09 Sep Have the rules of renovations changed?- Jane Slack-Smith
With so many changes occurring, particularly with lending, have the principals around successful renovation changed? That is the question answered today by Jane Slack-Smith, who is the host of The Ultimate Guide to Renovation.
Kevin: As we’ve been telling you this week – I hope you’ve been picking up on it, anyway – The Ultimate Guide to Renovation is opening up once again. We’ll tell you more about that a little bit later in this interview and also over the next few days. Watch out for that as we send you those special announcements.
Talking to Jane Slack-Smith, who is the host of The Ultimate Guide to Renovation – great program, too – I’m just wondering, with all of the changes on the landscape, particularly around lending, whether or not the rules of renovation have changed.
Jane, welcome to the show.
Jane: Hey, Kevin.
Kevin: How have they changed?
Jane: It’s interesting. The rules have changed and the lending landscape has changed, and that means that investors have to be more astute than ever. But the foundations of making a profit from property are even more important in getting them right.
Kevin: What are those foundations?
Jane: I always start with location. As you know, my trident strategy is I look at buying below the market, adding value through renovation, and being in a market that’s going up in value, but location is the key. I think that anyone who is looking to renovate, you need to be buying in the right area.
Kevin: Jane, can you give me an example of a recent success story?
Jane: We had one of our students at Russell Burton, who was actually on the front cover of API Magazine. He used the trident strategy and bought below the market, a great property for $640,000 in Melbourne. He did a 16-day reno and was really strategic about it. It cost him $8300, and at the end, it was revalued at $62,000 more.
What’s more, by putting in that third principle of the trident strategy – being in a growth area – 18 months later, the property is now valued at $800,000, so it continues to go up. He has pushed up his rental income by doing that renovation and actually secured a two-year lease.
That is why it’s so important in this current landscape to understand the basic principle, which is you can renovate but if you renovate strategically to make a profit, you need to know where you’re going to renovate.
Kevin: It’s great to hear those success stories, but not everyone can be successful. What happens when it goes wrong?
Jane: Things can go wrong. In this kind of changing environment at the moment, I recently had a student in our coaching program who followed everything, put an offer in, and had the property purchased, but the valuation came in $50,000 short.
Everyone in the community was giving him some ideas and strategies, but the reality is maybe that lender wasn’t right or that valuer wasn’t right. Changing valuers and changing lenders allowed him to have the property re-looked at and secured at the price that he wanted. You need to be a bit adaptable now in these changing lending markets because not what were the rules from six weeks ago are the rules today.
Kevin: That’s what I love about your Ultimate Guide to Renovation. I think this is the third one that we’ve done together. The thing that strikes me is that you’re not on your own; it’s a great learning experience but there are people there to help and support you.
Jane: It’s so important to me that you have a group of like-minded people to support you. We have hundreds in our community who are willing to jump in and give some advice. A lot of them are very experienced. I think the thing is when you’re going through this property purchasing process yourself, sometimes you do feel like the only one doing it, so having a community to bounce ideas off, to me, was so important for the part of the journey for our students.
Kevin: Now it’s opening up. Give us a little bit more detail about what we can expect over the next few weeks.
Jane: We’re going to be putting out some videos. For me, it’s really important that you see behind the closed doors first before you make any commitment to becoming a student of mine. I’m going to be sending out a number of videos and educating people. You can take that information straight away and decide to apply it or, obviously, come on board with us and maybe get there a bit faster.
We’re going to be covering things like what to look for in a property, going through an actual property and doing an inspection. We’re going to look at some real “bang for your buck” renovation tips and then we’re going to do a renovation on a property and show you some before-and-afters – some real great videos full of content that people can take straight away.
Kevin: If you’d like to know a little bit more about it, go to the homepage at RealEstateTalk.com.au right now because there’s a button there that will take you straight to a page that will tell you all about it, or if you want, just wait because over the next few days, I’ll be sending you a little bit more information. You can click on the link inside there that will give you all the information you need. You can get in and, as Jane just said, look in behind the scenes before you make any kind of commitment.
It’s a great program. As I said, this is the third time we’ve supported it and we do it wholeheartedly because I know that it really does work. Watch out for more information on the Ultimate Guide to Renovation and use that link right now on the homepage, RealEstateTalk.com.au.
Jane, thank you so much for time.
Jane: Thanks, Kevin.