The Weekend Post - Real Estate
RENOVATING YOUR WAY TO A PROFIT
Ready , set, go — here’s the magic formula to making money from the property game. Choose the right suburb near the CBD, pick the best property, plot out a smart plan and set your budget to avoid horror blowouts during the build
WITH capital growth stagnating in Cairns for almost a decade, there are two ways to make money from the “property game”.
Investing for a rental yield or equity farming by renovating properties. And generally, success in both is drawn from a common ground — by selecting suburbs with CBD proximity.
Property Shop agent Lance Richards has completed eight of his own renovation projects and said there were plenty of “renovationworthy” homes within 5km of the Cairns CBD but rarely any actually on the market due to low vacancy rates and high yields.
“It’s easier to add value into an older home and it’s easier to find a renovation property in an older suburb,” Mr Richards said.
“And generally they’re the ones closest to the city. And if you plan on adding value, don’t be afraid to pay a bit above your expectations in those suburbs because they will generally always be in competition. A three-bedroom home in Parramatta Park is between $390,000-$420,000 and say you have to pay the top end, but then you add an extra bedroom, well your resale value is already going to be competing with the fourbedroom homes around $470,000.”
Mr Richards said it was more important to have a smart plan than finding the perfect renovation-ready property.
“If you’re renovating to live in, that’s going to be different to renovating to sell or rent out. You don’t need to put the best kitchen in for someone else because they might not see the value in your design. It might be nice for you if you’re living there. Just do what’s right for your target market.
“And tell all your trades and salespeople what the budget is — so they can’t start upselling you things. When you hear about horror budget blowouts, that’s generally where it comes from.”
Once the property has been purchased and the plan is in place, Mr Richards said he had a basic and obvious structure he liked to follow.
“I like to start with an arborist, clean the yard up and then give the house a wash. It lets all the sunlight in and a clean room is a clean mind.
“Next get the skip in and gut it all out, everything you don’t need. Then you can focus on your majors — the kitchen, bathroom, lounge and bedrooms. But don’t jump from one area to another just work and complete one room at a time. And to finish off go painting, then flooring and electrical last.”
Mr Richards said if possible it was ideal to complete renovations before moving in.
“Otherwise you start to think ‘I’ll do a bit here or there’, while you’re in there and you can lose track of the plan.”