The Biggest Obstacle for Women Renovators

The podcast for women who want to create income and a life they love through renovating

Join serial renovator Bernadette Janson as she explores the ins and outs of renovating for profit!

Bernadette has over 30 years of experience in the renovating for profit business. She’s a registered nurse, a renovator, a mum, and a teacher.

80 – 10 Killer Steps To A Flawless Feasibility

On today’s episode,

In this episode I will share with you the steps to how to be quick and efficient when creating your feasibility for your projects.

Before you sign a contract on any project, you need to complete a feasibility analysis. This is a critical part of the process. This is a great skill to have and you will get better at this as you go along.

Listen to Episode 80: 10 Killer Steps To A Flawless Feasibility

Episode Highlights

  1. [00:02:31] Propagating fiddle figs
  2. [00:04:19] 36th wedding anniversary
  3. [00:05:25] Mortgagee sale property
  4. [00:11:02] Covid trade prices
  5. [00:11:54] Opportunities for income
  6. [00:12:30] Preparing your renovation program
  7. [00:13:52] Determining the time frame
  8. [00:14:01] Profit potential
  9. [00:17:04] Risk factors
  10. [00:18:41] Sufficient contingency
  11. [00:19:16] Profit


Well, hello, renovators, it’s Bernadette here with another episode of She Renovates. And today I’m doing a solo episode. So what I want to do is a little mini class. And I’m going to be covering a topic that is incredibly important and a lot of renovators do not do this well enough, and that’s feasibility.

And before we get into this episode, I need to remind you that the information in this podcast is general in nature and opinion only. It should not be taken as personal advice. There are significant risks with buying and renovating property, and you should maximize your profit potential and minimize your risk by seeking independent advice that relates to your personal circumstances through your own financial planner, accountant and any other professionals that you are working with. The examples in this podcast are for illustrative purposes only.

Over the last couple of weeks, I’ve done full feasibility on 2 projects and I was patting myself on the back, thinking how quick and efficient I am at this. And I thought, “You know what? That’s the skill to share.” So here we are. I’m going to give you my 10 killer steps to a flawless feasibility analysis.

Before I get into that, what I want to do is give you an update on what’s happening in our lives. And so while the lockdown laws are easing up a little bit, we’re still living a pretty quiet life. So we’re going out to eat occasionally. Well, we had a week away last week. We’ve been visiting family. But other than that, we’re lying pretty low and we’re doing well, trying to complete some tasks around our home. One of the things we did is we have this massive fiddly fig, it’s Stephens pride and joy. And I’m actually really not that in love with it because it’s so big that it’s I’m scared I’m going to knock it all the time and it’s just in the way. And we have 5 meter high ceilings in our living room, and it’s probably at least 3 ½ meters. It’s got really tall.

Anyhow, I encouraged him to prune it. Now, it took me probably about 6 months to convince him it was a good idea, but eventually he did and he pretty much chopped it in half. And so then we thought we’d have a go at propagating the prunings and “Oh my gosh, who knew it was that easy? It’s amazing!” So now we have got 5 or 6 little fiddly figs ready to be planted with really established root systems. So it’s awesome. Who knew that it was that easy? Now, I’m not much of a gardener, but I have actually had a reasonable amount of success with fiddle leaves, which is amazing because I always consider them as being quite exotic. So if you’ve got one, I’d suggest you have a go at propagating.

The other thing that I’ve been doing is I got this brainwave that I wanted to have a go at crocheting light fittings with brass wire, and I waited 3 months for the wire to come. It’s very fine. I think it’s 3 mil thick. It’s very skinny. And actually it’s not it’s less than 3 mil. Anyhow, so I’ve had a go and I’ve made one and “Oh my gosh, it is not fun to work with.” David, the architect in the family, absolutely loves it and he’s telling me I should put them on Etsy. I’m not putting anything on it that is the last thing I feel like doing. I’m just deciding whether I’ve got the stamina to make my way through a second one. But there’s certainly quite an interesting, sort of earthy, homemade sort of look. And the brass wire is really fine. And yeah, it’s interesting. So I’m pretty happy with that.

