Perfect Combo: Smart Reno Timed With Massive Market Upswing
ith thirteen properties under his belt, 29-year-old property investor, Tim Lewinski decided to readjust his initial buy and hold strategy to take advantage of recent runaway property prices in Hobart.
Making the decision to put his first property up for sale, Tim pocketed a hefty $160K profit on the $205K purchase in just four short years.
API Magazine attributes Tim’s success to a knock-out investment combo, combining a clever renovation with perfect market timing. We sat down with Tim to find out exactly how he did it.
No doubt location and property selection were a key component of your success. Can you tell us a little bit about when, where and why you chose to purchase this particular property?
Back in 2015, the Hobart market was extremely slow/flat, so I was looking for a property in my budget that I could add value by renovating and then continue to invest.
I also liked Moonah as a suburb due to its proximity to the Hobart CBD, and as it was my first property purchase, I felt comfort in investing in my hometown. This also meant that I could do some of the renovations myself to save on costs.
Was your initial strategy to ultimately sell?
My initial strategy was to obviously value add through renovation and then hold and extract as much equity as possible to buy more properties. After the property made considerable gains and I felt that the Hobart market was reaching its peak, I decided that it was prime time to cash out and put my profit to better use elsewhere.
Which spaces did you choose to improve and what materials and appliances did you incorporate?
The property needed a full renovation, this included plastering, painting, a new roof, new kitchen and bathroom. I purchased neat and tidy, but cheap fixtures and fittings from stores like Bunnings.
Did you go down the DIY route or call in the professionals?
I did some work myself such as painting and plastering, but also have a few tradie mates, including an electrician, builder and a plumber, who were able to help me out on a cheaper hourly rate which was great!
Also, by assisting the tradies where I could, I was able to save money on labour.
|Date of purchase||Late 2015|
|Reno cost||$60,000 approx|
|Date of sale||Late 2019|
When it came time to sell, was there a strategy behind your marketing and sales process?
I organised three appraisals from agents in the area, with a price in my mind of what I wanted to achieve. It was interesting that two of the appraisals came back at $420,000 and one came back at above $500,000 which was more in line with what I was expecting.
This made me realise how critical it is to select the correct agent and one that is on the same page as you - as it can cost you tens of thousands of dollars. Doing your own research and due diligence on what your property is worth is also essential.
Overall, did you experience any issues with the reno or reach any learnings?
Things take a lot longer than you anticipate! I was expecting to be finished the renovation in three months, but in turn, it took double that. You assume everything will run smoothly and trades will turn up when you need, but in reality, it doesn't work like that.
What are your top tips for investors looking to emulate your success?
You have to be prepared to put in the hard work initially and get out of your comfort zone. Looking back the renovation was huge, and I had no experience in that space. But it all worked out in the end and was rewarding both personally and financially.