02 Apr What not to do when buying a renovator – Cherie Barber
Cherie Barber joins us midway through a TV renovation to answer a few of your reno questions.
Kevin: Joining me now from Renovating For Profit, Cherie Barber.
Cherie, welcome to the show. Thank you. I have a couple of key questions to ask you, strangely enough, about renovation. You’re doing one right now, I believe, are you?
Cherie: I am right in the middle of one for Channel 10’s Living Room, a low budget $15,000 whole house makeover.
Kevin: Well, there you go. The question I want to ask you – because I’ve had a few questions posed of me, and Margaret especially asked me to ask you – is there anything in a renovation property especially that you look for, to pick one?
Cherie: In terms of buying the right unrenovated property?
Cherie: Yes, definitely the location I think is paramount. So, buying in a good capital-growth suburb to begin with. A lot of people nowadays have a buy, renovate and rent strategy. It is getting harder to make the buy, renovate, and sell strategy stack up, so obviously a lot of people now who are buy, renovating, and renting.
If you’re going to do that sort of renovation strategy, then you need to make sure that you’re buying in a suburb where you can get a property that’s going to get good capital growth moving forward.
It’s also right down to buying on the wrong and the right side of the suburbs. You have to buy not only in a good suburb but the right side of the suburb, and you need to buy on the right streets within that suburb, as well.
For example, the property that I’m renovating at the moment, on behalf of the homeowner, they bought an unrenovated property but it’s on the bad side of the suburb where the property values aren’t high enough to make a renovation profit. So, your suburb due diligence is pretty critical.
And then I think obviously in terms of the actual property itself, buying a property that is structurally fine, perfectly livable just cosmetically tired, and buying a property that has the right layout. Not all layouts are great; some layouts are fundamentally flawed. Yes, buying the right layout essentially.
Kevin: In Margaret’s e-mail to me she actually posed a couple of other questions, and she gave me a scenario. She’s obviously been to a seminar, and it wasn’t yours, I must admit, Cherie. She said she’s been to a seminar and she walked away rather confused after a day because there were too many things for her to consider.
She wants to know, in your opinion, what are some of the wrong things that people look for in a project that they can discount?
Cherie: So what are some of the wrong things that they look for, or what are the wrong things they do?
Kevin: She’s asking specifically, what are some of the wrong things, some of the things that aren’t important? You’ve given us lots of information about location. Other things, like the aspect of the sun. She’s just given me a whole lot of information about the physical location of the property, and she found it rather confusing and hard to work her way through it. What are some of the pluses for you?
Cherie: I think some of the things that people don’t necessarily need to be concerned about, for me, aspect or orientation is not a big thing when you’re renovating for profit. Renovating for profit only works at certain price points, and it is the lower end of the market, not necessarily the higher end of the market. Obviously structural renovations are completely different, but things like orientation where the property is facing north, south, west, it doesn’t really matter when you’re renovating for profit.
I think a lot of people pour money into areas of their property that aren’t going to add any value whatsoever. For example, the laundry. Laundry is one area that doesn’t add a lot of value according to the bank valuer, so why would go and spend $2000 or $3000 buying tiles and investing in tiling labor if it’s not going to bump up any property value?
I think a lot of people just inject their money into the wrong areas of the property and they therefore over capitalize and don’t get that value back.
Kevin: Yes, I think that was the point that Margaret was trying to get to. So, thank you, you’ve clarified that.
Let me ask you this question, though. If I were going to renovate a property that had some period features, how important is it that I retain those?
Cherie: It’s really important. I’ve always said all along, your house has to have one personality. It’s either modern, or it’s more a character house. The worst thing you can every do is strip away some of those period features and have a house that has some modern stuff in it mixed with period. It never looks right, so you have got to go one or the other, modern or heritage. It is important.
Again, it comes down to suburb due diligence. Some suburbs, for example where I live personally, Balmain, it is full of beautiful little character cottages, and if you ripped out the ornate ceilings, the fretwork, you would actually devalue that property. So it is important, and it’s also important at a suburb level.
Kevin: Cherie, thank you very much. I’ll let you get back to your renovation. And also, Margaret, thank you for your question.
Cherie, thank you once again, Cherie, of course from Renovating for Profit.
Cherie: Thanks, Kevin.