Hey there! Naomi Findlay here, ready to set you up with some more tips on renovating for profit.
Have you looked at the six elements of rapid renovation? Have you figured out your goals and ambitions for your next renovation project? Have you kicked those fears and insecurities in the butt and brushed up on your time keeping skills?
If not, have a look through some of my earlier tips to help kick-start your renovation journey. If you’re all caught up and have done your homework – awesome. You’re almost ready to begin.
Or maybe you’re still wondering, “but how do I get to the next step?” or “how do I treat this as a serious project and not just a hobby?”. Maybe you’re even thinking, “wait, there’s more? Do these steps ever end?!”
Yep, there’s definitely a lot to think about, but you don’t have to feel overwhelmed by it all. That’s why I’m here, to be your helping hand and give you the guidance for a smashing Reno.
Ok, so let’s get going.
But wait, what exactly is the next step, anyway?
Well, once you’ve brushed up on your comms skills and gone to enough yoga classes to be a zen master, it’s time to nail the business part of things.
First step’s first.
1. Setting up your finances with a personalised touch
If you treat renovating like a business, it will reward you like one. So, when setting up a business, what do you need to need to do first? Well, for one, you need to arrange your finances to be able to get the business up and running. Where do you get the finances? From a bank or lender, that’s pretty straightforward.
But what sort of finance do you need, and how should you be setting your funding up? Are you going to put it in your name, in your company’s name, or in the name of a trust? This is when it can get a little tricky. Sure, your brother or uncle or a good friend might tell you how THEY set THEIRS up, but that’s the key here, isn’t it. That was how they did it because it was the best thing for THEIR circumstances, but would it be the best for yours? It might not be.
Remember how I spoke about personalising your definitions and goals? Well, it’s the same thing in this case. You need to set this up to suit YOU.
Who can help you figure the finances part out, then? A professional, of course. I can help you with the renovating side. And although I’ve renovated enough properties to have seen all sorts of financial arrangements, I can’t give you personalised financial advice.
An accountant, on the other hand, can give you advice on the tax part of financing in a particular way. A lawyer can talk you through the legal side of it, and an insurance broker can… well, tell you about the insurance bit!
Finances sorted, moving on to the next step.
2. Choosing the right business building blocks
It’s kind of like Lego – your kids are building a tower out of those colourful blocks, and that one green brick is just too small to fit the rest of their creation. It’s not a good fit, and if they didn’t notice it sooner, it might mean the whole tower ends up falling down (hopefully they’re not too upset by it).
The same goes with “adult” Lego – in this instance, your business. It’s super important to get the fundamental building blocks right and not just poke around in the dark hoping all the pieces will somehow fit together.
This structure – the building blocks of your business – is personal to you. It relies on your circumstances, what you already have in terms of money and assets, for example. If you’re a guru-mastermind-chief of everything business, great! Otherwise, if you’re lost trying to decide between a partnership, trust, company or all the other seemingly endless and confusing choices, it’s best to speak to a pro.
And yes, it will cost you some money to take this initial step. But remember I previously spoke about leaving the professional stuff to the professionals? That definitely applies here. Save your precious time and energy, and you will save your sanity and money in the long run.
Building blocks in check? Great, now let’s jump into some asset protection.
3. Protecting your hard-earned dough
This part is not about hiring some dodgy-looking body guards or buying a couple of nasty-looking Dobermans. You don’t have to buy a gold chain and walk around with a suitcase handcuffed to your wrist.
Asset protection has nothing to do with looking after your backside either (although in Kim Kardashian’s case it might). It’s all about making sure you reduce the risk of someone coming around to try and undo all your hard work. Essentially it’s a buffer zone, designed to stop creditors coming at you and your money with their guns blazing.
It can be really tricky trying to cover yourself and your business from all angles. This is where a lawyer comes in handy. He or she can explain all the legal mumbo-jumbo and set up some barriers that will work best for your business structure. Definitely better to be safe than sorry.
Fly/creditor-repellent set and ready? Here’s the last one to get sorted.
4. Set up a renovation safety net
Picture this: your carpenter is walking along, and suddenly, bam! His leg falls through one of the rickety old floorboards. The friend helping you out with the paint job accidentally knocks the paint all over the new carpet. And then the kids in the street playing cricket put a hole in your window.
Extreme, right? But anything can happen, and at any time. And just like you wouldn’t skimp on insuring your own home, you wouldn’t leave out insurance for the one you’re renovating.
Just be sure when taking out that cover, that you let them know the property is being renovated. Believe it or not, many insurers don’t actually cover your property during the upgrade period. And it would be horrible to be paying for something, only to find out that the damage caused by the kids and the friend and the carpenter wasn’t covered because you were in the process of “renovating”.
So how do you find the right insurance for the job, then? Flavour of today’s post – get some professional help. An insurance broker is your whizz for all things insurance. Let them point you in the right direction and give you one less thing to worry about. The kids can go on with their cricket game.
And on that note, I’ll leave you with your homework. If there’s one thing to remember from today, it’s that professional help when setting up your renovation business is worth its weight in gold.