The Mistakes Renovators Make When Buying To Profit

Mistakes Renovators Make When Buying To Profit hell angels

We see many ren­ov­at­ors buy­ing prop­erty in Seven Hills try­ing to make a quick buck but many fail and some don’t even real­ise it.

Ever since the hot prop­erty mar­ket has been in the main­stream media and TV shows glor­i­fy­ing renov­at­ing with crazy profits, we have seen a spike in investors buy­ing run down properties.

Tip; Most of these TV pro­grams have extra trades­people work­ing when the cam­eras are off. Also the profits from the sale don’t include all the costs includ­ing time spent. I like to think of it more as prize money than renov­a­tion for profit.

What this media frenzy does is raise the prices of un-renovated homes and then you end up mak­ing less or no profit on the actual renov­a­tion. You might say “that’s not true, I made $50,000 on a prop­erty in less than 6 months”. This might be true but what if you didn’t do a renov­a­tion? Would you have made $50,000? This hap­pens because the bot­tom of the mar­ket is going up rap­idly. We have noticed un-renovated prop­er­ties in Seven Hills have gone up $50,000 in the last 6 months.

Tip; If you want to be a prof­it­able ren­ov­ator you need to get $2/$3 back for every $1 you put in.

Basic­ally people watch TV and say “I can do that!” and buy in a mar­ket they are famil­iar with. This is entirely the wrong way to go about it.

a pilot having No idea on how to invest in property

You need to do your research, research, and more research. What you need to know is;

This is just some of the things I look for when buy­ing and can make the dif­fer­ence between a prof­it­able or unprof­it­able renovation.

Clas­sic mis­takes ren­ov­at­ors make are;

  • Did not get the agent on side (rubbed them the wrong way).
  • Did not do their pest and build­ing cor­rectly or DIY.
  • Did not stay in con­stant com­mu­nic­a­tion with the agent.
  • Paid too much.
  • Did not factor in all the cost.
  • Did not have a B.A.T.N.A. (Bet­ter Altern­at­ive To a Nego­ti­ated Agree­ment), basic­ally they get stuck on one prop­erty and don’t have an altern­at­ive. This can make ren­ov­at­ors fear­ful of miss­ing out. Just like at auc­tions it can make you emo­tional and pay too much.
  • Get­ting emotional.
  • Talked too much.
  • Bought a bad layout.
  • Buy­ing the wrong type of property.
  • Prop­erty has too much competition.
  • Rushed the diligence.
  • Inside their feas­ib­il­ity research they had quotes from cheap and nasty trades­people (not all trades­people are like this).
  • Did not cal­cu­late their time correctly.
  • Under-priced fix­tures and fit­tings in feas­ib­il­ity research.
  • Did not cal­cu­late fix­ing the layout.
  • Choos­ing to buy off a good real estate (An agent can add or lose you over 10% to a property’s value, so pick wisely).

Dog giving property investment advice

Sum­mary

If you take these con­cepts and learn from these com­mon mis­takes you will be set­ting your­self up for a win. I recom­mend in this mar­ket to buy a un-renovated prop­erty to live in (after doing the research above of course). Ren­ov­ate it over a year or so. Hope­fully you choose an area that has good cap­ital growth. By doing this you will have twice as much of a chance to make money from the mar­ket and the renovation.

Remem­ber! The profit is made when you buy well not when you sell. If you buy a lemon none of this will work. I wish you good luck for a prof­it­able renovation.

About 

Jhai is an award win­ning Inter­net Mar­ket­ing Real Estate Agent for Eld­ers Toongab­bie and Kings Langley. After run­ning his own inter­net mar­ket­ing busi­ness he has now set his own sites for the real estate industry. He observed that 90% of real estate agents did not know how to mar­ket them­selves online. Jhai is now fixed on one goal. To teach real estate agents that they can mar­ket online so much bet­ter than they cur­rently are.

Since then he has been con­sist­ently quoted in the Sydney Morn­ing Her­ald and Real Estate Busi­ness online. He is a reg­u­lar guest blog­ger on TheHomePage.com.au, shar­ing his expert­ise of mar­ket­ing aspects for the Real Estate Industry. His biggest pas­sions are his wife, mar­tial arts, dogs and most of all property.

seven hills real estate agent NSW
Cnr Federal Road Prospect Highway Seven Hills NSW 2147 Australia