Stephen and I are celebrating our 36th wedding anniversary this week, so we’re having anniversary week rather than day. So on Sunday, we went to dinner at Chin-Chin, compliments of my dear friend Jo Vadillo and Greg. And then, the anniversary is actually today. So we’re going out to one of our favorite locals for just a quick dinner tonight. So things are pretty good, but I have been desperate looking for a project and because I really want to get in and get going.

And so I have done feasibility on 2 projects I’d talk to if you’re on our She Renovates group, you would have heard about the first one. So this second one is a mortgagee sale and I found out about it off market and it is vile. It is a 2 bedroom apartment that has been packed in with Asian students, poor darlings, into this filthy, filthy home.

It’s an apartment, actually, 2 bedroom apartment. Anyhow, they it’s a mortgagee sale. So I would say the landlord is getting his just desserts. And so I’m hoping that we get it. But given the climate, I’m not being too gung ho about it. But when I was doing the feasibility, I thought I am really good at this and it’s because I do it lots. And so I thought, what better topic to talk about? So I’m going to give you the 10 keys step. So let’s get into it.



Obviously, when you look at a property and you are deciding that you do want to figure out the financial feasibility of the project, the first thing you need to do is to decide on the scope of the project. Now, with this project that I’m looking at, I could go one of two ways. I always like to add a bit more than the cosmetic improvement to the project. This property has a bathroom and it has a laundry and then it has a toilet powder room off the main bedroom. So it’s not an en suite. It’s just quite a large toilet with a basin in it.

Now, I could go down the path of knocking out a wall and I think normally I would knocking at a wall to create that second bathroom, because I find that with the 2 bedder, having 2 bathrooms enables 2 couples to live in the home and sort of pretty independently. And that’s always a great value add. However, given the climate, the property climate, I don’t want to have the time, the expense and the risk of going down that path because getting approval to take out a wall in a strata apartment, close it down and you’ve got to get an engineer involved and the certifier adds more cost. So I’ve decided to go down the other path, which is just purely cosmetic with a few little tweaks to elevate the profit potential. But to be honest with you, when you look at it now, I think just having it clean and new is a massive, massive improvement. So I’ve decided to go purely cosmetic. But if you were going to go the other way, then that would inform how you do your costs. So that’s step one. Decide on the scope.



Decide what can be retained, cause what we’re doing is renovating. We are not restoring. We are renovating. And that means really to refresh or renew. So we need to be careful that we don’t just rip everything out because the things that we can retain are money in our pocket. Now, when I went around this project, believe me, I’ll put some photos in the show notes you will die when you see it. But it’s there’s not a lot you can retain. However, it has some rather glitzy light switches and GPO’s, which is another way of saying power points, which have the casing, the metal casing over the PowerPoint. They’re actually not that old. They’re just really filthy. But the middle casing is gold and it looks hideous. So I decided I could keep those and make them over. I won’t share the plan for those yet. But that’s a big saving because there are a lot of power points. Normally I would replace more with new. But I’m not going to with these ones. I’m just gonna keep them and basically renovate the power points and the light switches.

There’s not much else I can retain. Even the oven is absolutely vile. So usually you can sell the appliances and sell off the kitchen or even just give it away. So it’s not costing you money to remove, but not in this case. But there is a dryer in the laundry that I will definitely sell. And the other thing that I can retain is the wardrobes. So the wardrobes are the sliding mirror doors with the frame, the frames painted white. So it’s not ideal, but it’s very clean and tidy. And I know that I can get away with keeping those just clean them up and they will be fine.



The next thing that you need to do is look at your renovation costs. My students really take a few deep breaths when I told them that they need to cost out their renovation before their contract goes unconditional. Because it’s fine for me to tell you what something’s going to cost. But what you have to pay and what someone else has to pay to get something done can be quite different. And I really believe in doing this longhand. So I have rules of thumb about what I spend on certain things. But a lot of things, I will get an estimate before I go into an unconditional contract. I have my finger on the pulse in terms of the costs.

Basically, I will go through all the things that I supply. I will be on the website. I will be costing out every single item. I’ll be getting estimates from my trades. And I will have quite a good working budget for that project. And like you might think, “Oh, but you may not get property.” and I may not. But you know what? Every time you do it, it’s great practice. And the other thing is, once you’ve done it a few times, you’re pretty well across what most things cost. My only issue at the moment is that because I haven’t done a project in Sydney for quite a few months, I’m just not really up to speed with what the trades are charging. And I’m not really up to speed with what the impact of covid on the trade prices. So I just need to be a little bit mindful of that when I am estimating those trade costs.



