Reality TV more property entertainment than education
Sure, we all enjoy watching those renovation shows that keep popping up – The Block, Top Design, and the new kid on the block, The Renovators. Celebrities such as Scott Cam and Jamie Durie guide us through renovations week after week and we’re glued to the set.
Where’s the "wow" factor?
The TV shows focus on the emotions and challenges of participants and the final project always has a "wow" factor. But have you noticed the lack of "wow" factor when it comes to turning profits? It seems there’s more blood, sweat, and tears than dollars by the end of the show.
As much as we love watching these shows, potential investors shouldn’t get discouraged by the lack of financial results seen on TV. There are still plenty of good buys and opportunities for property investors to renovate and make a profit if they educate themselves first.
Show me the money!
Investors should take to heart the importance of buying the right property – in the right place, for the right price, with the right renovation rules – to make sure they make a pretty profit, as well as create a pretty house. Sometimes women make the mistake of getting emotional about a property and start thinking everything they do will add value instead of crunching the numbers first to make sure the project is profitable. Why not get a valuation of a property before renovating to make sure you don’t overspend?
In addition, don’t be taken in by the escapism of the not-so-real reality renovation shows where contestants are often rewarded for creative, over-the-top, and at times, expensive ideas. Sometimes it’s the simple and practical renovations that make the most sense. For example, painting, replacing handles on cabinet doors, or cutting back overgrown gardens aren’t glamorous, but give you a lot of bang for your buck.
And remember, while renovation TV shows are entertaining they do not show the practical steps of research and analysis that is needed in order to make a profit. For example, property investors must learn how to choose the right suburb, set a budget, utilize floor space by reconfiguring a layout, what order to complete projects, and how to choose the right trades people.
Keep in mind, unlike renovation shows on TV, the goal of many property investors is not to immediately turn around and sell property, but to hold on to properties as capital investment and to generate income from rent. In this case, renovating properties can be a good idea in this tighter, more profitable rental market as a way to increase the rent and generate more income. In fact, some investors spruce up a property, raise the rent, get a new valuation from the bank, and then borrow against the increased value to fund another property purchase.
Remember, there’s money to be made in any market, but the key is to buy well and renovate sensibly.
Rachel Barnes is a founder of www.propertywomen.com.au, a website for and by women investing in property.