Your Property Success Mentor September - 29-09-2016

Hey everyone. Welcome to the Call for September. Now, just before we start, we just have to do the mandatory disclaimer. So it's important for you to understand that you need to take care in applying what you've heard on this call or what you will hear on this call to your own personal circumstances. Everyone's situation is different and all of the information in today's call is based on our personal experience and opinions and is not intended to be specific to your circumstances. So we're not real estate agents, financial planners, lawyers or accountants and are not liable for any loss, damage, misunderstanding caused on reliance of any of the information provided or inferred. Now, the other thing is we routinely record these mentor calls and reserve the right to share the content down the track. So by participating in the call, you're acknowledging this and if for some reason you would not like to be included on a recording, we just ask that you contact our office on 1-300-963-646. It's 1-300-963646 within 24 hours and we'll edit you out. And tonight in particular, we'd like to take some questions about renovation because we're actually planning a renovation podcast episode in the next couple of weeks. So please, please ask us anything about renovations night and you might find yourself on the podcast in a couple of weeks time. And with that out of the way, over to you, Jane.

Hello everyone and welcome to the Call for September. Oh my goodness, the year is getting away so fast. Now we have lots of exciting things to share with you tonight and we look forward to hearing from you as well. And a shout out to the your property Success club members who've been given a very special invitation to join us tonight live for this special renovation edition. So welcome and it's lovely to have you with us. Now we've been very busy here and we've been doing a lot of things, so we've got a lot of things we want to share with you. And I've got some show and tell, as does John. So settle in, make yourself comfortable. We usually try to finish within an hour and a half and often don't. But we get to everyone's question and make sure that if you've got a renovation specific question that you write it down and don't be afraid to put your hand up. Now these calls are exclusively for my mentoring students, the students of the Ultimate Guide to Renovation and my Investors Choice Mortgages diamond clients. So if this is the very first time on the call for you, then a Very, very warm welcome. Please don't be shy, say hello, we're all here to help. Now, these calls take place 8pm Eastern Standard Time on the last Thursday of every month. So you've got a lot to look forward to if you've just joined us. And of course, you receive a lot of email reminders each month. A day out, an hour out maybe, so you won't miss out. And if you. And you've got a burning question and you don't feel that it's being answered for you in the private Facebook group for the Ultimate Guide for Renovation, for instance, then you can actually call us on our special message line. 130076 111.

So that number, John, 1300 76, triple 1 9. I actually checked that before we came on and nothing.

We live in hope, don't we? We know the people are on. When they've got a pressing question, they come on live. So that's a good thing. Now, John, he's sitting beside me as always, the co creator of the Ultimate Guide to Renovation. Hello, John. How are you?

I'm well, thanks, Jane. Hello, everyone.

And do we have. Do we want to go through some of the technical things, if people have any technical issues and.

Sure. It's coming up though, I think.

Oh, is it? Oh, good. There you go. I'm jumping ahead.

I know.

So it's show and tell time.

First time.

First time. It is my first time. There you go. You wouldn't think you've got like three years of monthly calls here in the bag, but hey, so John, over to you. You've had a very exciting month, haven't you?

Oh, I have, yeah. Okay. So can I do some show and tell?

Can I? Please do.

Let's see if I press the right one.

Now, for those of you who are new to this call, John and his business partner have been in the development scape for quite a while. And what have you been doing, John?

So, well, the last call was a month ago. The thing I like about these calls is, oh, that's the wrong one. Let's come back to you.

I think that's my show and tell.

That's your show and tell. There you go. That's my show and tell. That's all I need to show.

That's the important one, isn't it? Sold.

Sold.

So John's been working on two developments and one has the one that started after the first has just completed.

Yeah, this is.

And congratulations, round of applause.

Thank you.

We've all been sharing in this with you.

Yeah, it's been interesting and interesting month to month to kind of check back in and just see how. Because it seems to go very, very slowly. But checking in from month to month that. Yeah, it's good to. It's good that last time we're on the call it was going on the market. Now it's sold. So it was good. It passed in and. Yeah, passed in for about, well, about 70 less than we wanted. And so there's a little bit of argy bargy and the normal negotiation that. That goes on and which I kind of, kind of like these days, to be honest. I don't mind too much.

You're into that, were you?

Yeah, don't mind as long as you do it with a smile on your face, you know. But in the end they, they left because it was, you know, behind closed doors after the auction and they. And they left and said, no, that's it. And then they called back and yeah.

I gotta say, I turned up with my family the day after.

Yeah.

And we had an exclusive viewing of someone else's house by then. But gosh, it's beautiful. Those. I didn't really get a full appreciation of those beautiful oaks floorboards until we were there. They were fabulous. That's, you know, what this amazing. We looked at this last time. It's almost the same as the artist's impression of it, which is great because often you see, you see the artist.

Impression and then you're like really false advertising.

Yeah. So that, that is fabulous. And there's those floorboards and really nice built ins and nice areas and such a wide hallway too, you know, So.

I was interested that. So what you, when you were there, you were saying something about the floorboards. They weren't the way you expected them. What, what was different from the photos?

I guess the just looking at them in situ rather than a photo of them here. You know, you can see a few. Your eyes drawn to the imperfections as well. Whereas when they're in context of the large ceiling and the large spaces, they're actually the light and brightness of them, you know, you don't see any of those kind of interesting. And they're not imperfections, they're just natural.

Yeah.

Natural perfections potentially pay a lot of.

Money for those imperfections. Yeah. Oh, that's interesting. Yep. So, yes, most people would have seen these last month, but I thought I might as well since I was going to show the for sale sign, I might as well. Yeah.

And that's just the normal kitchen. Then we have the pantry, which is the Butler's kitchen, which is bigger than my kitchen.

