Maria Burwood is the founder of Showcase Renovations. An elite team member in the Wonder Women program of The School Of Renovating. Maria is a passionate renovator, engineer and project manager with over twenty years experience in the industry.
On today’s episode,
Bernadette interviews Maria Burwood. They discuss her most recent renovation project – a three bedroom penthouse spanning two floors of the Woolloomooloo Finger Wharf in Sydney.
Listen to Episode 3: The Trials And Tribulations Of Renovating On Finger Wharf – Interview with Maria Burwood:
- How Maria secured a property originally planned for a family home renovation and why she decided to flip it
- The 3 major challenges Maria faced in renovating a heritage listing
- Why Maria gave all the reins to one builder and project manager and how it became a success
- Maria’s approach to an apartment without an outdoor area and how she used a palette of natural materials and resources to make it work
- What Maria would have done differently if given a chance
- The financial outcome of the project
- How a private buyer’s agent managed the selling of the property and the flow of buyers
- Maria’s motto, “Making Success Seamless”
- How being a part of Wonder Women has helped her achieve renovation success
Bernadette: I’m Bernadette Janson the founder and CEO of The School Of Renovating.
Today I’m speaking with Maria Burwood. Maria is one of our Wonder Women. She’s part of our elite program. Maria is an incredibly motivated and accomplished renovator. And I’ve asked her here today to talk about her recent project, which was a bit of a challenge. I think there’s a lot we could all learn from it. Welcome Maria!
Maria: Thank you Bernadette. Thanks for having me here today.
Bernadette: Before we start would you like to just share a little bit about yourself.
Maria: Yes. Well, so professionally, I’m an engineer and a project manager. And in my off time, I’m a veteran investor and an absolutely passionate renovator. I’ve been doing this since I was 16, when my parents pretty much dumped me into a project, that was a debilitated old building where they didn’t have time to manage, and it spurred my passion. Besides that I am the modern Brady Bunch family. We have four children under the ages of 10, and my husband is also an engineer. So we’re keeping everything in the family.
Bernadette: We’re going to be talking about a specific project today. Would you like to share what that project was and how you came about securing the property.
Maria: Yes. So my last project, which I also consider a little bit of a crown or a jewel in my crown, is a penthouse, a three bedroom penthouse, which spans two floors of the Woolloomooloo Finger Wharf. It’s the iconic Wharf. And what I really loved about it when I first saw the property is that it comes with such a rich history. And it’s the only structure in the world of its size. That’s made completely out of wood and is over 100 years old. So we thought, you know what? Let’s make this home. And we pursued the property, and it was a little bit of a challenge at first, because before we went into it we realized it’s going to have to be renovated to make it our home. And there was a lot of discussion to negotiate the prices down, simply because there was so much that had to be put into it to make it livable. Being a wooden structure, it was leaking. It had fire safety issues. So there was quite a bit, but we saw the potential in it.
Bernadette: Okay. And so that was originally going to be a family home renovation.
Maria: That’s right. It was going to be, like I mentioned, we fell in love with it and we thought, you know what this is? We need a place for our family to grow big into, as well as we wanted to make this offer of a home. And we really saw the potential in it. And I stress that because we are in a way got blinded by it, and made rookie mistakes that usually an investor makes when he goes in, and sees a property, purchases it for the potential, rather than also considering the target around it. And once we had it all designed exactly for our needs and purposes, what happened was we started spending more time in the area and realized it doesn’t fit our family. It’s not a young family place. It’s more an entertainer’s place. So our intent quickly changed and we realized, we have to just flip it and move on. Now to do that, that was a challenge in itself because we’ve had it all designed. Everything was done and paid for and ready to go, we’ve even had the approvals through, which in a structure like that, I’m sure you can appreciate, were a challenge onto themselves. Wasn’t actually the heritage listing that was the problem, it was associated with keeping the structures integrity, as well as fixing the original mistakes with it.
