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How to Make Real Profits From Easy Home Renovation
We all accept that life can be hard and very often isn’t fair but doesn’t it seem as though some people make it their life’s work to give you a hard time unnecessarily?
Yep we’ve been there. Every entrepreneur will experience bright ideas or new inventions hitting a brick wall of one form or another. Despite all the determination, ingenuity and effort mustered, most have to admit defeat after a bitter and exhausting struggle. Sometimes there will even be heartbreak, but the thing is to never give up
Sometimes, after working seven days a week, investing all one’s savings while living, eating and breathing a new business venture, you can reach the pinnacle of success, only to have your dream snuffed out.
You are not alone. Everybody in business seems to have a war story to tell. It happens far too often. It may have even happened to you. However, making substantial profits legally and quickly from home renovation is almost certain if you follow the correct guide lines. In fact, if you can afford to buy a house or unit, there are very real financial gains to be made from home renovation.
Even if you have to borrow heavily to purchase the property which will become your first project, you can make money. In fact, if you are in debt, that is all the more reason why you should do something more than plug away for 25, 30, 40 or even 50 years, eventually paying substantially more than the actual purchase price in volatile interest rates, bank fees, administration fees and any excuse your mortgagor can concoct to rip the most money from you.
The sooner you can eliminate that mortgage, the better. Perhaps you will have to go through the renovation process several times before you are debt free. However, when the day comes that you lift the mortgage millstone from your shoulders, you will enjoy a sense of freedom like no other. There is nothing like the realisation that you are on the way to very real wealth.
It doesn’t matter who you are, what your qualifications are, whether English is your second language, whether you know anything about real estate or not, what city or town you live in, what your religion is or whether in fact you have one. It doesn’t matter either whether you’re black, white, yellow or varying shades of those colours, as long as you are willing to read, comprehend, absorb and apply the information in these pages, you are almost certain to make money. How can we be so certain?
Here is a true life story.
A young policeman in New Zealand knew promotion nearly always meant a transfer to anywhere within the country. Luckily when his turn came, he jagged the idyllic holiday town of Nelson where property values were destined to rise dramatically.
Situated in Tasman Bay at the northern end of the South Island, Nelson lies directly above major earthquake fault lines. As a consequence, most of the town’s buildings are timber construction as this withstands the rocking and rolling motion of frequent earth tremors much better than permanent materials. Because the town has a beautiful climate, marvellous scenery, a relaxed, carefree lifestyle and is in close proximity to so many wonderful natural attractions, it is in great demand, both from retirees and those seeking to own a piece of paradise.
In the late 1970’s all this meant high house prices and a shortage of stock on the real estate market. Although he received an excellent price for his previous home, the policeman found himself in the predicament of being unable to afford anything he and his wife liked, unless they saddled themselves with a second mortgage. His answer? Start a second career as a part-time home renovator.
After choosing the suburb where they wanted to live, they looked around for house with renovation potential. The only home within their price range was little more than a holiday shack. Squeezing four children into its cramped rooms proved a challenge. Almost immediately after taking possession, the young copper removed several walls to create more space and incorporated what was an entry porch into the lounge area. After calling for quotes from three builders, he and his wife had another room added. In between working shifts the policeman did all the painting, wall papering and renovation work in addition to installing a swimming pool around which he constructed a spacious wooden deck.
Four years later, when the policeman’s family sold the house to make a move across the Tasman, they received twice what we’d paid for it!
Unfortunately, a few years later, having walked away from a failed marriage with nothing more than a 12 year-old car and the clothes on his back, the same man was fortunate enough to meet a beautiful lady who was at that time also in the throes of an acrimonious divorce. When that was settled, she received half the sale price of an average suburban home and some very tired furniture. For his part, the former New Zealand policeman had willingly bequeathed his share of the former home to his ex on the proviso she let him get on with his life.
Although neither his new wife nor he had any savings to speak of, they were both prepared to work and start over.
Their first renovation project together entailed taking out what was in those days a hefty mortgage over 25 years. They had no thoughts of selling the house and their sole intention was to make a home together and plug away at paying off the mortgage as quickly as their combined incomes would allow.
Although they knew little about real estate, they were lucky in that they purchased a property with potential and one that was situated close to transport and amenities. Like most people, they could not afford the type of home they desired, so they set about making the improvements themselves and raising it to their desired standard. Because they had a teenage daughter living at home, they thought a second bathroom would add value to the home and make their life easier. Also, the man’s new wife had been used to the luxury of a swimming pool. Because having a pool meant a better chance of keeping a troublesome teenager at home where they could keep an eye on her and her friends they decided to install a pool despite the additional financial burden.
