is going on in the area is vital. Get into conversations within the community. Chatting to people like the local corner store, newsagency, local coffee shops will give you loads of ‘insider’ information that can be invaluable. Stop by and spend time with local real estate agents, look through some other home opens and really immerse yourself in understanding all you can about the area.

Use the internet to add to your collection of knowledge of the area.
Sites like house.ksou.cn and onthehouse.com.au can help you to find the price of properties after they have been sold which is often useful.

Step 2
Look for the ‘ripple’ effect. A ‘ripple’ is the area that is next affected by something else. For example, if you take a beach area that is too expensive to buy into, the ripple effect will be the next suburb out.
Inner city buying has always held good returns for investors and quickly becomes unaffordable. On a map, draw a circle that indicates a 5km radius from the city centre, then focus your attention to the next ‘ripple’. That is, the next 10km out. This will still be a good location to identify potentially great deals.
If dwellers can’t have the ‘cherry on top’, then they will always want the next best thing. And that next best thing is often found in the ‘ripple’ area.

Step 3
Look for well established suburbs. These areas have been lived in for a long time and new pieces of land are extremely hard to find, if not impossible. Land sizes are often bigger and have more potential for development. Facilities and infrastructure are all in place and these suburbs are generally highly sought after as places live. This demand will continue to force pricing upwards.

Step 4
You’ve got to buy a property that is close to facilities and infrastructure. When we bought our unit in Churchlands, Perth these were some of the benefits:

  • 200m from a popular small supermarket, newsagency, postoffice, chemist and takeaway food facility. unit churchlands perth
  • 2 main shopping centres – 1 is 2km distance and 1 is 8km distance
  • Bus route right outside the front door to universities, beaches and city
  • Coffee shops across the road
  • 6 mins drive to the City Centre
  • Primary and Highschool within 5 mins drive
  • Two quality beaches within 6 mins drive
  • Local parkland and walking trails 100m away.

These are the exact facilities and infrastructure that buyers and tenants will be looking for. You want to be able to mark off all of these items against any property you are looking to buy.

Step 5
Consider suburbs that are in your price range. Using the ‘ripple’ effect, you may need to go just outside of a hot spot in order to find properties within your budget. Research street by street because while most of a suburb may be out of your reach, there can always be hidden gems to be found if you look closely enough.

Step 6
Look at suburbs that are going through a rebirth. Strongly consider areas that have older buildings that you notice are starting to be replaced with newer ones, or redevelopment. Use data from sources such as RPData, Suburb Reports: Movers and Faders and the local Council to gain an idea of the demographics of an area and see if you can buy a property that is suitable to renovate to the newer demographics of an area.

Step 7
Councils don’t plan on spending money for roads, rail, sporting complexes or other upgrades if they don’t see the demand for it. Make the local Town Planner your best friend! The local planner will share with you what new infrastructure is planned and this will give you an idea of how quickly the capital growth of an area will happen.

Step 8
Look for where big companies are spending their money. Companies like Dome, supermarket chains, Bunnings, McDonalds and others will only set up shop in areas of high growth.

First the suburb – then the street!
Once you’ve nailed your ideal suburb, then drill down to find great streets. Every suburb will have it’s high and low end areas. Go through the same type of considerations mentioned above to help you decide on an ideal street such as your price range and meeting market demand in relation to the demographics.
Talk, look and most of all listen to what locals have to tell you.

Having struck up a good relationship with local real estate agents, you will often find they will alert you to a good deal even before it gets to the market. Either way, once you reach this stage you’re ready to take the next leap and buy a property.

Your journey has begun – and after this one, I hope there will be many more icon_smile

If you’re still wondering if investing in property is even a good idea at all, you may want to go back and read this article: http://propertyinvestingsupport.com/why-invest-in-property/

* Australia’s largest mortgage broker, AFG

Here’s to your success!

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Tax Time!! What Do I Need To Take To My Accountant?

tax timeTax Time!!

If you are on top of your game you’ll already be asking yourself what do I need to take to my accountant to maximize tax deductions for rental properties. If you’re part of the majority – you’ll be quaking in your boots at the thought that it’s tax time once again!

end of financial year salesI spent last weekend swooning around the city shops spending up big in the end of financial year sales. This weekend was struck with reality and the need to finalize my own book keeping before it’s time to visit my accountant.

My dear old father in law never used anything except the good old ‘spike’ to keep his receipts on – bless him. I prefer something I little more comprehensive  icon_smile

This financial year we had 10 properties in our portfolio. Whether you’ve got one, ten or more investment properties, you’ve got to have an organized way to keep track of all your paperwork and finances.