When Meriton came in to save it from being demolished and design into an apartment block. So then we were faced with the task of basically redesigning it. And since we made it into a flip. We had to consider also the financial aspect was no longer about spending on what was for us, but what was going to return a profit. So price came into it and we had to be quite savvy to do that. We actually redesigned it all ourselves and we being part of the Wonder Women program is fantastic, because you’re able to have this supportive team with amazing ideas, we can bounce them off each other and suddenly realize that, that’s it. This is unique. This is the x factor. Let’s go. So yeah, that’s how the intent started and changed.
Bernadette: Great. Would you like to elaborate a little bit more on what the challenges were in renovating in that particular building?
Maria: Oh I laughed because I think, it’s almost better to ask what wasn’t a challenge in that building.
But you know it really made me a stronger renovator. But also really appreciate the details that are required, that you maybe take for granted if you’re doing it, as with more experience. The major challenges, I mean are limited to the three major ones. Because from them really everything stemmed. I think it really came down to the building, the original building being such a wooden structure that called for, out of the ordinary approvals, we needed body corporate. We need a building management. We need strata and we also needed structural engineers. Fire safety engineering, acoustic engineering beyond what an average strata requires. So these ones were very specialist hand-picked teams, that set on the building committee, which only met every so many months. And this prolonged everything, and of course it increased the costs. But things like that, you expect that in building a renovation.
What we didn’t expect was that the rules that came with approvals were that you had to appoint trades and a builder. That was sort of pre-screened and pre-approved by the committee. And, as an analogy that’s like saying wedding in a florist, the prices just got exponential.
And actually in my experience I find that suddenly the level of detail, or the attention to detail, and somebodies actual will to help you also alters, but not necessarily in a positive way. I think maybe there’s a little bit of stigma of you can afford it, and we can make money on it, and this will bring me on to another point later.
But the second challenge which arose from that was being that this was going to be a home. We actually decided we were going to have it project managed by an external party, because we were time poor, and this wasn’t going to be an investment. Now that it’s an investment, are still being time poor, we had to go with this plan.
And unfortunately, I say unfortunately because we had a project manager and the builder. But he is a classic professional in his trade. So what happens is they are good at this skill, and that’s what they are focused on, on the site. They don’t then have time to go and see what everyone else is doing and supervise it, see the little details that may or may not be going wrong. They are on the tools as they say. And this actually posed surmountable problems for us, and more to the classic mistakes that we made was, we assumed that he could be trusted, that he schedules everything were real. He does his mistakes 101 for building, he failed to actually follow the schedule. He didn’t make any orders, he didn’t actually had anyone come to site, the budget blew out, the time scales blew out, and it was just a disaster in that respect. And we decided to, about in the fourth month, which was already one month over the project date, we’re going to have to step in and we had to go in.
Basically I hired a dedicated onsite manager, who was one of our Wonder Women and together we really worked hand-in-hand to just complete the whole project in three weeks. 85% of the entire build in three weeks. So there was an unsurmountable achievement, but it was just the little details that we were able to integrate. That we thought aren’t going to be possible suddenly became possible. So this was a huge win.
But that brings us to the third challenge, because the builder didn’t appreciate us doing that. And still felt he should be paid for the job. And with the building, we didn’t just need to get approvals before the renovation. This building required, not so much approvals but clearance that everything is okay. We had to sign a clause that if they do not find the property sufficiently to their standard, we have to actually start again. This was kind of scary to us. You can imagine.
And our builder was holding, being the body who subcontracted all the trades. He held all the certificates, all the insurances, so we had to pretty much give in to his blackmail. Because there’s no other word for it. In order to get this project across and be able to sell it, we could do nothing without these documents. So these were the challenges. And as you can imagine other things spin from that.
But that’s pretty out there.
Bernadette: So that’s a huge achievement to be able to rein that in. Because the role of the builder and the project manager is, it’s a role of trust. You’re really entrusting a lot to them, and to have that person go feral, for want of a better word, can be quite debilitating. So well done.
Maria: Thank you. Yeah it does feel like an achievement I have to admit.
Bernadette: Yes, on such a tricky project. Very well done. And so now I know that the apartment didn’t have an outdoor area. Now these days we say like in terms of renovating, the indoor-outdoor thing, it’s almost mandatory. So how did you deal with that?