It proved to be a sound decision. The swimming pool added significantly to the value of the property when they decided to sell the house a year or so later.
As a practicing watchmaker, the original owner of the house had included a workroom adjacent to the master bedroom. With no need for this facility the couple quickly realised how easily they could convert this room to an en-suite. Although neither partner had ever previously done tiling, with the confidence of people who had tackled far more difficult tasks, they decided to learn on the job.
With copious cursing for a while, they soon got into the swing of it however. Naturally, rules and regulations dictated that they commission a plumber and drain layer to make the necessary plumbing and sewer connections but they even managed to save substantially by digging the trench for the waste pipes, a back-breaking task!.
They made further savings by scrounging around salvage yards for a washbasin, toilet pan and cistern in near new condition and picked up factory seconds for a paltry few dollars.
Within a couple of weeks of commencing this project, it was completed for a fraction of the cost a professional would have charged. This one addition alone added many thousands to the value of their house, not to mention the enjoyment they received from the luxury of an en-suite bathroom with access to the recently installed swimming pool.
Before you ask, no, they did not dig the hole for the pool or lay the brick paving around it. The latter task was one considered beyond their tools and expertise owing to the tricky curves of the kidney-shape below ground fibreglass pool.
With the en-suite completed and the pool in place, they suddenly hit upon the idea of converting a free-standing brick garage to a self-contained flat and rent it out to help pay off the mortgage. The building was surplus to their requirements as the home already boasted a double, lock-up garage under the main roof of our house.
The big question the couple faced was, “Would the council bureaucrats permit the conversion?”
There was only one way to find out.
Armed with carefully drawn plans showing the main dwelling, the separate garage and a proposed floor plan for the new flat the couple approached the local council. The pasty-faced, bespectacled young man in the engineering department took one look at the words “proposed granny flat” printed neatly beneath their drawings and a look of horror hijacked his countenance. ‘We can’t allow that,’ he exclaimed in a shocked voice.
‘Why not?’ the ex-cop countered naively, although the couple weren’t really surprised. Both had had considerable dealings with public servants of all shapes, sizes and governmental affiliations and knew to play it cool deciding it as just semantics. Change the wording, tinker with a few lines and quote a few examples of real or imagined cases who had been (allegedly) approved and they knew they would eventually get their plans passed.
The conversation between the official and the ex-policeman went something like this;
Planning Officer: Planning requirements say that self-contained flats must be part of the main dwelling.
Ex-copper: How about I construct a wall across the space between the two buildings and join them together. Would that do?
This was greeted with a look of utter dismay. ‘No! Granny flats must be under the main roof of the principle dwelling.’
Ex-copper: What about I don’t call it a granny flat? If I call it a “facility room” whose purpose is to provide outside showering, toilet and kitchen facilities for entertainment purposes when the pool is in use, would that be acceptable?
At this suggestion, the young man brightened, his face losing it’s worry lines immediately. ‘That would be acceptable, but you mustn’t call it a granny flat and it cannot be used for residential purposes.’
In your dreams buddy! The would-be renovator wanted to retort but instead replied, ‘No, no. Of course not.’
Having completed partitioning to form a kitchenette, bathroom and bed-sitting room, the couple lined the interior of the single brick walls and fitted plasterboard on the underside of the roof trusses to create a ceiling. The roller door was removed from the front of the garage and they installed an aluminium floor-to-ceiling window in its place. Using new-found skills to tile the bathroom and toilet, together they painted and furnished the “facility room.”
The council building inspector duly arrived and passed the improvements without comment. When it came time to eventually sell the house, the were able to say quite truthfully that the converted garage had council approval. What the new owners did with self-contained, freestanding brick room was entirely their own concern and no longer of interest to the local council.
With all the improvements made to the house, the couple were able to sell it for a great deal more than they’d paid for it despite only living there for approximately two years.
Since that time, they’ve repeated the process several times, each time climbing higher on the ladder to wealth and financial security.
Of course, not everyone has the skills to tackle tasks which fall under the auspices of the various trades people and would much prefer to outsource renovation work.
Nevertheless, even the reader chooses this latter path, they still stand to make substantial profits from home improvement. However, profits will be directly proportional to the amount one does one’s self.
The main thing to keep in mind here is, you can learn on the job and there are hoards of Tertiary and Further Education (TAFE) courses, handyman workshops and DIY books to which you can turn for advice on any topic.