The fourth thing to do is look for opportunities for income. Now, I’ve talked about a couple of things that can be sold and normally I would be putting the property on Airbnb straight away. Well, that’s certainly not going to happen because it’s not habitable. But under normal circumstances, there would be opportunities for income. And I do have opportunity for income at the end of the project. So as soon as that project is completed, it can go on to Airbnb. And we include that in our feasibility template.



Now, the next step to feasibility is preparing your renovation program. So that’s the schedule of work and you need to do that. So you know how long the program will take. And so how much you have to budget for holding costs? What are the things and if you listen to my series on bathroom I certainly went over this back then that one of the things that impacts the renovation of an apartment is whether or not you have to render walls in the bathroom. So often the walls are solid masonry. When you pull the tiles off, lumps of the wall come off. So it has to be rendered before you can start your waterproofing and your tiling. And that render takes almost a week to dry. I don’t want to be lying tiles over render that hasn’t cured properly because it won’t serve the project. So that’s waiting a whole week for that to happen. There’s a few things that you can do in other areas of the renovation. But the bathroom is the thing that determines the timeframe of a cosmetic renovation.

Determining the time frame. This one I’ve worked out because we can’t work weekends and we’ve got that render element in it, then it’s going to be a full 4 weeks for the renovation.



The next thing we need to do is to be clearer about our resale price. That is the thing that determines your profit potential. And so the great thing about an apartment building is it’s a little market on its own. But I wouldn’t say it’s easy, but it’s easier to understand what your resale price is going to be. The only problem with this property that I’m looking at at the moment, there’s really not been any fully renovated apartments sold in recent times in that property. So we don’t really have a benchmark. And so we have to rely on prices for properties that have original bathrooms and so on. I don’t want to assume that just because we put in a new bathroom, it means that we’re going to get a lot better price because you just do not know and you do not know what the market’s going to do. So I like to always err on the side of caution.

The other thing is you want to be really careful if you are basing your resale purely on Internet, like looking on the Internet. It’s just that you don’t get the sense of space in the apartment unless you actually see it in the flesh. Because they can all look the same. And even though you can read how many square meters. It’s just not the same. Being able to see them in the flesh gives you a much more accurate figure of whether you can compare what you’re buying with what’s sold recently. Fortunately, I have been able to do that. So I’m in a better position to be able to determine the resale price.



The other thing you want to look at is other timing considerations. Like if you’re heading into later in the year, then you want to make sure that you have your property if you’re going to be selling it. You have it on the market by early November at the absolute latest, because the later you go, the worse it is for your resale. Usually we have had a few years that have been a bit out of the ordinary. So really thinking through your timing is important. You also want to look at other external considerations, things like the fact that we are in the midst of a pandemic at the moment. That definitely is having an impact on the property market. So really doing your research on that.

One of the things that I’ve done is talk to my local agent about what he’s hearing from the mortgage brokers. Are people getting pre-approved and apparently they’re busier than they have ever been, which is really good. But then also talking about what stocks coming on the market, because often it’s the other properties that are on the market at the time you go to market that will determine the resale of your property. So really sort of keeping your finger on the pulse in terms of your feasibility.



The other thing that I like to look at is other risk factors. So one of the things that I looked at, because this is an apartment building is what’s the other? What’s are the common areas of the apartment building? Basically, that’s the street appeal for an apartment building. And fortunately, in this building, they have all been renewed recently. So it looks really schmick. But the other thing is, and this is new really is I’ll have a look around and see what sort of construction works around? I really think that a lot of the issues with the building, particularly the Mascotte building in Sydney, was the fact that there was so much construction going on so close to the property, even though that it’s over I think 20 years old, it still is suffering structural issues. And I certainly don’t want to be going into a building that has those issues. Looking at what’s around, I just would not buy a property that was near like really close proximity to a construction site.

They are all the things that we look at when we’re doing feasibility. Obviously, we have a template. I’ve talked about the renovation costs and I’ve also talked about the holding costs. The other things that you need to include are obviously the selling costs and your borrowing costs. So your transactional costs, you really have to make sure that you have absolutely everything factored in to the feasibility. So there are no surprises.