Maria: It’s a very good question actually. The fact that we didn’t have a balcony or the elephant in the room became really apparent the minute we decided to change our intent with the property. Because like you said, apartments suddenly on the walls, come with open decks exclusive water views and we had the water views. We didn’t have the open deck. So, we thought about it and I decided that one feature is, let’s not focus on what we don’t have. But really enhance what we do here, which is the exclusivity, the luxury, the uniqueness of the property. And overshadow the fact that we don’t have that outdoor living, and the way I did that, was by bringing the outdoors in.
So this started with a palette of natural materials resources and colors. We used all through the apartment Calcutta or marble which is and was honed. So it gave this texture and look of a pebble that has been upgraded with time by water. We used driftwood colored joinery and dark walnut colored wide boards which were a bit of a salute to the building in itself with the texture so it looked like a railway sleeper almost.
And it was good. It did the job but there was something missing though, said we wanted to instill that freshness and have that X factor that was like WOW. Nothing else mattered. So we actually redesigned, as I mentioned before, it’s two stories, we redesigned the entire stairwell. To actually enhance and enable a vertical garden wall. And it really did the trick. It just brought life into the whole apartment and this naturalness and color being irrigated as well.
It’s something we didn’t count on, was that it created this amazing smell in the unit that was nature. It was as if you were in a forest, when you walked pass around it and it just completed everything. So it was definitely what sold the apartment.
Bernadette: And that spanned the two stories?
Maria: It did span the two stories. It was I think three meters in length and I had a little juliet section cut out of the top, so it almost looked like a veranda that you looked across with a timber finish. That again gave it that look like you’re in a forest you’re outside you’re in nature.
Bernadette: If you had your time over again, what would you do differently?
Maria: Probably the challenge there is, I would not have bought a property to flip, that I intended to buy as a house. Having said that, I think this is life and sometimes we have to embrace what we get and work with the challenges. Having said that, in my experience now as if I had my time over, I would definitely go and hire a professional project manager. Not rely on every builder that says that they will manage a project.
Also a design architect who we hired. She also offered her services, in her case for example she failed in her due diligence on the builder, that he was not sufficiently licensed to do a project of this scale, creating other problems. So it’s little things like that that can be avoided when you have a professional project manager, and it would have saved us probably the two hundred twenty thousand we had to make up, for the builder failing to manage the project.
Bernadette: So that’s quite a substantial learning.
Bernadette: It sounds like doom and gloom but would you like to share the financial outcome of the project?
Maria: Oh Absolutely. I mean while it does seem doom and gloom, it’s actually where I found the project really enriching. I found it very, it wasn’t fun, but it was actually fun and seeing it come to life. Financially it was great after our expenses and the cash we had to invest in it. We made over three hundred and seventy thousand on it which was a very hefty profit for that. And that’s definitely set us up for the next projects. We are not that all upset because we walked away with.
Bernadette: That’s not too shabby.
Maria: Not at all. Not at all.
Bernadette: And how was the project received by the buyers?
Maria: It was definitely, we had the first people through the property, we had it listed through a private agent and the reason is. So sorry I should say. I enlisted a private buyer’s agent, again through the Wonder Women, simply because it became like, it was like a hyena in a safari. I felt I was suddenly inundated by the principles of every major real estate and it’s not meaning to brag but it actually became quite intimidating and you start thinking they’re telling you these prices and it’s creating doubt in you and others over inflating.
The private buyer’s agent, she was fantastic, she put it all in place and she just brought in the customers. She didn’t worry about telling us anything else and it was the start of a signing NDA, non-disclosure agreements, because people who didn’t ever want the property officially listed, who wanted to buy it, came through and saw it. It was that unique diamond in the rough that we wanted to create. Like we really hit the target there. The buyers were plenty and it became, that point of uniqueness.
Bernadette: Beautiful. So you’ve taken some more lessons out of that experience haven’t you?
Maria: Indeed I have.
Bernadette: What has been your course of action since that project? Where are you going now?
