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As to profitability, your due diligence, and negotiating skills are what make most of your profit…also it is a poor person who is afraid of the taxman, my financial goal at the moment is to pay $120,000 PA in capital gains tax.
Why not buy the messiest old house in the street tidy it up and sell it for a profit, you only pay tax on profit.
WHY WOULD YOU EVEN GET INTO A MARGINAL DEAL THAT YOU CANNOT PROFIT FROM?!!
Make heaps of offers, sometimes they work, then you can profit.
Find problem sites that you can innovate, rather than renovate. I love 3br corner blocks with large backyards.
Always calculate bigger on costs, smaller on profits, then see if you can go well with the deal. Avoid paying fees if you can.(buy private).
Complete the reno as fast as possible, then rent it out until sold, with a set profit margin in mind.Know your limits would have to be the rule here, Crashy…I said "faster and easier, to learn a lot of the tasks that tradies do, and practice on a small job to familiarise yourself with procedures, then do a better job because you can focus on the only job you are doing." By paying attention to detail, learning the proper methods and focussing on a skillset that is beneficial to your target properties, you can actually do a better job for cheaper. I am not advocating that you do anything that is outside the realm of competant DIY, however some tasks I have found relatively easy to learn are, carpet laying, painting, garding/landscaping, fencing, shed building, basic internal carpentry, etc.
An apprenticship program covers everything that you need to conduct yourself as a proffessional trades person for life. I just need to know some of thier skills to make a profit in a carefully selected investment. I have used trades textbooks, worked as a labourer to learn some skills, watched training videos for certain tasks, and built up a good set of professional tools (and practiced how to use them), any repeatable task that one person can do so can another.
Use due dilligence as your guide, don't attempt tasks that you don't know how to do, and learn what you can do and you can't.I've got to say there are some really dodgy overpaid tradies out there. I found that it is faster and easier, to learn a lot of the tasks that tradies do, and practice on a small job to familiarise yourself with procedures, then do a better job because you can focus on the only job you are doing, whereas tradies often are scrambling to complete jobs to make money from the next one…they are paid by the job, remember.
As to making money from reno work full time…hmmm, has anyone heard of the building industry? Don't they basically charge a full time lucrative living by working in property repair, removal, and creation? Why can't you!!Something else nina,
The plan I mentioned above will have you in your own home by christmas (a fantastic feeling), but also you should be able to get a better place if you go for trashed gardens, and a poor paint job. Both of these are easy to fix for cheap but also massively affect value. I let the garden go wild at my place for 6 months and got the place valued at $110k, i paid $300 to a gardiner to come in and do a total cleanup, ONE MONTH LATER valuation was $135k…I got a $25000 dollar return on a 20 cent phone call and $300 investment!!!!!!!
The place I am working on now with my new wife, we have taken from $115k to $200k just by fixing up some basic image problems. You will never get paid so well part time as working for yourself in property.Nina, I really feel for you…I started out by renting a caravan, nearer to my work. Then I drew up a budget and figured out what i could afford to pay off per week, I then drew a cirlce on a map of where i could live and get to work on time with having 1 hr a day to do renvation stuff. i then purchased a property on the edge of the circle for cheaper than i could afford, used the excess pw to pay for paint, nails, timber.etc. i then did a little project here a little project there, and built the equity of the property to borrow against as a deposit for another property closer to work. My goal is to eventually retire to the first property after buying and renovating enough properties to build a passive income of $100k PA. just do what i did.
All such concerns as petrol and such were well covered by the increase in property value, i even refinanced one year so I could pay the rates and build a picket fence.
You can do it!!
Great topic!!
Why can't you buy a house to live in if you pay $280 per week in rent?
I just jumped on ratebusters (good calculators) and you can pay off a house that costs $180k
1st home buyers grant takes out the deposit problem. Get a house that is run down for $160k. fix it up cheaply. redraw the sweat equity to purchase investment property. repeat.
I have done this whilst working as a casual with 1 kid by myself.You cannot build equity whilst renting.
By the way I still have the South Gippy property and will be extending, renovating, and retiring in about ten to twelve years…I'm 34…property works.
Hi, not a massive deal, but a nice story,
I purchased a little house in south gippsland on half an acre for $60k ($1k more than asking price) 100km from CBD. I recieved the first home buyers grant, and used the money I had saved whilst living for a year in a caravan park, as the 20% deposit. My mortgage repayments at the time were fixed at $75 pw. I have done minor improvements such as adding a picket fence, building a shed, and practicing many small projects to educate myself on reno work . As the property has increased in value I have used the equity to pay for my car when it needed replacing, my lifestyle, (I worked as a casual for three years), and just recently I refinanced the property which is now (after 5 yrs) worth $145k, to pay for my wedding and honeymoon. Considering that my initial investment was about $5k of my own money, and for the entire five years my "rent" was $75 per week, I don't understand why more people don't just put thier greed dreams on hold(giant house full of goodies, 1/2million dollar mortgage), be a little patient, and build up to larger things.
I am currently working on a house in Hampton park with my new wife (paid $114, now worth $200), which we are living in to then rent out, as we move into another which we will keep to live in as our base house, we then plan to reno three to buy one cash flow positive rental a year, until we achieve our goal of $100k after tax passive income PA.Great thread, very inspirational, just got married and we are looking at getting our first investment property for christmas.
With all the hard work you are putting in listing the hours and costs, you are letting us get into property with our eyes wide open and not stumbling around in the dark. Nothing worse than taking on a project only to be dissapointed with the enormity of the task before you.Keep in mind that a negatively geared property will not set you free from your wage/salary. Probably better to learn about easy cost effective renovations. Then follow a simple strategy
Stage 1
a. Buy, b. Renovate, c. Rent out , d. Sell for a 20-30% profit as a negatively geared investment opportunity.
Stage 2
repeat steps a-d two or three times
Stage 3
Purchase property following steps a-c, but with the huge deposit you now have, there is excellent positive cash flow. Repeat.
