[00:00:00] One thing I often see particularly investors do when renovating is a strategy or a mistake theymake when looking at their comparables. They might look at the comparable salesin an adjoining suburb, not realising that that suburb has a 5% or 10% premium,and using those sales to justify the renovations they're doing.
Because the reality is, is most suburbs or even streets might have, like, a price cap on what a renovated property would actually sell for. Is gonna sell for. And if you're using poor comparables, which on face value might seem like reasonable comparables to use- Yep ... you can get caught out where you're overcapitalizing. So that, that's definitely a drama. Like, if, ifyou're buying, say, in a suburb at a million-dollar price point and the highest sale in that suburb is 1.1, and you're doing that as a renovation project, like, there's pretty limited scope of what you can do- yeah, especially- ... to justify getting past the price.
Yeah. The other thing that I find that maps or, or joins in with that is your number of bedrooms. Mm-hmm. So if you're buying a three-bedroomhouse, say, or choose your 1.1, [00:01:00] andyou're gonna spend some money to renovate it and see what its value is whenyou've finished, have a look and see what four-bedroom houses in the same- Yeah
area are selling for, or a three-bedroom house that's two bathrooms compared to one, one bathroom. 'Cause if you're buying a three-in-oneand you s- wanna look at spending some money, and that's gonna push it well past what a three-and-two sells for in the area, to me, that could be a,concern. Yeah. That you're gonna spend that money when there are houses in the marketplace that offer more for the same value.
Yeah. And I think following on from that, floor plans are everything. Yeah. Like, what can you actually do with the current floor plan without completely gutting it? Like, are you able to add an extra bedroom? 'Cause a bedroom is the quickest value shifter- yeah. Bedrooms... on sales ...and en suites, I find. Yeah.
And some of the older houses, you can actually get a, a main bedroom that might be, say, 4.2 meters by 3 b- 3.7 that backs onto a bathroom, where you can probably get an an en suite in there- Mm-hmm ... without having to [00:02:00] add anything in, 'cause an ensuite only needs about 1,500 width. Yeah. So you're still left with a bedroomthat's 3.2 by, say, 3.2, which is a now a standard size bedroom.
Mm-hmm. You've added an en suite. It backs onto where the water access already is. Um, and that's a good value add 'cause structurally youhaven't had to add to the house. Yeah. I think whenever you're adding bedrooms too, if you do have the capacity to do it within a floor plan, especially going from, like, if it's a three-bed, one-bath and you're going to a four-bed, one-bath, it might not necessarily be too appealing.
You- That's right ... if you're going to a f- from a three- to a four-bed, you really do need the second bathroom to see that jump. Yeah. 'Cause you might've been better off making two separate living areas- yeah...attractive to families so that people have got separate areas. Even if they reside side by side and you can enclose one- that makes, a good benefit. Yeah.Definitely. And I think, yeah, how you utilise a floor plan, 'cause again, you don't wanna ... unless, the reality is, is like you're not gonna be able to flip cosmetic renos and make big money on [00:03:00]that. Yeah. But if you, if you're going in with a, like, a legit renovation, like we're going in there to turn this over in 12 months- you wanna be able to maximise the space that there is currently, right? Yeah, and get your better results out of it. And sometimes it might be external to- yeah... the house as well. If something's got a good-size deck off, if you've got a high set or even a low set that's got a good-size entertaining area, um, at the rear, but it doesn't have, it's not covered. Mm. Sometimes just adding the roof coverage, um, lets you pretty up what's underneath it, and it's got better function.
Yeah. Um, and buyers will see that. Yeah, definitely. I mean, we've done the same here. We've got a little piece down the side where there was space; there was a garden bed. Put the pavers down and just put some really basic roofing over the top of it. Now all of a sudden there's a covered outdoor area, right?
Yeah, and it- just created space. Yeah, and if you're a highset, that covered space, um, underneath that deck area, uh, you can even, simple things like lining that so that the water doesn't go through- Mm ... can give you an entertaining area for, for wet days. Definitely, so [00:04:00] sometimes you're not gonna change your plans just 'cause it rains.
You're still gonna have people come over, so having an option where the upper deck might catch a bit of rain, um, getting blown in, but if underneath is lined and gets the water away, um, you've got two areas for the price of one. Yeah. And that's not a, it's not a big expense to do that. Another thing people can get tied up with, with renovations, is if they need to stage it out, 'cause sometimes a property can look disjointed if you've done work to half the house and the other half is original.