Maria: Right. Well Fred will be into it. I think going back to what you said about what I would do differently. One thing that this project, an experience that really opened my eyes to, is there’s this huge gap, this disconnect between actually finishing projects and people going out to renovate. And I started when I started talking to parents at my kids schools and even friends, I suddenly realized this almost dread of going to renovate of actually changing something in their house, that they would like to or in an economy like today where buying a house. That’s exactly how you want it becomes almost unattainable. You buy something that needs a little bit of a fix, It made me realize how much I took for granted.
My own experience and ability to do this and saw that’s where I could really help people and I could really make a difference, is by bridging that gap. And providing that connection for people to feel safe when they are doing their renovations, which is their home or when they’re doing it for personal wealth. So I formed showcase renovations and I call it, our motto is “Making Success Seamless”. And I think after hearing that story, that makes more sense. Because I believe a renovation, no matter what scale, can be absolutely seamless. It can be done on time, on my own on budget, and respectively in quite a short period of time.
If it is managed correctly, a professional project manager and I stress a professional project manager. Their job is to have eyes at the back of their head, in the front and not out with what everyone else is doing, they pick things up. You get just one centimeter wrong during the rough in stage and you might face having to take the whole wall down. That’s so much money so much time. That’s what showcase renovations is about, we are what you work with us. You get your personal renovation concierge, they are with you the whole way.
And that doesn’t mean that, oh they will just palm you off, and you deal with the trades you have to jump the little pieces in between. No. You work with us. We do all of that for you. You just sit back, you relax, you don’t have to worry. And our project managers, they are professional project managers who aren’t just paper pushers. They’re experienced renovators themselves. So for them, your home and your project, it’s like their own. Your success is our success.
And this is the road that it’s taken me. I think it was almost like a natural progression. I feel after my experience. I feel I owe it.
Bernadette: I think you solved your own problem.
Maria: I think so. I think indeed it has. And renovations can be fun. And I found it really distressing to see how scared people are just to have to deal with trade because they do feel being taken for a drive.
Bernadette: Yeah. I think we’ve pretty much covered it all. Is there anything else you’d like to share?
Maria: Just again I’d like to highlight that yourself and also the Wonder Women have been really just amazing, in terms of crystallizing what I want to do and how I want to solve problems. Not that I haven’t been able to solve them, but to do it in such an innovative, creative way where you feel like Yep totally can do this. Nothing is off limits. Nothing is too big that has been the biggest thing.
Because sometimes when you are there on your own, you think, should I dare myself to do this and just have someone? Yeah. And I can show you how you can make it better. That’s that is invaluable.
Bernadette: And that’s what we love to see. Thank you so much Maria.
Maria: Thank you.
Bernadette: If anyone wants to get in contact with you how will they do that?
Maria: I have a website we’re www.showcaserenovations.com.au and on the website you will find all the information you need including my contact number.
I can give it to you, but I think it’s easy if everyone checks it out, and just get it there right? And one thing is, we value a comfortable cup of coffee, so have a coffee on us and you’ll meet a personal concierge that will always stay with you if you decide to go with us.
Bernadette: Beautiful. Well, thank you so much Maria. I hope you enjoyed that.
It’s a renovation story with a difference and I think it’s great to know that there are such talented and skilled people out there to help you with your renovation you don’t need to be exposed to any unnecessary risks. If you’ve got someone competent that’s got your back.
So I hope you enjoyed that and I’ll see you in the next episode..
This is Bernadette Janson of “She Renovates”, a podcast for women who want to create an income and a life they love through renovating.
Today I’m going to be talking about flipping. For those of you who don’t know flipping is quite an exciting strategy. It’s where you buy, renovate, and sell a property for lump sum profits. But in saying that, while it on one hand it’s exciting, on another hand it’s quite challenging. And so today I hope to shed some light on some of the things that you need to be aware of if you’re thinking about this strategy. The title of this podcast is: 10 Things That You Need To Know About Flipping.
I’m going to start with number one. Why would you Flip? I’m going to give you four main reasons. So the first reason that someone would flip would be if your disenchanted with your job you might be in a toxic environment.
You might be bored with your job, and be thinking that renovating is something that you would love to do and would like to switch over to renovating full time and I know exactly where you are because I have done that for many years. And so that’s the first reason.
