There’s one question in particular that’s commonly asked by investors who are trying to learn more about making money from adding value to property, and that is: “What suburbs do you recommend for finding profitable deals to renovate/resell?”
By ANA STANKOVIC
The answer to this is simple. While the old mantra of ‘location, location, location’ is right on the money when looking to purchase/renovate and hold a property, it doesn’t hold true when looking at turning over properties.
If you’re looking to make money from renovating and selling a number of properties, your focus will be on adding the most amount of value in the least amount of time possible.
This means that you’re likely to be looking at completing a full renovation in two to three months, having a month to run a sales campaign and than another 30 to 60 days for the new owner to settle. This adds up to a six-month turnaround time max.
You won’t be looking for natural growth for a property. You don’t want to buy something and leave it to accumulate capital growth over time according to what’s happening in the marketplace and economy.
You’re actually looking at purchasing something, renovating it in order to manufacture your own capital growth and than selling it for a profit. In such short turnaround times, it’s your renovation that adds the value to the end selling price. Any natural growth that happens in the meantime is just icing on the cake rather than the reason for purchasing it in the first place.
This makes that old mantra of location, location, location irrelevant.
So the focus comes down to a specific property and the opportunities it presents rather than the location. Every suburb has good parts and bad parts, as well as un-renovated properties.
When clients ask us to find them a renovation project, we don’t focus the requirements on location and features, etc., like you would with a typical buyers agent. We shift the focus to how much the project needs to make, over what timeframe, what the budgetary constraints are, and how long it’s likely to take. You should do the same.
There are good renovation opportunities everywhere.
Ana Stankovic is well known as one of Australia’s leading renovating-for-profit specialists and is regularly featured in prominent industry publications, expos and continually educates investors. To find out more or sign up for Ana’s free newsletter, visit www.RenovateAndProfit.com.