Yeah. You either kind of, in my opinion, it looks like ahalf-finished house at that point, even though you have put substantial money into- Yeah ... a property. Can be an advantage for us as buyer's agents- for sure... 'cause then it can show that maybe the seller's under a little bit more stress- yeah, why they've made the change
to sell than the agent's telling you. Yeah, exactly. Yeah. Yeah, identifying opportunities, but also they're thinking, "Hey, I've only got half a job to do." Do. Yeah. Yeah. Even though it's livable and it might be tenant-ready now- yeah... to get the full uplift of the works that the previous owner has done- we gotta finish it off
. You gotta finish it off. Yeah. Um, [00:05:00]example might be renovating a bathroom, but not the en suite. Or doing- or doing the kitchen and not doing the bathrooms- exactly, yeah ... and thenyou've got, you know, you've got a 20-year-old bathroom and a new kitchen.Yeah. I think, yeah. We, we touched on as well; bedrooms and bathrooms are the big ones.
I s- suppose after that, past the cosmetics, kitchens are something people always look at. There are ways to do kitchens where, where youdon't need to completely redo them, where you can just touch up cabinetry- yeah... et cetera, or just change the bench tops. Yeah, which someone's doing right now. Yeah. Thanks, Joel, for We were talking earlier this morning before we jumped in about a, a client you're working with at the moment who, who does do renovations as a legitimate strategy and flipping themover a number of them a year. You're saying that his, his take on things has changed a little bit with the market shifting?
Yeah. So what they, they were doing is, um, he's got private equity backing, so he doesn't have to rely on bank finance. So they'realways sort of in, an acquisition process 'cause they can have multiple, um, [00:06:00] jobs going on at once. But he's changed now with how the market is, that he doesn't really wanna do anything s- that's got structural changes, um, given the uncertainty in pricing.
So now he's looking at things that are just a go in quickly, redo bathrooms, kitchens, fresh paint. Well, quickly is the key there with the structural. If it extends a timeline on a project for a quick flip- yeah. He g-... time is money, really as well as- It is. And you know, they bought- they've sold three post-budget that they purchased before budget.
So the pricing that they were expecting in terms of sales values changed. I think you said it's like close to a couple of hundred thousand dollars across the three properties, a reduction in their sale price. So now it's about, he's probably looking more at being a, a volume business in the short term, and the, the way to get more done, is to do less work- Mm
um, to the property. So he wants things that are structurally sound, don't have to add rooms or replace beams or redo roofs, things like [00:07:00] that. It's just internal, uh,refurbishment, new kitchens, new bathrooms, and sell them in a qu- in a quickertimeframe. Um- To be honest, most people that are looking to do renos, theydon't want major structural work either, right?
Like it's a- No. It's a- Most mum and dad investors that are looking at- Mum and dads investors don't wanna do that. And the other issueshe's got, which would affect the mum and dad investor that buys something and has to do some work to it, is he's pretty good for trades apart from carpenters. Mm. So carpenters are very hard to get in the marketplace at the moment, which means that they're charging a lot more because of supply and demand.
Mm. So if there aren't many around, then their price can go up. That's another reason for limiting what he, what he needs to do to a house.'Cause if, if you struggle to get them in, cause they give you the bones for the property, so everyone's gotta work after them. Yeah. So if you're electrician, your plumber, and your plasterer, and your painter's- waiting on the chippy
uh, waiting on the chippy, that- that's time that gets eaten up. It's an interesting point about the [00:08:00]trades and prices going up. I think if y- if you are gonna do work, and you'vegot the money to do it, it'll never be cheaper. No, that's right. They- Than it is to do the work now. To do the work now.
Building prices have never gone down. No. Materials and labour, like, especially in Brisbane, like, with all the works coming up to the games, that labour shortage on, on the chippies and all trades- Yeah ... over the next, especially the next 18 to 24 months, I think that's, around 2028 is when it'll be the peak of- Activity
activity leading into 2032. Yeah. That problem's only gonna continue to- it's gonna get worse. Yeah. It's not gonna get better. So yeah, in,in my opinion, same reason we're doing works at my, my place now. Get it out, yeah, get it done. Get it done- yeah... 'cause it's probably gonna save you10, 20%- yeah... waiting 12, 24 months.
Yeah. And so that client of mine, he's gonna look at things that make it attractive to sell quickly, then as, as well. Mm. Um, so obviously spending money in your front yard versus the backyard is more important, 'cause curbside appeal- [00:09:00] Yeah ... um, is important. Most buyers will drive past a property before they think about contacting the agent if they're close enough.