The second one would be if you’re building your property portfolio and it’s just not growing quick enough and you want to just give it a bit of a cash injection to put a tiger in the tank. And so that would be the second reason.
The third reason would be, you might be retired and you might be looking at doing something creative and fun that’s also going to make you some extra money as well. So that’s the third reason.
The fourth reason might be what we call the Avocado Smash strategy. So that’s where we’ve been doing projects with our children, so they are, they invest in it as well by means of an investment loan. We put some money into it. We do a project together and split the profit so that they can get going on their property journey. So that’s the fourth reason.
Normally getting flipping to get a deposit is not really practical because you need the deposit to buy the project but in the avocado smash strategy that’s what we do.
Point 1, Why would you not flip? Now this is very important. The main reason is because, for one flipping is not investment it’s not an investment strategy. It’s actually speculative and it’s a very short term strategy.
What happens is you breathe new life into this crummy old home and then sell it. It’s like selling the golden goose. And once the property is sold. Then the new buyer is the one that benefits from the capital growth.
The 2nd point is that it’s the least forgiving, because you are buying and selling into the same market or very quickly. You don’t have the benefit of time to heal any errors of judgment. So you absolutely need to get everything on point to make sure that you do actually make a profit. And it doesn’t go backwards.
The third reason would be that it’s just like a job. So if you don’t work you don’t get paid. What I say to our community is if you’re planning to flip, you need to make sure that you’re also working on a longer term strategy side by side. So that when you come to a point in time when you don’t want to work on your projects anymore that you have that portfolio to support you.
The 3rd point is that you need to work very closely with a property accountant. This is sort of relevant for all strategies, but in particular flipping, because there are lots of pitfalls for beginners. Now I say property accountant, because taxation law is very complex. You need someone who knows what you don’t know and knows what you should be asking because you don’t know what you don’t know.
And one of the things that you’ll need to work out with a property accountant, It’s a legal entity in which you buy the properties because if you buy them in your own name then you will pay a lot of capital gains tax on your projects when you sell them. And it can become uneconomical. So you need to find legal ways to minimize it. And the first way is by using company structures or legal entities to do that. So work with your property accountant to get that right.
The other thing that you need to do with your property accountant is actually protect your existing assets. So like it or not when you’re flipping you’re in a renovation business and you’re exposing your personal assets to business risks. So you want to make sure that you use legal structures to protect your personal assets and also that you are aware of all the taxes that you could incur in operating your business. For example, some renovations incur GST. What that means is, if this is the case with your project you will have to pay one eleventh of your sale price in GST and that’s regardless of whether you make a profit or not. It’s really important to make sure that you’re working with a property accountant on this journey.
The 4th point is that often people want to flip, basically climb up the property ladder flipping their family home.
Buying a home, living in it, renovating it, selling it and keeping going so that they avoid the tax, the capital gains tax, because they take advantage of the exemption. This is another reason why you need to work closely with your property accountant, because the taxation law in this area is quite clear that if your intent is to make a profit then it may well be taxable.
You want to make sure that if this is the path that you’re going down, that you make sure that you stay on the right side of taxation law. I certainly know of people who’ve received a bill for capital gains tax from what they thought was the flipping of a PPOR or Principal Place Of Residence long after it was gone and for several hundred thousand dollars. You want to make absolutely sure you’ve got that side of your renovation completely organized.
The 5th point is research. Once again you are starting a business when you go down the flipping path with any business. The first step is market research.
You need to research. Well obviously we’ve just talked about tax. And asset protection but you also need to research the area in which you’re going to be buying property. Not every area has profit potential, you want to make sure where you’re working is going to be profitable. Some of the things that you will gain from your research, firstly, who your buyer is and what they will pay for.
It’s important to identify a gap in the market and know what that particular buyer wants in a renovation.
When you’ve done a renovation everyone absolutely loves it, but often they won’t pay what it costs to deliver. So you need to know exactly what it is that they will pay for and tailor your renovation plan accordingly. You also need to identify margin.
