Buy, reno sell… what am I doing wrong

Hi Dave

I'll assume you have factored in CGT.  If you hold a property for more than 12mths before selling it, there is a 50% discount on the CGT.  Have you trialled your numbers on holding the property for a year before selling it?  Up to you whether you renovate at the start or at the end of the 12mths.

Hi Dave

Have you considered the southside – I know the entry price in the Logan area is much cheaper. Just not sure if it's the type of area you have in mind for this type of strategy but I remember seeing a run down, detached house in Marsden for low $200ks a little while back – would have been ideal for this type of thing.

Cheers

Jamie

RPI has hit it on the spot,

Home renovation shows are a huge problem, Now every one wants to become a renovator….

My theory has always been this (mind you i renovated three properties) I made my money from buying the property at a below market price and I am not talking 10K or 15K I used to aim at 60K.

Renovating only gave me a better chance to sell the property….

Also when you say "you dont want to make huge" how much % or $ value are we talking about?

It's the same everywhere unfortunately.

Reno is the buz word now with all the reno shows on TV. The Block makes it look so easy that everyone thinks they can do it.

I've seen some disastrous buy/reno/sells in Sydney. Some have obviously made no money (I deduce this by looking at their buy price and what they did as a reno then sell price). Because lots of people are inexperienced they tend to under estimate reno costs and time therefore inflate their maxumum buy price. That makes it difficult for those that have calculated ALL costs effectively.

What research have you done to decide on your area? This will tell you whether it's a good area for buy/reno/sell. 

Hang in there. Don't make the mistake of buying something because you are sick of waiting. Work the numbers and stick to them.

Hi Dave,

You haven't stated your 'target figure' and it would be interests to see what you are aiming to achieve.

Have you considered the cost of your time in your profit/loss calculations?

Reading this comment it would appear as if you're still in the learning phase and either paid too much, over-capitalised and/or got your 'sell price' research wrong. Without knowing a lot about your or your background I would consider this as part of the learning process and wouldn't be overly concerned by the lack of profit provided you review your experience and learn from any mistakes made and then use this knowledge to make a better success of your next project.

As others have said you are battling against the media's current love affair with renos – every Tom, Dick and Harry is trying to emulate these shows which makes the task of making good selections difficult. 

Hi Dave,

Love your commitment – this will put you in good stead moving forward from here.

I am not a renovator so take what I say with a grain of salt but if you have learned 'something' from your first effort then you are on the right track. In my opinion those who claim never to make a mistake aren't being honest with themselves.

There are a number of glib phrases that may provide you with some comfort – "Rome wasn't built in a day" or "Success comes to those who wait" or "Wealth is the transfer of money from the impatient to the patient" and so on.

Hang in there.

Have you thought about networking with a real estate or buyers agent? May help

You need to be the first one to do the deal. its a great Business, you can make a real lot of cash in any market if you do it right, learning to do it right, unfortunatly isn't really documented, because every vendor is different, and you need to provide a solution to the needs of the vendors. the best money is made when you can secure off market deals. keep plugging away and learn from your mistakes, but educate your self on risk mitigation.