Lack of experience, research and planning a problem with reno TV

Whenever I have watched reality shows what resonates most with me is an obvious lack of due diligence. How can you have an advertising campaign that any other vendor in Australia would dream of only to see failure and disappointment on auction day?

The other problem is that in the vast majority of cases that I’ve seen the contestants have little to no experience with renovation yet by the end of the series they give the impression that they are master builders.

On top of that the general public gets the impression that they have cut corners given the shows focus on a tight renovation budget. This creates a no-win situation, which has been reflected in the sales evidence.

The contestants keep running down to the local hardware store (which is usually a sponsor) to buy appliances, where they would be paying full retail as against sourcing the products far more cheaply over the internet. With better planning in advance these appliances could be purchased much cheaper – although that does not fit in with the strict timing schedules of the shows.

The problems facing these shows are sourcing the right properties in the right locations. This is nearly impossible, especially given that they have to find multiple properties the fit the criteria. When they find a compromise more often than not they have paid too much acquiring the properties and the cost of renovations combine to deliver over-capitalised properties. It is then very difficult to make the money back at auction.

I don’t see a great future with these reality realty shows given they are not financially viable. It’s an expensive gamble if you are not an owner-builder who is developing the property to live in.

It is well-documented around the country that punting on real estate using that formula is a recipe for disaster – and they keep delivering this conclusive evidence, don’t they?

Robert Simeon is a director of Richardson  Wrench Mosman and Neutral Bay and has been selling residential real estate in Sydney since 1985. He has also been writing real-estate blog Virtual Realty News since 2000. The RWM real estate model has sold in excess of $1 billion in database sales globally.

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