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Are you wanting to jump into renovating for wealth but not sure how much money you can really make? Are you wondering whether it’s even worth renovating when the current market prices are already so high? Or are you worried that you might not see a return on your investment if you buy and renovate?
Well, today I wanted to give you a few tips to make sure you go into the renovating game prepared.
Or listen to the audio below …
Now, I know shows such as The Block and House Rules have made the concept of renovating for wealth extremely popular. They make it look like anyone with a hard hat and a shovel can just come into an old place, transform it, and spend the rest of their days sipping martinis from a hammock in Hawaii.
Sorry to burst your bubble, but it just isn’t that simple–if it was, everybody would be doing it, right?
So, what’s the goal here?
1. Secure a property that fits your strategy at the right price.
It’s true that the current property market is pretty hot (Sydney and Melbourne, I’m looking at you). Property prices are rising and there can be some pretty fierce competition to secure a property at the right price.
But that doesn’t mean you should just throw in the towel and walk away from it all. Yes, the market is hot at the moment, and that can make finding the ideal renovation property trickier. But that doesn’t mean that these gems don’t exist.
Now, when the market is cool, it’s easy to pick up that dream renovation project. There aren’t many people biting, so you can be sure to find yourself a bargain. But at the same time, this can mean that there isn’t much bite when it comes to selling the property. In a hot market, people will be jumping over each other to buy a well renovated property.
So, you see, there really isn’t a “bad” time to renovate–it all comes down to choosing the “right” property.
2. Do your research.
There are many factors to consider when looking for the perfect renovation project. One of the most important things you can do to prepare for your renovation journey is to RESEARCH. There’s nothing worse than blindly jumping into a renovation project just because the kitchen needs to be redone in the first open home that you’ve seen.
You need to look at it from every angle: Who are you renovating for? What are you planning to do with the property once you’re done with it? Does it even suit your renovation strategy?
Don’t fall into the trap of compromising for something that doesn’t fit within your goals and strategies just because it’s going for a good price. If your strategy is to transform a 4- bedroom home into a luxurious open plan masterpiece for families, don’t jump on the first bargain 2-bedroom villa you see; it won’t work with the strategy you have in place and you will end up wasting time, energy and money–and your end profits will suffer as a result. So, how do you find the right property at the right price?
3. Your patch is its own market.
Now, this second point is about focusing your efforts on your particular patch. Every day a new article gets released on how crazy Australia’s current housing market is. And that may send shivers down your spine and have you second guessing your decision to renovate for wealth.
But, what are these articles actually saying? Are they saying that every single apartment, villa, house and caravan is ludicrously overpriced and out of reach in every single suburb across Australia? No.
Yes, Sydney’s Bondi may be experiencing a surge, or Melbourne’s Toorak may be as expensive as ever with its mansion-lined streets. But these are just two suburbs in a sea of thousands across Australia. And just like no two properties in two completely different suburbs can be compared for price or demographic, you can’t just put the whole of Australia under one blanket. And if you have already done your research, you would have realised that there is no reason to let these types of generalisations scare you.
Australia is made up of thousands of “micro” markets; each state is its own market, each city is its own market, each suburb is its own market, and even each street could be its own market. Just as two regional cities will be their own markets, so too can two apartment buildings in the same block.
Your patch is its own market, and can and should only be compared to similar properties within that patch. And that’s because there are so many variations within buildings, streets, suburbs, towns and cities that you will always be able to find something that suits your patch–provided you do the research.
4. Remember, your patch doesn’t have to stay the same forever.
If you decide on pursuing a particular area, that doesn’t necessarily mean you have stick with it until the end of time. Markets change, and so can you. So, if an area you’ve been looking at stops aligning with your strategy, feel free to move on and find one that does align.
Or perhaps, after a few renovations, you decide that the market in an area has shifted, but you want to stick with it–you can! Just be sure to adjust your strategy instead. Keep in mind that if you want to be able to shift your patch and strategy to fit changing market conditions, you will need to keep on top of any changes. And that means? Research!
That’s the great thing about renovating for wealth; there isn’t a one-size-fits-all strategy, and neither is there only one strategy to profit. If your only income stream depends on the market rising, then you might find yourself in some trouble when if and when it starts to cool. Renovating for wealth, on the other hand, ensures that you can mold and adjust to the market, so that you are guaranteed a profit whatever the current market temperature.
So, there you have it; four tips to help you renovate for wealth in any market.