Mm. Um, you don't get a second chance at first impressions-Yeah ... so making sure the front of the house presents really, really well. Yeah. What are they seeing as they step through the front door? What's that ...Again, talking about, like, doing renovations to part of a home, if you'rerenovating all the bedrooms at the back but the lounge room at the front is original condition- Yeah
that's still the first vibe that someone gets as they walk into a house, like, "Oh, this hasn't been touched in 60 years." Yeah. Soy- yeah, you've gotta make sure the initial impact is what you're after. Which it might be as simple, like, in that sort of situation too, it could just be as simple as a lick of paint and fresh floors- yeah,
to that entrance area. Yeah, and which shouldn't be too hard.No. Exactly. Yeah. Again, it's all about understanding what you think you're gonna be able to sell it for- yeah... and working back the cost to get it to there, whether it's actually worthwhile doing or not, which, when you're going in with the strategy of, of flipping a property, you need to [00:10:00] do that from day one before you get into it.
It's not like it's an investment property that's been sitting there for 10 years and you're like, "Oh, I wonder-" Yeah ..." where things fit." What's gonna happen. Yeah. Yeah. You, you gotta know your numbers going into it. Yeah. And then keeping costs down is providing as much labour yourself as you can. Yeah. I think when it comes to floor plans and configurations for you, I know I've got my own thoughts; I'm guessing we're not gonna be too far apart, but investor focus for a minute, 'cause everyfamily's different with what they need.
Some big families, I've got four kids, might need a five-bedroom house. Yeah. Or like they're not g- a three-bedroom, one-bathhouse probably isn't gonna work for a family- no... as bis mine, right? But like, from an investor point of view, you also, you wanna buy a property that is gonna appeal to an end buyer when the time does come to sell or while you're renting it.
What, sort of key layouts or configurations do you see appealing? I like the lounge or living areas towards the front of the house-Mm-hmm ... 'cause then you're walking into open space. Mm-hmm. Um, space and natural light are, are good winners, [00:11:00]normally make a good impression. Mm-mm. Um, and it gives you a larger, generally, they're a larger space in your house.
So if you, if you make them look really good, that gives a, agreat impression on a, on a good portion of the house. Mm-hmm. So personally I like walking into an open space that's bright and airy and well-presented. Yeah. You find, like, particularly in Brisbane, some of the old Queenslanders, you walk down the hallway, and you've got bedrooms on each side for the first 15 metres of the home.
Yeah. And it feels like you're walking into, like, a narrow little corridor. And- the house feels small. Small, and- it eventually does open up if they've renovated it nicely. Yeah. But again, that first impression of, oh, this feels tight, yeah, does make it harder. And generally they aren't well insulated for stopping sound coming from the road as well.
Mm. I live in an area where there's a high proportion of Queenslander homes, um, that attracts a certain type of buyer. But you have to be aware of these. There's, so, gonna be some of the things that you need to be aware of. Yeah. And if a house is 100 years old or over, or even [00:12:00] 60 to 70, for that matter, uh, not many things are still square.
No. So putting a new front door in can become a bigger issue than just hanging a new door. So you have to be aware of, of those types of things as well. And a lot of this, you know, uses the tools that are available to you as well. So take a photo of what you want, might wanna change, put it into AI and see what it comes, comes back with. Especially in terms of colours, colour schemes working well together. Uh, which bits inside need to be painted- the inside colours, say with doors- and which bits need to be painted the outside colours. Um, if you put a new door on, what colour should you paint it? If it gets a lot of sun, there's a whole- You've got more say in your house than I do about paint colours.
I didn't choose this one. Yeah. This was Courtney and the girls. Yeah. Well, uh, o- occasionally things like... We replaced our front door recently. Yeah. So we chose the door style using AI, and then we asked it for colours to match in with the rest of our house. And, [00:13:00] um, fortunately our front door faces west. The colour we wanted to paint it- while stylish- wasn't practical because when the bloke came to install the door, I'm talking about things going out of, out of square, he had to do a new surround for it as well. So, 'cause what we had as an entrancewasn't a perfect rectangle anymore. Yeah. So he had to do a new, new surround, and he asked me, you know, "What colour are you gonna paint it?"
I said, "Well, we're gonna paint it monument." So a darker charcoal-y colour. And he said, "Well, you've just... You'll void your warranty on the, on the door, for where it is, 'cause it's gonna get too much sun on it." So- "Uh, timber warps." So he said, "I can tell you within two months it probably won't close properly."
Okay. And that's what he sounded like when he was doing the- oh... doing the work. You said you had a chippy. Yeah. So you're fine. So he said, "No, you've gotta paint it with the right colour paint. So put that in your AI, it'll tell you [00:14:00] what, UV factor the paint colour needs to be, and then paint. Choose one of those colours."
