24 Feb Why investors turn to renovation? – Jane Slack-Smith
With more investors turning to renovation of some of their existing portfolio as a way to grow their portfolio because of recent lending restrictions. In today’s show we catch up with Jane Slack-Smith to get some tips.
Kevin: Already we’re hearing more and more investors are starting to turn to renovation in today’s market. Why is that? What’s happening? It’s interesting to note that Jane Slack-Smith is running a special webinar, which I want to tell you about, that deals with this and tells you how you can tap in out of that market, as well.
Jane joins me. Hi Jane.
Jane: Hi Kevin.
Kevin: Good. We’ll talk about the webinar coming up in a moment, but firstly, investors turning to renovation: has there been a change in the market, Jane?
Jane: Yes. Look, there has been a change in the market, and I think investors are being really protective of the dollars that they have to spend, and they want to be able to grow their portfolio faster, even though we have seen the fact that some of the lending criteria have made that a little bit more difficult.
Kevin: Do you see that trend continuing, Jane? Is it going to become more difficult for people to get into property?
Jane: I think people who want to get into property are going to be more focused and they’re going to have to really look to where they’re going to invest and spend every dollar wisely. That’s the real change that we’re seeing and why I think renovation is an increasing trend in the market today.
Kevin: One of the things you have to be careful of when you do go into renovation is to make sure that you don’t pay too much or that you actually get the right property if, in fact, you’re going to buy a property to renovate and then turn it over, Jane.
Jane: Absolutely. Renovation is such a wonderful strategy because it allows you to access equity sooner to get back into the market if you need to or can. It allows you to not have to wait on the market and that capital growth that could take five to ten years to create equity for you and it improves your cash flow because it pushes the rent up. There are some wonderful opportunities around renovation, but as you said, you can get it really wrong.
Kevin: You can, and one of the ways you can get it wrong is, obviously, paying too much at the outset, which means you’re probably going to have to hold on to the property longer to let it catch up. Also, the possibility of over-capitalizing, Jane.
Jane: Absolutely. Over-capitalizing on a renovation is one of the greatest risks, but I see one risk that’s a whole lot worse than that and I see people do it time and time again, and that is buying in the wrong location to start with.
Kevin: How do you go about assessing what is the right location?
Jane: I think we have to be more astute than ever, and that means that we have to do more research and we have to be really savvy about where we are investing because not all locations are fit for a renovation.
It’s about looking at things like the disparity between renovated and unrenovated properties within a location, but more so if you’re investing for the long term, it’s about looking at what the capital growth criteria is for that suburb, as well.
Getting the suburb right to start with before you even think about evaluating a property is one of the key things that I really spend a lot of time on.
Kevin: One of the key things is that evaluation process, which for a lot of people, is very difficult, but you, I understand, will be making that easier. That’s what the webinar is all about?
Jane: Absolutely. In actual fact, what I have is if people are putting out properties right on the market at the moment, I’m going to take them live and using just five free websites, go through these properties, assess the location for investment potential and then have a look at the properties as well. It’s going to be really interactive.
Kevin: So we’ll actually see that in the webinar?
Kevin: Okay. That webinar, by the way… Tell me, I think it’s out on the 24th of February? Just a few days away.
Jane: Yes, 8:00 p.m. Eastern Standard Time. The 24th of February. You have a link that people can go and access that. But if they register for it, they can jump on and see me evaluate those properties live.
Kevin: I was particularly excited about this, and that’s why I asked Jane if we could put a reference to that on our website. So go to RealEstateTalk.com.au, have a look for the button there and you’ll see it. It’s on the 24th, it’s on this week, so don’t miss it. You only have a few days to get in there, but the time, again, Jane?
Jane: It’s 8:00 p.m. Eastern Standard Time, daylight savings time.
Kevin: Not real time, that’s plastic time. The 24th of February, that’s this week. Get online, 8:00 p.m., and you can get the link and see all the details at our website RealEstateTalk.com.au. That information will be there for you.
Jane, I want to get you back in a few weeks’ time, too. I’m fascinated by this creating value through renovation, which is a real big trend, and I know that’s what you focus very much on in this webinar, as well. We’ll look forward to having you back on the show a little bit later.
Jane: I look forward to it. Thank you, Kevin.
Kevin: Just a reminder for you, once again, go to the web site RealEstateTalk.com.au, click on the link there you’ll see for that webinar that’s coming up this week on the 24th, 8:00 p.m. Jane Slack-Smith is the host and you can get all that information if you’re looking at doing some renovation.