Are you a newbie property pundit wanting to ensure you make a reasonable profit after renovating your fixer upper? Then listen up.
I will provide you with valuable insights and advice to help you renovate to profit… and not kill the relationship while doing the renovation.
On this point, couples separating while doing the property renovation biz:
- Cherie Barber and Stephen Tolle. Early days.
- Christina Haack & Tarek El Moussa (then Ant Anstead, now married to Joshua Hall).
- Troy and Beck from “House Rules” 2017 – broke up during the renovation show.
So, protect your sanity and ensure you are a solid team, if you are currently partnered.
Finding the Right Property
When it comes to finding a fixer upper house, it’s important to do your research and due diligence. Consider the location, market trends, and potential for growth.
Look for properties that are undervalued or in need of repairs, as these often present great opportunities for profit. Sometimes just the landscaping is terrible, and a few thousand dollars can mean much more in profit.
One way to find fixer upper houses is by building relationships with real estate agents who specialise in investment properties. They have access to listings that are off-market, and if you are serious, can help you find properties that align with your cheap-and-cheery investment goals.
However, remember that real estate agents work for the VENDOR. So if you are cashed up but time poor, consider using a Buyer’s Agent. They work to get the best price and save you time.
Yes, real estate platforms and property investment finders (software) can be valuable resources for finding fixer upper houses. These Domain or RealEstate type platforms often provide detailed information, including photos, descriptions, and even virtual tours. What the public-facing websites won’t tell you is a decent estimate on the House’s true value.
The value provided by these websites is calculated based solely on median suburb value – which is often dangerously high for ‘daggy’, old, run-down housing. In addition, sometimes agents have got little past sales in the suburb for ‘comparisons’ when doing pricing and so get it completely wrong.
Here is an example of an over-valued fixer-upper: https://www.realestate.com.au/property-house-qld-narangba-144258476
Compare this with a reasonable pricing, considering the 722m2 land, needing landscaping and new ceiling: https://www.realestate.com.au/property-house-qld-caboolture-144213532
Narangba and Caboolture are not that dissimilar.
Don’t forget that retail shops can also present as a fixer upper, though with a bit more leasing risk. It also comes with leases of 3 and 5 years and less hard costs, like water supply, which is a big plus.
Flipping for a Living
Guys, you can get inspiration and tips from the creative renovator Tarek El Moussa (from Flip or Flop).
See https://www.thenile.com.au/books/tarek-el-moussa/flip-your-life/9781399815970
Renovating for Maximum Profit
Once you have acquired a fixer upper house, the next step is to renovate it strategically to maximize your profits. Here are some tips to consider:
- Focus on the essentials: Prioritize repairs and renovations that are necessary for the property’s functionality and safety. This includes fixing plumbing issues, electrical problems, and structural issues.
- Enhance curb appeal: First impressions matter, so invest in improving the property’s exterior. This can include landscaping, painting, and repairing any visible damages.
- Upgrade key areas: Identify the areas of the house that potential buyers or tenants value the most. Kitchens, bathrooms, and living spaces are often the focal points. Consider upgrading fixtures, appliances, and finishes to attract buyers and increase the property’s value.
- Stick to a budget: It’s easy to get carried away with renovations, but it’s important to set a budget and stick to it. Calculate your expected return on investment for each renovation project and prioritize those with the highest potential for profit.
Ensuring Profitability
While finding the right property and renovating it are crucial steps, ensuring profitability requires careful planning and ongoing management. Here are some additional tips to help you:
- Know the market: Stay informed about the local property market and keep track of trends and changes. This will help you make informed decisions and adjust your investment strategy accordingly.
- Consider rental potential: If you’re planning to rent out the property, research the rental market in the area. Determine the potential rental income and factor in expenses such as property management fees, maintenance costs, and vacancies.
- Build a network: Connect with other property investors, real estate professionals, and contractors. Building a strong network can provide valuable insights, recommendations, and potential partnerships.
- Regularly review and adjust: Continuously evaluate your investment strategy and make necessary adjustments. Monitor the property’s performance, review financials, and consider refinancing or selling if it aligns with your long-term goals.
Remember, investing in fixer upper houses can be a rewarding venture, but it requires careful planning, research, and execution. By following these tips and staying informed, you can increase your chances of finding, renovating, and ensuring profits on your Australian property investments.