Yeah. "Otherwise," he said, "I'll be back here in two months telling you, 'This is not my fault. That's your fault becausethat's the colour you chose.'" Yeah. Fair warning. Fair warning. So when does renovating actually make sense? I suppose it's a question for different scenarios. One, if you already are in your home and you're living there andit's your family home, or two, if you're going in as a strategy of like,"I'm buying this property with the idea of renovating it." When starting off on, on buying a property, obviously, being buyer's agents, I think a few things to look out for is obviously: there's been plenty that we've discussed on what to do and how to do it, but I think coming in and having a clear gap between the type of property you're buying and where the ceiling in that suburb is on a price point gives you a lot of room to add and find value.
I think for me, you can get caught in in overpaying. With this being the strategy of finding, like, a mid-tier property or [00:15:00] slightly above average property and thinking you can do cosmetic work to that and get uplift- yeah... I think it'sa bit of a hard- As we mentioned earlier, you've gotta really have a look at your ceiling in the suburb in terms of pricing for the features that your house offers.
And as we've discussed previously, even within the same street-Hmm ... you know, have a look at what sales, data there is, and what's sold,what prices, and you don't wanna push, you don't wanna push too far past- Yeah... what the, what the upper limit is. The bigger the gap between the top of the suburb and where you're buying for a renovator, the, the more room for error you probably have.
And also, the less competition you get when you're coming in to buy, too, 'cause you're going up against other people that have got similar lands, and they're assessing it in a similar manner to you. Yeah. Whereas if you go into a, a mid-tier home in a suburb, that market gets clustered with a lot of people who just wanna move in; they don't wanna do the work.
Yeah. It's- it might be something that, "We'll do that in a few years' time," or, "We might do this," but it's a [00:16:00] clustered market, and it's a more competitive market- yeah... when you're going in at that point. Well, yep. The two different things there is, you know, a house that needs a lot of, say, a good amount of renovation or provides that opportunity, you could be competing against, buy- similar buyers that are working all off a similar set of numbers.
Yeah. Uh, you're working to walk into a, the other type of house that you mentioned where it's, you know, a semi-established type thing, don't have to do a lot of work, then you become competing against what can be emotional buyers. Exactly. And because emotional buyers will pay more for a product for that emotional attachment to it, that's where the price range can really skew.
And if you're buying one that's got emotional buyers and you would wanna do a, a renovation project or do some work to it, you can soon get outpriced in your purchase, purchase value. Yeah. And you wanna buy something that has no emotional attachment, and turn it into something that will get emotional attachment.
Will get emotional attachment. Yeah. Exactly. Yeah. So it's, yeah, if you're looking at towards the bottom end of the market, needs [00:17:00] a bit of work, that's a good, good point. Less competition- yeah... normally with your buyer, buyer numbers as well. On the flip side, say you're already in the family home. We obviously spoke about a few things that you can do that buyers typically like, but when do you find is a good time, if you already own the property, you're already in it, when'sthe right time to, to get the renos done?
I suppose there, again, it's v- renos versus maintenance, sn'it? Always bedoing your maintenance and renovatons, uh, before your kids are too active. So at least some of them are, if they're crib-bound- yeah... makes things easier. Or- the other end of the spectrum with me, where children have moved out of the house as well becomes easier times.
If there's fewer people in there to disturb, your tradesman'sgonna be happier; he can work quicker. Yeah. And then in between it can be, you know, manage it on; sometimes it's gonna be on tradie availability. And, pricing with goods, the sooner the better. Mm. When someone, if [00:18:00] someone's thinking about doing work with the thought of selling, I think be careful as well.
Maybe it's not the right time to do the works. Yeah. Cosmetic stuff, getting it fresh again, first impressions, doing that sort of thing. But tackling major renovations as you sell, sometimes you might be renovating it; you might take away- yeah... the buyers that would otherwise appeal to the property.
Yeah. And especially if your renovations are gonna take a long time. Especially in a market that is dipping. At the moment. You might be thinking, I'm gonna scrub it up and tidy it up- yeah... so that Idon't give people a reason to walk away. But if that adds three, four months to your timeline to sell- yeah,
you might be hurting yourself more on the resale price than you actually- on the resale price. And then if you're rebuying, it's, you know, weigh those two things up. If, if I go to this expense now in a market where prices are trending down, am I better off just accepting what I get from a house as it is?
And, you know, I'll make my money when I buy my next property. So you gotta [00:19:00] take those two things into consideration as well. Yeah. Hopefully everyone took a bit away, and therewasn't too much noise out the back here. Working from home today. Working from home with renovations. Yeah. Anyway, appreciate you guys.
See you next time. Yep. See you next time.
-min%20(1).webp)