I’ve developed rock solid systems for our investments and business and I have the tools and reports I need to keep track of them.

For years now I’ve used Quicken to keep all our financial records. I love this system. It’s a simple and user friendly way to keep track of income and expenses so you stay on top of your book keeping for tax time. The system also allows for plenty of reporting and budgeting if you want those sort of features too, but I like to keep things as simple as possible.

Getting your tax done by a professional accountant who is familiar with property investing will maximize tax deductions for rental properties and help give you a stress free experience.

There are some fundamental documents and pieces of information you can make sure you have before you visit the accountant. Being prepared will help to keep the cost of your visit down as most accountants will charge you by every minute they spend working on your tax.

Here’s a list to help you get organized and gather the things you need.

Figures and Documents Your Accountant Needs

Asset Register

If you don’t have one of these already, I suggest you make a fresh start on one of these for the new financial year. It’s a register that lists ALL of your assets, including your properties.

In this register you will list the name of every asset you buy, the date of purchase and cost.

You can claim depreciation on your investment properties (and perhaps some of your other assets). Having a register will give you a handy reference for your accountant, and whenever you are required to list your assets, such as on loan applications. Having this register was a blessing when I had a recent telephone call with a broker who wanted all our assets and liabilities.

An asset register is not an essential item for your accountant, but believe me when I say it will make your life a lot easier.

Do the work once and use it over and over again.

Settlement Statements

If you have sold any of your investment properties during the last financial year you will need to take along your Settlement Statement. This will have been sent to you by your solicitor or conveyancer who acted on your behalf at settlement. It will list all the amounts of sale, stamp duty, charges and other important information your accountant will need.

Loan Interest

You’ll want to list all the interest payments you have made on any of your investment property loans.

If you are in the unfortunate position of having some of your properties cross-collateralized, then be sure to divide up the interest payments and allocate the right proportion to each individual property.

Accuracy here helps you determine the true yield or return on investment of each individual property.

Expenses: Travel, Maintenance, Repairs

Some minor expenses for your investment properties may have been paid by your property manager directly. In this case, they will show up on the Property Management Report. You may also have some invoices and receipts for expenses you have paid directly. List these expenses against the correct property.

If you have travelled to see your property at any time (after settlement) it’s likely that you can make a claim against your out of pocket expenses for the trip. Keep and document all fuel, accommodation, meal and other incidental dockets in relation to the trip. Your accountant will determine which of these costs can be claimed.

With properties in our portfolio all across Australia, we can offset some of the expenses on most of our travel against one or another of our properties. Have a good discussion with your accountant on this matter so you know in advance what is claimable and what is not. Often you need to know before you travel so you can be sure you have the correct records to verify your claims, like emails to managing agents or tenants to arrange the visit etc.

Property Management Statements

Most real estate companies are fairly prompt with sending through the end of year Property Managing Statement. This will list all the rent received, any expenses they have paid on your behalf. It will also list their managing fees. Your accountant will need all these figures to complete your taxation return.

Depreciation Report

After you settle on a property, you should order a Quantity Surveyor to complete a depreciation report. The report takes into consideration two main elements:

  • Capital works allowance; and
  • Plant and equipment.

From this report, your accountant can make a calculation for an ongoing tax deduction year after year for a limited time.

The first time you include a newly acquired investment property in your taxation claims, your accountant will need the Depreciation Report to refer to. From that point onwards, calculations can generally be made based on the previous years taxation records.

I love to maximize tax deductions for rental property. Our property portfolio has helped us legally reduce our tax by thousands of dollars over the years. This is a good checklist I use every year as I gather what I need to take to my accountant at tax time. I hope you find it useful too icon_smile

I’m happy to pay tax, but see no point in tipping the tax man! What about you?

Leave a comment below, and feel free to share this information with others who may find it useful.

Here’s to your success!

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Watching House Rules Episodes: The BEST Way To Spend Your Time….

house rules episodes teamI really don’t watch much television at all, but every now and then I get sucked into watching one of these reality Australian renovation shows. (Damn it!) At the moment I’ve been watching the House Rules episodes. I justify my actions by claiming it’s research for my businesses (my blog here and our property investing). And that’s why I just had to write this post.

In fact, that’s exactly what I want to encourage you to do – use the show as research.

It’s no secret that these Australian renovation shows are scripted and edited to maximize a captive viewing audience. While there are a lot of tears and tantrums to wade through during the House Rules episodes, if you look deeper, you can find some golden nuggets that will keep you on track with renovations for your own home or investment property.