In your research, you need to find the gap between the unrenovated property and a renovated property. That’s going to be able to cover all your costs and deliver you a profit. You also want to identify the best agent for your type of property in your area. I really like to select an agent in the research phase because if you leave it until you’ve got a property to sell, it just becomes a bit of a trap. Once you’ve got a listing it’s really hard to know who’s telling you the truth and who’s not. If you do this part of the work in the research phase and you’re presenting as a potential buyer you’ll get a really good understanding of the good agents and the not so good ones.
Point 6 is around sourcing the right property. Now I have worked predominantly in Sydney but I have students all over the country and I also do currently have a project in Queensland. But for me I’ve discovered that the sweet spot in terms of making a profit is where you buy the property at around $800-900,000. I look for around about $100,000 profit per project, and that seems to be where I can deliver that with not too much anxiety and a reasonable amount of confidence.
If I’m going for something at a low price point I’d like to add a land component to it at the lower price point. Often it can be more challenging to deliver adequate profit. Of course that comes out of your research. We have made like our last project was like a $475,000 studio in Surry Hills where we made an extraordinary profit but I would call that an outlier. Generally speaking on the common types of renovations we do, I call them cosmetic plus and I’ll talk about that in a minute, we work on around 10 percent profit. So if you’re spending $500,000 on a property then you’ll make around about $50,000 with all things being even. I’m not saying it guarantees you a $50,000 profit, but if you get everything right then that’s what you can aim for.
One thing I do now, that I’ve never thought I would ever do, is I now work with buyers agents. What I’ve found this does, is it really helps with the deal flow. In the past I would source my own properties, I’m quite able to negotiate the purchase of a property at the right property at the right price.
However, finding the time to do that often would lead to a long lapse between projects, because actually getting out there finding the properties, negotiating one falls through. It can take time. I have now got a group of really excellent buyers agents and property strategists that we use, to really speed up that process.
Sometimes people say, “Oh yes, but how much do you have to pay for them?” I think if you’re spending six months finding a property, the loss of profit of what you could have been doing in that six months, makes the buyer’s agent’s fee pale into insignificance.
Now with buyers agents, not every buyer’s agent will do, you really need to have someone that’s really switched on in terms of what you need as a flipper. Because the problem is, it’s a change in mindset, when you’re buying something to hold, buying a property in an area that’s early in the gentrification process is a real bonus, because there’s all that growth ahead of you. However, if you’re planning to flip, usually you need it to be further along in the gentrification process so that there are people coming into the suburb who are willing to spend money on a renovated property and often that’s not the case in the early stages.
Point 7 is the type of renovation. Now I think most people know that there’s two main types of renovations, cosmetic and structural. However, when you say structural it’s how long is a piece of string. It can be taking one wall out that you need to put a beam in four or right up to doing an addition and doubling the size of the property.
Now the problem with structural renovations, is if you are required to go to council and get council approval that brings a whole lot of risk in to play. You need to spend money on consultants like engineers town planners, heritage architects, surveyors, you name it. It adds a lot to costs and also it can add a lot to your time frame as well. So there’s a level of risk and then of course the market can change while you’re waiting for that approval.
What we prefer to do, is go for what we call a cosmetic plus. We don’t ever do purely cosmetic renovation. I like to add a bit more to the plan to actually push up the profit potential. That might still need or require some approval like you might want to take out a load bearing wall to open up the kitchen and living and make it more open plan. That’s a really common and good value add and that will require an engineer. But you can usually get the approval shoot through a shorter process in New South Wales. It’s called complying development. There are similar processes in the other states. By doing that it actually doesn’t hold you up in the same way and usually doesn’t require the same level of consultant involvement and definitely not the same time frame.
That’s why I really love cosmetic plus renovations, because you’re really adding the WOW and pushing the profit potential up but it’s not taking you all year to do it.
Which brings me to the next point, which is point 8, and that’s managing the holding costs. One of the things that we used to have to do was once the property, we’ll try and negotiate a long settlement for the property that sometimes works and sometimes it doesn’t. Then go like hell to get the plan organised and ready to go as soon as the property is settled and it belongs to you or even try and negotiate early access.
