Howdy my fellow reno buddies! It’s me, Naomi Findlay, back for another round of renovation rodeo.
Like a true cowboy, you’ve already rounded up your leads and whipped your strategy into shape.
Now that you have those two things locked and loaded, let’s zoom in a little.
Let me ask you this: how are you going to figure out whether that property that you have your eyes on is the right one for your strategy?
Pick one of the properties in your leads basket. This isn’t the catch all basket, it’s the small basket at the end of your sifting production line. You’ve already chucked out the properties that didn’t suit your patch or your budget. These are the leads that made it through to the final round.
For example, if you are looking at a family neighbourhood, the leads you would have filtered through to this “golden” basket are the four-bedroom fixer-upper homes. They’re just perfect for George and Lisa and their kids, who are your target market. Those properties found on a major road or near the waste management plant in the area would have been given the boot by now.
As would the ones that are way out of your price range. Last time I spoke about working out your buy and sell price – these are the simple but important calculations you should do to help your work out whether that particular renovation project would be worth it.
Don’t have time to watch? Listen on-the-go here!
So, what now?
Now you get to whip out a magnifying glass and really take a good strong look at your potential renovation project.
And you need to make sure you do this part before you hand over any money.
Otherwise, what’s the point of jumping on the renovation horse if you’re only going to end up getting thrown off into the mud?
So, how do you know what to look for with that magnifying glass?
I spoke about the importance of a good and solid property inspection in an earlier post. Stuff like looking beyond the number of bedrooms a place has or how big the kitchen space is. In that post I mentioned three super handy points that many people might miss when inspecting a potential renovation project.
To give you a quick recap, these are the three questions you should be asking yourself as part of your own property inspection:
What is the overall appeal of the house?
What are the surrounding properties like?
What is the access to the property like?
Beyond those three things, there are tonnes of other questions you could and should be asking yourself when you’ve got that magnifying glass pointed at a property.
To help you from getting overwhelmed and throwing in the towel, I have a very detailed list of all of these things in my Rapid Renovation Formula.
Now, to get into a little more depth on the sort of stuff you should be looking at, let me ask you this first question:
1. What would turn YOU off from wanting to live in that property?
I’m not asking you if the property is perfect – you’re not looking for a ready-to-move-in home. You’re looking for one that you can add value to.
But there are certain things that are out of your control. And no matter how much money you throw at making the kitchen beautiful and the entertainment space one to die for, they will limit how much you can make from your renovation.
Is the road a super busy one, even though it’s not a major road? Does this mean the traffic would get so bad during peak times that you wouldn’t be able to leave your driveway to pick the kids up from school?
Yes, you may have already filtered out the properties that are smack bang in the middle of a major intersection or on a busy road. But maybe this road is used as an alternative to bypass all the peak hour traffic and becomes super packed as a result?
Has the neighbouring property been demolished? As there muddy trenches and piles of rubbish lying around on that empty block of land now?
This might make your renovated beauty look even more amazing because there’s nothing next door, but it may also stop people from giving you a good price for the place because they don’t want to live next to a bunch of noisy construction works for the next 12 months. Or a large apartment block after that.
Obviously, these things are out of your control. But with a few good drive by’s during peak hour and a deep Google search you should be able to work out any of these “external” downsides of your potential renovation project.
The second question you need to consider is this:
2. What are the main structural things that would eat into your budget, if missed?
I have mentioned this before. Fixing cosmetic things like painting walls and adding pretty cornices if fairly cheap and easy. These things are a quick fix that won’t eat into your budget.
If you overlook a wall that needs a paint job, it’s no big deal. All you would need to do is allocate a little bit of your buffer cash to this extra wall. At the end of the day you won’t be out of pocket and will still be on track to finishing the renovation on time.
If, on the other hand, you buy a place and miss the crumbling foundation piers under the house, you would be a little more out of pocket than an overlooked paint job.
If there are 9 supporting pillars and 8 of them are looking like a light breeze might be the end of them, you will need to repair them as soon as possible. These kinds of more serious repairs will mean forking out a substantial part of your budget and a potentially longer timeframe to finish the overall project. And time equals money.
The same goes with any cracks on the walls and roof – you need to take the time to dig deep and make sure that these cracks are of the hairline variety, not the foundation issues variety.
Remember, there’s a difference between planned and unplanned structural works. Knocking down a wall to put in a bigger kitchen is what you want, because it is already part of your overall strategy and budget.
Fixing a crumbling wall on the other hand, is more of a spanner in the works, and can mean that your end profit suffers because of it.
It may sometimes be a little tricky to really look at these all these things in detail, especially if the property is filled with furniture and a giant glass display cabinet is taking up a whole wall.
But gathering as much of this information as you can before signing on the dotted line will mean you are not caught by surprise later down the renovation track.
Remember, the goal is to renovate for wealth, not to get any early grey hairs.
So, pull out that magnifying glass and get cracking.