The final module walks through reviewing a completed renovation project: reconcile your budget from purchase to sale, log every expense, and compare what you estimated against what you actually spent. A six-month search delay could cost $50,000 in market rise; one kitchen redesign saved $5,000.
Questions this video answers
Shoeboxed
$50,000 (example given)
Potentially $10,000 (example given)
$5,000 (case study)
Chapters
Congratulations. You've absorbed a ton of information about renovating during this course. In this, our final module, we'll bring it all together. We'll be reviewing the success of our renovation, looking at what went right, but more importantly what you could have done better. Also, how we can streamline the processes and techniques that will make us even better renovators. The next time round we'll also be discussing laying the foundation for the repeatable process of building wealth through renovation. Review, repent, repair and Replicate Albert Einstein once famously said, doing the same thing over and over again and expecting a different result is the definition of insanity. So avoid insane behaviour by learning to identify your mistakes and then not repeating them in your next project. There will always be room to improve your systems and techniques. At the start, the improvements will be many, but as time goes by you'll start to improve on the improvements and this is when the rubber really hits the road. This is the basis of my review, repent, repair and replicate process that I discuss in my book youk Property Success with renovation 2 properties, 1 renovation $1 million in the bank if you don't learn from your mistakes or capitalise on your learnings, you're missing a great opportunity. Time to Review the property has been sold or tenanted, the final invoices have come in and the project is now completely finished. It's now time to do a comprehensive review of the project and where better to start than with the budget? Your budget starts with your purchase price and ends with your property being tenanted or sold. As we learnt throughout the course, creating a realistic budget, monitoring and sticking to it is an essential part of renovating. Successfully reconciling the Budget during the project, you can log all of your receipts via shoeboxed. This allows you to keep track of a running total and have a log of every expense incurred. Alternatively, you may use a spreadsheet or even an exercise book. All we really need is every single expense in one place. And don't forget the preliminary buying, holding and selling costs. The first task to undertake is comparing your original estimated costs with the actual costs, systematically going through the budget from start to finish and looking for items that are over the original estimated cost. You can add an additional column and updated estimated cost column for future projects and add in any steps, items, services that you missed. This way you avoid not allowing for this expense again in your next project. Cost Cutting it's time to do another pass through the budget and look for areas where you could have cut costs. This applies to all areas building supplies, trades, construction methods and any other expenses occurred during the project costs of delaying your purchase. In fact, many people will find that the time it takes to find a property was a significant cost, especially if the market has moved up during that period of time. For instance, if it takes you six months to find a property and the market has moved $50,000 in that time, then maybe for your next project given you now exactly what you want, that is your buying criteria. You you know where you want to buy, what you want, how much you want to pay. You could engage a buyer's agent or buyer's advocate to find you the ideal property quickly. Now, potentially this could cost you $10,000, but it will save you money in the long term and get you into your next project quicker. That is why it's important to keep track of the properties that you inspected and keep really good notes. Now it's time to pull them out as part of your review. See how prices have moved in the areas that you've been looking at between the start and the finish of your search. Out of interest, you might also want to google these property addresses that you saw in the beginning and just see if you thought they had renovation potential. If another savvy renovator like yourself has bought the property now, they may have come up for rent or for sale after their renovation and you can grab some ideas from them. I've done this in the past and it's a good completing the circle exercise. Often I see examples of over capitalisation when I do this exercise. I keep out for those, but also I find some really good tips and things that I might not have included. Building materials. It's the job of every serious renovator to source materials at below the retail price. This means everything from the timber to the taps. Every item in your project's budget can be examined for a more cost effective alternative. Doing this can take time on the phone, visiting new potential suppliers and seeking out further information on alternative building methods. This level of review, however, can uncover massive savings for the next project. In the structural renovation we case studied, this review resulted in a simple kitchen redesign that meant a standard sized kitchen pack, not a custom size kitchen pack and that saved an additional $5,000.