These days, what we tend to do is put the property on short term rental as soon as it settles, provided that’s allowable in the area or the building that you buy the property and so that takes that pressure off. So you’ve got some time to resolve your plan and you’re not bleeding money while you are getting yourself organised.
We also tend to put it back on the market for the settlement period. On the short term market for the settlement period after the property is sold, because once the property’s sold, so usually you have at least six weeks that you’ve got to wait, until the money actually gets transferred into your account. And instead of hemorrhaging money you can actually make money in that period of time and reduce the costs significantly. We use short term rental, most commonly Airbnb, quite extensively with our project. And I’ll be doing some episodes on that later on.
Number 9 is you’ve got to manage the process. Basically there are three. You have three roles in managing a renovation. You need to manage the budget. You need to manage the program or the time frame. It’s another word for the time frame and you also need to manage the quality of the work, because these days buyers are quite critical and want a good quality renovation. You need to make sure that you deliver that.
Now I know quite a few of us are recovering D.I.Y. I certainly have done my time in D.I.Y but I want to let you know that my profit. I only became truly profitable when I gave up D.I.Y. It’s great to be able to do some of the things rather than having to bring a painter back to paint an architectury.
Last week we had sheeting in the bathroom that needed to be fixed, just one sheet needed to be fixed, before the waterproof can start, being able to do those bits and pieces are great, because often if you have to wait a day for the tradesman to turn up, it just floods your job up. However, if your success is dependent on you actually doing the work, being out, being the key contractor in the project, you will find that you will burn out really quickly. I believe that your earning potential should not be linked to how much you can physically do yourself. If you’re a D.I.Y. I would think about that. I think it’s fine on investment properties, if you’re doing a quick spruce up, because you’re going to be paying those costs for 20 or 30 years.
If you can do it in a time effective way, like spend a weekend giving a place a makeover, well and good, but if you are flipping, D.I.Y is a recipe for disaster. Because if you have tradesmen who are doing the same thing day in day out they are quicker. They are more efficient and they can produce a good quality job in a timely manner.
The next thing. Just back on to the budget. One of the things that we do with the budget, is we produced a series of benchmarks to actually help you, help break down the budget. Because if you just have a lump sum for your renovation budget and you don’t track it down into areas it makes it really hard to manage. Often you’ll get to the end of the renovation and find that the money is run out before the renovation has and you can’t have that.
So chunk the budget down into areas, so that you can apply the money to the areas that you need to spend it on.
The 10th point is that with flipping, property styling is non-negotiable. Statistically we know the property styling increases the sale price by about 10 percent. We need that 10 percent to help us to pay the costs that we need to pay, such as the stamp duty, the holding costs the selling costs. Before we even get into the renovation and the profit. Often I’ve heard people say I’ve blown my budget. I don’t have the money for styling and art. So my answer to that is find it. Because if you’ve blown the budget you cannot afford to sell your property for 10 percent less. And that’s pretty much what’s gonna be happening if you don’t style the property.
Now, how far you go with that styling depends a lot on the area that you are working in and your clientele. Well, for us often we’ve styled from eBay, Gumtree, off the side of the road and been able to produce a really good outcome. So it doesn’t mean that you’ve got to spend a lot of money, but it does need doing. And you need to be able to deliver a high quality look when you take that property to market.
I mentioned, this is a bit of a bonus point, bonus point eleven. That you should choose your agent in the research phase and what we do is actually work with the agent for the duration of the project. So they are at the first design meetings, so we consult, work together to deliver the best outcome for our buyer and I find that works really well. The other thing is you can develop a really honest relationship and that’s most important. Something that a newbie renovator tend to do, is they pitch their sale price too high, because they become emotionally attached to the project as it’s going along when it’s finished. I think it’s worth way more than when they started. Unless you’ve got someone that can tell you and someone that you’re going to listen to, to say, “no, that’s too high”, often you can kill your market by doing that. Be really careful, and make sure that you get someone that you can work with, a sort of partner, through the project.
I hope that has been helpful. I’ll be doing episodes going into more debt in various points that I’ve made today and in later stages. For now I’m going to sign off and say Happy Renovating!