YouTube video by Jane Slagsmith outlining the four biggest mistakes when buying a property to renovate: (1) buying in the wrong location (must compare renovated vs unrenovated sale prices and ensure suburb matches your strategy; she teaches a 2:1 value-return rule), (2) skipping pest and building inspections (risk of unseen structural, plumbing, roofing, electrical or pest-related costs), (3) ignoring local zoning restrictions (may block extensions, subdivisions or granny flats), and (4) setting up finances incorrectly (lender policies can restrict construction, postcodes, or property types and refinancing can be costly). The video ends with a call-to-action to visit the author’s website and subscribe for more guidance.
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Hi, everyone, it's Jane Slagsmith here. In today's video, I want to tell you the four biggest mistakes that you can make when buying a property to renovate. Because let me tell you, these mistakes can end up costing you a lot. Now, mistake number one is buying a property in the wrong location. Yep, that's right. It's got nothing to do with renovation. If you are purchasing a property as part of a renovation strategy and then you want to rent it out or even sell it, then buying a property in the wrong location is one of the worst things that you can do. Now, not every property that needs a renovation can actually be renovated profitably. The way you determine it is if you can make a profit, you need to check out first what the renovated properties are selling for and what their unrenovated properties are selling for. But of course, that's not enough. And as I teach my students in the ultimate guide to renovation, they need to be able to add at least $2 for every $1 that they spend in profit to make a profit. But of course, there's other costs as well. You need to add on the purchasing costs, the holding cost, the selling cost if you're selling, and even capital gains tax. So where you buy is critical. And being able to assess one suburb against another quick, quickly, to make sure that you can do that assessment quickly and that suburb can actually match your strategy is a mistake that a lot of people bypass. Don't miss that one. Now, the second mistake that people make is not getting a pest and building inspection. If you're buying a property to renovate to increase the equity in that property, then not getting an inspection could be one of your greatest downfalls. There are so many money sinks that can arise. Now, money sinks is they're places that you just need to spend money without getting really any increase in the perceived value of the property. Now, these things include things like problems with footings, with plumbing, with electrical, with even roofing, and of course, pests as well. So you need to be aware of what these costs are because they could end up actually eating into your renovation budget, and you have nothing left to make your property look better so you can add the value of it to it. Okay, the third mistake is not checking out your local zoning. Now, every council is different, and there will always be different zoning restrictions. Now imagine you have plans to buy a house and put on a strategic structural renovation box on the back. You submit your plans to council only to find out that your block's not big enough. There you go. Your plan is ruined. Or maybe you want to subdivide or build a granny flat and this could equally be compromised by the council restrictions. So you need to understand your strategy to suburb match first. It's imperative before you buy that property, so don't let the location allow you to have to stick to one strategy. Work out your strategy first and then find the location that allows you to do that. Now the fourth biggest mistake is setting up your finances incorrectly. Now this is not specifically about the property itself, but it could definitely cost you in the long run if you get it wrong. Now many people choose a lender based on their relationship they've had traditionally with that bank or lender or bank manager. Or maybe the cheapest interest rate or maybe even reward points that are being offered. This is where it all comes unstuck. Every lender has specific policies on what they will and won't finance. Some lenders won't allow construction, others won't allow green flats. Some have restrictions on specific postcodes. This missing critical strategy to finance match is something I see nearly every week at Investors Choice Mortgages. This is a critical part of the research that you need to undertake so you don't let frequent flyer miles or cheap rates tempt you to get a mortgage that is not going to allow you to create the strategy that you want. And obviously the wealth. Getting this step wrong could mean that you have to refinance to another lender who will allow you to put your strategy in place. Now this could be very very costly and maybe not even possible. For instance, if you paid lenders mortgage insurance you might have to move and pay it again with a new lender or or you might have fixed your rates and you had to pay very high break fees. Getting this right is also critical. Okay, lots of information in this video. If you want more information head over to my website YourPropertySuccess.com and if you sign up for my newsletter you will get access to even more information. And don't forget to hit the like button on this video and subscribe to the channel because if you want to hear more we have lots more more to tell you. We really want to help you build a successful property portfolio so you can build a decent nest egg for you and your family. And as always, here is to your property success.