The House Rules Episodes – Lessons You Can Learn

These are the things I see as the major points to learn from this show:

Budget: I’d like to say there is something to be learned about how to budget your renovation. But unfortunately as we are never told what the teams have to use as a budget, I’ll have to pass on that.

Styling: The teams usually do a total demolition on each House Rules episode. Not every renovation you do will need that. What is nice, is seeing the completed rooms and the ideas teams have for styling. (Not all of them are great though!).

If you listen to the judges comments you can pick up small tips and tricks that work well in different areas.

Functionality: Look for things that make an area functional (or not). Small things can make a huge difference, such as oven or patio doors being able to open properly; the level of lights or shower heads.

I know it sounds like it’s too simple, so here’s a real life example. Last week I went to visit a girlfriend who had just moved into the dream home she and her husband had just finished building. My heart sank as she explained her disappointment in one particular area…. it was not until she went to put her new furniture into the lounge area, she realized it was not even big enough to fit a set of sofas, let alone the TV cabinet or coffee table. So now, it’s a small sitting area for two – not at all what they had planned.

Colours: Take notice of how different colours create different moods. People get told this all the time but seeing it in action always has more impact. Not all the colour choices on the House Rules episodes have been great.

I did love the colour Antique White that was used on this weeks’ episode, and have used a very similar colour myself called Hogs Bristle Quarter Strength in a cosmetic renovation. These are great colours for creating a crisp, clean and bright atmosphere.

Theme: It’s interesting to see how a theme, or in the case of this renovation show, the ‘5 House Rules’ can affect the whole outcome of the renovation. The ‘themes’ for the home renovations have varied from ‘farmhouse’ to ‘junky chic’, to ‘Bahamas’.

The completed rooms in each house have not always flowed as well as they could because of the nature of the competition. You however, have the chance to choose the theme or style for your property. Run it through the entire home to increase the impact of your whole renovation.

Renovate For The Owner: Every renovation on the House Rules show has been purposefully done with the owners in mind. This is a really important thing to remember.

It’s so easy to renovate for what YOU want. But if you are renovating for profit (and you should be), lots of thought needs to go into WHO will be living in or renting the finished property.

Are you renovating in an area where families are living? Is it likely to be young professional couples who tenant your property? The demographics of the suburb you buy in will have a huge impact on how and what you do during a renovation.

Be sure to do your homework first!!

House Rules – Final Thoughts

Sitting back at night with my cup of tea and feet up has been a fun way to reinforce some of these fundamental rules of renovating. It’s been great to see how much value has been added to each teams’ home and I’m sure you would agree, that despite faults, bad colour or design choices here and there – all teams have ended up with a home that is more functional and nicer to live in than what they started out with.

Although I’ve only done minor cosmetic renovations, I know several people that have had great success with renovating for profit. And I know some people prefer having a structured process that takes them from property selection through to working with their tradies etc.

I’d actually love to do a larger renovation at some stage in the future if it fits into investing strategies. I’m currently working on our buy and hold strategy and starting a property development joint venture, but at some point I may include a structural renovation. The way we’ve been investing up to this point as been super easy, so I’m interested to see if a renovation can be just as easy – or more complicated.

Here’s to your success!

Fay McLean

 

 

P.S. I would love to hear your thoughts on the House Rules episodes, and on your renovation project in general. Do you find them complicated? Do they work for you?

Home Renovations – Renovating for Profit On A Budget

home renovations - renovate for a profitIf you are considering doing some home renovations, renovating for profit doesn’t have to mean you spend a fortune. In fact, some of the most simple and cosmetic renovations can achieve the biggest impressions and improvements to the look and feel of your property.
Renovating a home is an investment strategy that appeals to lots of people. Spending some money, time and energy on doing a place up and selling it off for a profit is a great way to boost your profits from property when done correctly.

Renovating For Long Term Equity Gain

You can also improve your profits by doing cosmetic renovations and upkeep on a property that you keep long term. Smart renovating can lead to capital growth and strategic improvements can be a good precautionary measure against maintenance issues on a property you intend to keep for a while and rent out.

If you have a buy and hold type property, unless there are major issues, it can be easy to ignore some ongoing maintenance tasks. Regular contact with your property manager should keep you informed of larger maintenance issues as they arise. But let me tell you that your property manager and you don’t always have the same standards when it comes to what is acceptable. We’ve certainly experienced this ourselves!

We were receiving our property inspection reports which seemed to be getting progressively worse. We decided to personally visit the property and found the dirt and state of the walls and paint work was disgusting. After studying Jane Slack-Smith’s Ultimate Guide To Renovations, we decided the next time the property was in-between tenants, we would go in and give the place a quick cosmetic reno.

You can watch the video to see our fabulous results.