Another thing to include is sufficient contingency. So sufficient buffer because renovating has a cute little way of throwing up some nasty surprises and you never want to be in the position where you can’t finish the project. Overspending is one thing, but not being able to finish the project is 10 times worse. And you want to make sure that you’ve got sufficient funds to to be able to deal with whatever comes up. And so presumably all that stacks up.



The last point to a killer feasibility is making sure that you include profit in your feasibility as a line item. Your profit is not what’s left over. It’s what you have set about creating. And you need to guard that profit with your life, because if you don’t, it will whittle away. Making sure that you have included a minimum of 10% on a cosmetic renovation so that you are not working for nothing. So if you include the profit and you include your contingency for nasty surprises and you include all your costs and you’ve got your resale price set accurately, you’ve assessed any risks that the project might present to you. And you decided to move ahead, then the next part of this process is to determine a strategy for securing the project.

That is also a little dance that we do. But it’s a fun dance. And I actually tend to be quite philosophical about these things. I always think if the projects meant to be, then it will be provided that I’m taking the appropriate actions to make sure that I give myself the best chance. And yes, so that’s the steps to a comprehensive feasibility.

Okay. So that’s it for today. And I should let you know that I’ve put these steps into a checklist which you can download. You’ll find the link to that with the show notes. And if you like what you’ve heard, then please make sure that you subscribe so you don’t miss out on the next episode. And while you’re there, I would really love you if you left us a rating and a review. And if you’re not already a member, I’d love to see you over in the She Renovates free Facebook group. Okay. Well, that’s it for now. And I’ll see you next week.

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    Amazing Free Content!LeaLea707 via Apple Podcasts · Australia · 05/22/22
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    “I have been listening to this Podcast for a few years now. I love how Bernadette freely shares her experiences and knowledge of renovating and how to create wealth through property. There are many people out there doing a similar things but Bernadette is the real deal. Her down to earth approach reasonates with me and I’ve learned lots from her. I’d highly recommend She Renovates!”
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    “I've been binge-listening to this podcast for the past week and it's absolutely brilliant. Bernadette has amassed so much knowledge and wisdom about renovating and she shares it generously and in a really easy to understand way that's inspired me to give it a go. Her advice is practical and I love that she approaches renovating in a really ethical and open-hearted way. Every episode honestly is gold. I also love that each episode is quite short and addresses a specific topic without any waffle. Thank you so much for this podcast!”
    Practical and honest adviceLuke Marland via Apple Podcasts · Australia · 05/12/21
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    “Hands down best renovation podcast there is. There’s no scams or tricks here and Bernadette provides honest and practical advice that you can actually apply to your life. There’s also great insights into the property industry (not just renovating) and Bernadette’s simple approach gives you tools to mitigate risk and fuels confidence to start your own projects.”
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    “Bernadette is an inspiration. Warm, open and a fountain of wisdom and advice. I’ve learned so much about everything from renovating to selling to creating an independent future from this podcast. Look forward to every episode!”
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    “If you need to break through any of your limitations to find the joy and success in renovation, Bernadette is your inspiration and advisor with decades of experience. Her down to earth, practical style of sharing what works and how to keep control of any renovating project is worth tuning in for - week after week. I have done a few renovations in the (distant) past and now feel motivated to go again, this time for a change of pace and new horizons. This podcast shows the way. Thanks Bernadette, James Burgin”
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    “Just dropping by to show my support for your podcast Bernadette. I look forward to each episode and I am never disappointed with the content. It’s such a generous offering and compared to many of the other property podcasts I subscribe to, yours is the clear winner. Perfectly suited to people embarking on a new renovator journey but equally suited to more experienced folk like myself - there’s something for everyone. Keep up the great work. Your honesty is so refreshing! I look forward to future learning and hearing more student success stories. Best, David Michos (And yes... a bloke) 😉”
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    “If you have any interest at all in renovating, you would be crazy not to listen to every episode! As someone who has done many courses and a project manager by trade, i learn something every time. Bernadette is so genuine and generous and totally relatable. Do yourself a favour and subscribe now !”

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