Many may have already picked up skills through financial necessity when first married. Little money often brings with it the necessity to acquire what one needs through the cheapest means possible. For many, it often means having to learn how to make something rather than purchase it. This is not necessarily a bad thing. Learning how to lay concrete paths, construct fences, paint, and landscape, and construct sheds and pergolas and countless other things along the way is tremendously rewarding.
By adopting a “can do” attitude and refusing to use the excuse of not being a handy person so many people use today, you can achieve minor miracles and have a lot of fun in the process. Remember, if you have the will and a modicum of commonsense, you CAN do it.
So, where do you start?
You start by choosing the suburbs that will give the best return on your investment
What makes some areas attractive while others stagnate? Major detractors for thinking buyers would be;
1. Poor public transport services.
As fuel prices escalate more people will turn away from using the family car, particularly if they need to commute to work. And although many will continue to choose private transport whatever the cost, it is comforting to know public transport is a viable option should they choose or be forced to use it.
2. High crime rates, graffiti vandalism and “hoon” behaviour.
We all like to feel safe from the worst aspects of human behaviour and nothing degrades property values more quickly than a perception (real or imagined) of becoming a target of the ratbag elements in society.
3. Proximity to government housing.
Unfortunately, although many responsible and hardworking people find the need to make use of government housing, statistically speaking there is more crime in and emanating from public and rental properties than from privately owned homes. In latter years some state governments have turned away from large enclaves of public homes to a policy of interspersing government rental accommodation among privately owned dwellings. It does not take much detective work to ascertain if such houses are situated in close proximity to your proposed renovation project, and while the current tenants might be decent, responsible people, the situation can change overnight.
4. Excessive distance from recreational facilities, employment, medical services, schools and educational institutions.
5. A lack of parks or public open spaces.
6. In the flight path of a busy airport.
7. Narrow streets lacking in landscaping along with small or non-existent backyards.
Although many families today do not want the responsibility for maintaining large gardens, who wants to feel as if they are hemmed in? High density living is acceptable only where it does not come at the expense of one’s personal space and privacy otherwise we foment social problems and risk losing a sense of well-being and endangering our mental health.
8. A high incidence of “battlers” in the neighbourhood
This will reflect on the will and the financial ability of property owners to enhance their immediate environment leading to “nappy alley” type suburbs.
9. An excessive number of people from one particular demographic.
The happiest and most desirable neighbourhoods are invariably those with a good cross section of folk of all ages. This way, there are elderly or retired people at home to “keep and eye on things” while others are working. Similarly, the elderly do not feel isolated or marginalised as is often the case in some older suburbs where everyone appears to be in “God’s Waiting Room.”
Aside from the opposite to many of the above detractors, some of the qualities making areas attractive for potential buyers will be:
– Suburbs along the coastal strip of coastal towns and cities.
– Suburbs or streets within suburbs that afford attractive views.
– Localities where there has been careful consideration to landscaping and street design.
– “Exclusive” estates with regular security patrols.
– Anywhere where owners obviously exhibit pride in their gardens and homes.
– Estates where restrictive covenants apply and are enforced. Nothing detracts from property values more quickly than broken down vehicles or trucks, caravans or trailers parked on front lawns, rubbish bins left in view, unkempt gardens, ugly air conditioners, television aerials, satellite dishes or anything which tends to spoil the aesthetics of the neighbourhood.
– Suburbs that are well maintained by the local authority. Let’s face it, not every suburb receives the same care and consideration by local councils and some local authorities look after ratepayers better than others. Potholes, weedy verges, brown dried-up parks, a poorly enacted or non-existent graffiti removal policy or the lack of footpaths or recreational facilities reflect badly in property prices.
– Suburbs which boast a university.
– Suburbs hosting at least one well regarded private secondary school.
Naturally, the more ticks a suburb earns, the higher the property values so you may have to trade off some things in order to find a project within your budget. Nevertheless, the canny investor should look for the best value for money and there are some excellent bargains to be found which will bring surprisingly good returns. However, do not choose with your heart (emotion). This is purely a business proposition and you should be looking to meet the needs of the greatest numbers of buyers, NOT what necessarily appeals to you.
Lastly on the question of deciding where to buy, never buy without knowing who your neighbours are. Because it is worth hammering that point home I’ll repeat it. Never buy without knowing who your neighbours are.
A little time knocking on doors around your chosen property asking a few discrete questions might save you heartache and dollars down the track. The most carefully tended home might well house a drug laboratory or people who otherwise make life unbearable.
Remember, have fun and you’ll pick up what you need to know as you complete each step.
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