Home Renovations - Renovating for Profit in Mandurah

Beware!! Renovating for Profit On A Budget Does Not Work……

Unless….. you follow these three guidelines:

1.  Stay to Budget By HAVING a Budget!

Remember that renovating strategically isn’t about painting a wall and calling it a day. It’s about a careful consideration of adding real value to a property in the market, and that takes some homework as well as sweat equity.

Take a checklist around the entire project and mark where you intend to spend money.  You can start today by downloading this Sample Renovation Checklist and Renovation Summary Guide  immediately. You can see how detailed your costings need to be. Divide your list into ‘wants’ and ‘needs’. Every likely cost should to be added to a spreadsheet plus an amount for ‘variance’.

You should then consider how much you think your improvements will add to the market value of your property to determine if the whole exercise will actually result in a profit. Additional fees and expenses such as agents fees, marketing and stamp duty all need to be taken into account.

Plenty of people have an appetite for doing a place up and selling for a profit. But not doing enough prior planning or keeping track of the numbers is one of the reasons why renovation costs can blow out and a disappointing profit margin can be the result.
Any time you are spending money on a property you want to be sure you’ve done a good feasibility on the entire project!

2.  DIY Home Renovations

There is a saying ‘money makes the world go around’. I will be the first one to suggest you save money on your home renovation wherever you can. But unless you are a skilled tradesperson, it’s likely there will be at least some tasks required that don’t fall within your expertise. The best thing you could do is to employ a tradesperson to do the work for you.

DIY renovating can certainly save you dollars. It can also cost you big time if things don’t go to plan. You might take weeks to complete a task that a tradesperson can get done in a matter of hours or days. A task completed quickly and done to expert standards will mean you can move forward quickly. This can become extremely important if your objective is to get the property tenanted or sold.

Every week the project goes uncompleted, you could be paying additional interest if you are borrowing money to do the renovation in the first place. As you create your feasibility, you may be surprised to find DIY renovation costs are higher than you expect.

3.  Renovate for Profit – Where To Start

The key lies in understanding which improvements will return you the highest possible profits. As you can see in our recent renovation, paint is inexpensive and can instantly create a fresh, new look. Despite my earlier suggestion to avoid DIY, painting is relatively easy to do yourself and you can save lots of money. Even if you do need to pay someone to do more difficult areas or outside work you will most likely get back more than you spend.

The other big money spinners are kitchen renovations and bathroom renovations. These rooms will definitely start to chew up your budget though. So again, lots of planning and cost analysis is important before you even begin. Carefully consider the demographics of potential buyers or renters to be sure you meet their needs. Get several quotes before you commit to the task. https://www.hgquickquote.com.au/ is a great place for finding qualified service professionals to quote on your home renovations.

If you buy a property and plan to renovate for a profit, it might be in a cash chunk from a sale or from a rise in equity in your buy and hold property. Either way, check your tax obligations and entitlements here.

Any More Home Renovations?

We have a townhouse in a suburb just 6kms from Perth City that our children currently rent from us (that’s another story!). When they re-locate in six months time, we plan to use the process within The Ultimate Guide to Renovations (TUGR) again to create a more extensive cosmetic renovation. This renovating course has been incredibly comprehensive and so motivating. Following TUGR guidelines will mean we can significantly raise the rent and increase our equity. That’s what I call renovating for a profit! I can’t wait to get started!…

Jane Slack-Smith has a FREE chapter of her new book available at the moment. It’s all about renovating for the investor and home owner. Grab it today. I’m confident you’ll LOVE it as much as I do!

Renovate For Profit: DIY Renovation Case Study

Let’s go behind the scenes of a recent DIY renovation Murray and I did on one of our properties.

This is a 3 x 2 townhouse that is currently part of our property portfolio. It is in Mandurah, Western Australia.

Property to renovate for profit return via increased equity

After receiving property management reports that were becoming less than favourable, we   decided to do a personal inspection of the property and could see immediately that there was a need for a light cosmetic renovation.  With a small break in between tenants, we jumped in to give the place a quick DIY renovation makeover.

These three videos take you through our process from when we first arrive at the property right through to when we leave.

At the end of Day 1.    You can see I’m tired and exhausted but got loads done 🙂

The finished project. Great results and happy!

Buying or owning a property is no different from the car you drive each day. It needs attention and maintenance to keep it in top condition. The occasional DIY renovation will help to keep your property in tip top condition.

Here’s to your success!
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P.S. If you decide a renovation is right for you, be sure to grab the FREE Chapter of Jane Slack-Smith’s new book “Your Property Success With Renovations“. I think you’ll love it!