23 Aug Flipping & renovating houses for profit – Belinda Smith
In today’s show we talk to Belinda Smith, from oohm.com.au, who decided to develop a business out of her passion for property. She teamed up with another Belinda and together they have been successfully renovating and flipping property for over 30 years.
Kevin: A few weeks ago, I had the pleasure of talking to Belinda Smith, one half of a dynamic duo. She and her best mate, Belinda Westblade, both share the same first name and about 30 years ago, decided to get in to developing property, their passion. They’ve done a lot of flipping over the time, along with their husbands, too.
You might recall that interview that I did with Belinda. It was back in early August. Go back and have a listen. You can get it on our website, of course, so you can go back, and have a listen and look at the transcript, as well.
Belinda joins me again. Hi, Belinda.
Belinda: Yes. Hi, Kevin.
Kevin: Now the Website is oohm.com.au. You pronounce “Oohm.”
Belinda: “Oohm,” I pronounce it, just like the mantra, or just Google “the two Belindas,” we do come up.
Kevin: Just Google “the two Belindas.” You’ll find them.
Belinda, I’m going to take our conversation a bit further. Last time, we talked about whether women look at property differently from men, but I want to get into the real guts of it, which is the flipping. How does someone actually get started in property renovation or property development?
Belinda: I just like the idea of starting small. I’ll always advise somebody they ask Belinda or me just to start with something that’s manageable and achievable, and that might not necessarily be in your own hometown. You can renovate a place very easily at a distance; you just have to work harder, put a few strategies in place. They can always contact us, and we’ll tell them how to get it.
Kevin: Yes. There’s a great amount of information available at the website, oohm.com.au. You’ve also got some Facebook pages, as well.
Belinda: Yes, under Oohm Homewares, you’ll find us on Facebook. We have quite a following on Facebook. It’s quite fun. It’s something we attend to all day long so that we can answer quick questions from people on renovating.
But I do advise that people start small, mainly because I hate to see people in financial trouble. I think to start with your first one, you might make a few little errors. Renovating is something… I know that there are people who teach courses, who make it sound like you can just quit your job and turn it into a career.
And that is absolutely possible. Belinda and I have actually done it with our husbands. We’ve done it as a source of building equity. Belinda has done it really as a lifestyle choice. She and Rod have not worked for a boss full time for 30 years. So it’s absolutely achievable that you can renovate for profit, for income.
But starting small is key – keeping risk level low, getting good at keeping costs down, and sometimes that doesn’t mean tradies costs. There’s not a lot of cost-cutting you can do with plumbers, electricians, and the guys who you need to call onsite to do the official work, the licensed work. But there’s absolutely cost cutting that you can do when you get clever enough at creating a really nice-looking home, but being mindful of your spend – and that’s key.
The key is to buy low, to do your renovation well within your budget, and to stick to that budget, and just to work really hard on selecting tiles and finishes that look fantastic but they just don’t cost as much as the highly-advertised ones, and to sell as best you can, to tweak the emotions of the buyer so that you sell at a premium price.
Kevin: Yes. I mentioned at the outset there, too, that you both flip and you buy and hold. How do you decide which category the property is going to actually fit into?
Belinda: We’ll work that out before we actually do the purchase in the first place. We already know. If it doesn’t fit into our plan, we just don’t bother with that particular property. At this point, my husband and I are very underleveraged, and there’s a reason for that.
But, really, when we’re looking at something, I’ll think, “Okay, this is going to be a great one for tenants. The rental return is going to be fantastic.” Some of the properties we hold have rental returns of 10% here and beyond that, in New Zealand, and they’re the ones that we’ll always hold because they don’t hurt cash flow-wise.
I mentioned in our interview last time, that we actually haven’t been on big incomes – my husband and me, nor Rod and Belinda – in that our trades and our background history in employment didn’t offer big salaries, so we can’t afford to make mistakes, and we really haven’t. We’ve been very carefully selecting our properties along the way.
Kevin: How differently do you approach a reno on a property as opposed to one that you’re going to flip?
Belinda: We still renovate nicely. In saying that when we go to flip a property, I believe that you leave a reputation behind you, so we do make sure that we paint properly and we do proper finishes. We don’t want properties just to look pretty and sell them off and have the paint peeling off the guttering and people ringing us up with problems when we’ve left.
We still take the same amount of care, but I’ll choose decor according to who the prospective tenants are. For example, we have a commercial property in a small country town in New South Wales, and upstairs, I knew that the flats were going to be tenanted by guys who work in the railways, and they’re miners, and the gritty working men. So when I chose the kitchen, I didn’t choose white; I chose a gray-colored kitchen, because I knew that if I chose white, then every time between tenants, either I would be up there or I’d have to pay cleaners to scrub the scuffs off the cupboards and the flooring, and little things like that.
I do really know the demographic. It’s so important to know the demographic of who your tenants are likely to be, and you renovate according to that. Because if you renovate to appeal to a mass market, then you’ll always get higher rents and you’ll always get a higher sale price at the end, and you’ll always get higher valuations.
Kevin: Belinda, we’ll have to leave it there, but thank you very much. If you want to contact Belinda, either one of the Belindas, just Google “the two Belindas.”
You’ll find them. Belinda Smith, I’ve been talking to from oohm.com.au. You can also find them there on Instagram, Twitter. Is it Pinterest? Is that how you say it? Pinterest?
Belinda: Pinterest. Yes.
Kevin: Pinterest. They’re at Facebook. They’re everywhere. Just go and find them, and have a chat to them.
Belinda, great talking to you. Thanks again. We’ll catch you again soon.
Belinda: You, too, Kevin. Thank you.