Adding Value Part 2

1. Adding Value Part 2 www.renos.com.au | info@renos.com.au | 1300 550 656

2. Adding Value • Wonderful ways to add value • 7 deadly sins

3. Wonderful ways to add value

4. Wonderful ways to add value • Add a front fence

5. Wonderful ways to add value

6. Wonderful ways to add value • Add a shade structure

7. Wonderful ways to add value • Open the verandah

8. Wonderful ways to add value • Remove vegetation and tidy up yard

9. Wonderful ways to add value • Make the property dog friendly

10. Wonderful ways to add value • Paint kitchen cupboards Before After

11. Wonderful ways to add value • Turn a window into a doorway

12. Wonderful ways to add value • Replace handles Before After

13. Wonderful ways to add value • Add a bedroom

14. 7 Deadly Sins

15. Sin #1: Wrong Reno Property/Wrong Price Don’t try to turn a ‘Lemon’ into ‘Lemonade’. • Do the numbers • Do NOT do “all” this reno work for nothing, you have to make money or you must walk away!

16. Sin #1: Wrong Reno Property/Wrong Price THE LESSON • Renovator not a miracle maker. • Get to know the “differences between cosmetic problems and terminal diseases”, where the instant equity is made. THE FIX • Educate yourself. • ‘Investor” renovation is very different to ‘home’ renovation. • Learn the short cuts to quick capital gain. • Model and mimic people who have “been there and done that”.

17. Sin #2: Wrong Area • Burnt out cars and graffiti on garages are a good indication of a “Beware of a Capital Loss” minefield. • It costs no more to more to renovate a property in a good area than it does in a slum. (Who is the end user?)

18. Sin #2: Wrong Area THE LESSON • Do your research. • Look out for future infrastructure changes that may effect your property. This may savage your capital value. THE FIX • Research eg. demographics of the area. • Find out what is planned for the area eg. a new University that no one knows about. • Look at other people’s renovation results in the area

19. Sin #3: The Eternal Optimist Underestimating what needs to be done! “Oh it’s so cute!” But what about the cracks in the walls and floor? “Whaat …I didn’t see them!”

20. Sin #3: The Eternal Optimist THE LESSON • Getting carried away with the agents’ enticements like … ‘Needs TLC’ (when maybe it really needs TNT!). • First reno total ‘stuff up’ may result in one of 3 things…. • Lose money and walk away… never to do it again • Lose money and learn to do it better • Get lucky THE FIX • Get some advice • Program the work and see if it still makes sense… as an investor not as a homeowner.

21. Sin #4: Disorganised The painters are painting, while the tilers are tying to tile the floor and the floor polisher is trying to sand. The plumbers are on holidays... Where is that !@#$ electrician to run the cables and put on the power. It's absolute chaos. Help!

22. Sin #4: Disorganised THE LESSON • Communication: Communicate, communicate, communicate …make sure your work program is understood by all parties. THE FIX • Take an active interest in the project, but don’t get in the way. • Keep your eye on the ball. • Make sure if you say you will do something, do it! • Note all conversations in your job diary. • Issue any instructions in writing.

23. Sin #5: Overcapitalising Emotion, one of the most common renovating sins. • This is the ‘mother’ of all reno mistakes… spending more money than the value you add. This is a cardinal sin of renovation. • DO NOT spend $1 to make $1. Nooo!

24. Sin #5: Over-capitalising THE LESSON • Spend a little to make a lot. • Don’t cut too many corners - ‘paint and profit’ = ‘shonky/bog/flog’ • Question: If I do this (cost $x) will it raise the rent? THE FIX • Over-capitalisation is normally caused by 3 things: The Unknown, Emotions and No Budget • Get a second opinion • Do some courses on renovation • Talk to other investor/renovators.

25. Sin #6: Taking Too Long • Time is money.

26. Sin #6: Taking Too Long THE LESSON • Do minimum work to get maximum result in the shortest time. • Time is money in the forms. THE FIX • Set a realistic construction program with dates, times, materials, responsibilities and stick to it. Make sure all parties have a copy and stick to it.

27. Sin #7: Running Out of Money • You blew it…you can’t finish the work…you can’t sell your house, you have just committed “renovation hari-kari”. • You are about to become one of the dreaded “D’s”…a Desperate seller. • A half finished house, an empty bank account, no cash flow, and the only thing building is the interest you owe on your investment loan.

28. Sin #7: Running Out of Money THE LESSON • Budgets and job program are important. • It is easier to trim the work in progress to save money than to try to finish a project when you are broke! THE FIX • Always keep a ‘buffer’ reserve to bail yourself out of trouble. • Walk before you run. • Get some basic reno skills. Time planning, job programming. • Talk to people who have done what you want to do. • Do an owner-builder course. • Invest in ‘investor’ renovation books and videos (beware the ‘restoration’ or ‘house and garden’ style)

29. Summary • Add value can be for more rent or higher sale price • We have 115 Ways to Add Value • 7 deadly sins..it’s all about research, setting goals, spending wisely and time is money