Same same.

This is fabulous. Just the lovely spaces and just the, I mean I just, I just, I can understand that kind of downsizer. Market was single mum and older kids at college, wasn't it?

Yep.

So yeah, it's just congratulations to you and your partner for pulling this all together and the design features and I think, you know, are just so amazing and obviously the quality of the build with your attention to it, they're going to be happy homeowners.

Yeah, thanks. Thanks. That's the last one.

And that's the funny thing. See that picture of the bathroom we walked in there, I was like this is exactly from the back of the box. On the back kind of module 9. Yeah, module 9 in the ultra guarded renovation. This is the, you know, we talk around that low cost glass rather than a window having that pane there. It's pretty much the same bath and vanity as well. Yep.

Yeah.

So nothing once you get, get into it.

Slightly different bath. Just the, the bath in the module 91 because the demographic was slightly different. Lower price point was an acrylic whereas this is a composite stone.

In actual fact, that looks like one of those Japanese tubs where it's actually a lot wide.

It is. It looks funny in the photo, doesn't it, because of the angle of the lens.

Yeah.

But it looks like a little kind of, you know, pea pod down there.

And having said that, I think what now you're up to handing over with the builders tomorrow or something.

Yeah, that's with the other one. Have I got that there? No, I didn't bring that one. Yeah, that's, that's with the other one. So with the other builder. That's, that's the tortoise, not the hare.

Yeah. And, but that's the higher, higher end.

Yeah, it's actually the, the one I like the most out of the two side by sides. It's, it was the first one we took on. It's. We've had a lot of trouble with that builder. It wasn't an ideal choice but the actual place itself is really nice. It's, it's aimed at a, a downsizer that's probably coming from a 3 to 4 million dollar house. So we had to have the, the spec. Right. And so we spent a lot of time with the little details and stuff. So I'm really proud of that one. So hopefully it'll do well and we'll be rewarded for all that demographic research.

We, we don't have hope as part of our Strategy, John.

Yeah, that's right.

So, and what else have you been doing? Well, preparing for? We've got the podcast with Matt. That was a fabulous interview.

Yeah, that is good. That is good. So really looking forward to that. So that's out tomorrow, actually, the Matt Jones one. I think we'll send an email out on Monday. But yeah, that's excellent. Excellent podcast. I really like that. I mean, he's a great guy, but such a knowledgeable guy. Spent so much time educating himself, paying for mentors and it just shows, you know, he's just. Yeah, really paid off for him and he's just.

It was really hard doing the interview with him because I was so fascinated what he was saying. I forgot that I had to actually ask questions. I was like sitting there with my notebook going, oh, so I hope you guys like it. Make sure you get onto the YourPropertiesuccess.com podcast page because you can download the transcripts there and all the content. So I find that really, really handy. And share it. Don't make it a secret rate and review us. We're trying to. I think we should be trying to hit 50, 50 rate and reviews by the end of next month. What do you reckon?

Yeah, that'll do. How many? At the moment, about 20 something.

22. Yep. So all good. And of course we ran for the ultimate guide to renovation students. That fabulous Sydney workshop. Hot spotting workshop.

Do you want your show and tell?

Can I show the show and tell here? Bring up my pictures. So this is great. We invited the alumni to come along to this course and we had this couple missing there, but we had Leslie who turned up now. She'd been up to 1:00am dot mapping and her husband had said, my gosh, I didn't realize you had to do homework. I thought that you were doing the dot map in the workshop. She said, I am, but I've done one for every. Pretty much every city in Australia and I just wanted to finish this one off to show Jane. So she had Newcastle and Wollongong and Sydney and Melbourne and Brisbane. So she had. She'd been.

For those of you that are still sitting on an empty Ma Week 6, shame on you.

Exactly. So, and this is, I guess, the. For those who are thinking about joining us, the ultimate guide to renovation this year. The get your map in. Buy a map now and get your dots. We've worded up all the dot supplies that they're going to have an influx of people, but we essentially knocked over this Sydney dot map within about an hour. I Know Brisbane took us and Melbourne takes us about half an hour. So a lot of people spend weeks doing the dot map. So it was really nice having a group of people doing that. So a lovely group. And there I am teaching. So buy a lot of reports there. Residex, Ripe House. Hot spotting from Terry Ryder. Lots of reports that we go through and we started with our dot map. It was interesting. I was just counting up yesterday those 52 suburbs that had a 2% capital growth incremental change that we came up with from the dot map and then from the Residex renovators reports. The Residex predictions report There was another 12 suburbs there. We had about 26 suburbs that had come up on the report for hotspotting Terry Ryder. Nothing came up for Ripe House.

Not for New South Wales, no.

And then we put all of those through our special new which were very exciting to put into module 2 for the ultimate go to renovation a new software and put in the filters and only four of those suburbs actually stacked up, which is interesting. So when we did the same thing in Brisbane, we had about 12 suburbs. So interesting.

Yeah, I actually thought it was 14, but I thought it was a few more. But yeah, it's a tough market but it just shows that how good that process is, isn't it? That you can have suburbs on in some cases on two reports. But it still didn't make it through our criteria.

Well, just things like over 30% renters and over the median yield. And you what are the filters we look at below the median price for sales the city and over, you know, between over eight sales for the month make sure that there was just activity there. So we had a lot of, I mean that's what, four of the 30. But a lot of filters for those suburbs to jump through before we came up with our final four. So good suburbs and those people who attended that workshop are out looking now.

Yeah, and it's great to finally meet people, isn't it? I mean all those guys have been around for quite a while. There's in the Ultimate Guide to Renovation. So one of the guys was saying that he got it in 2000. When did he say? 2014. And he did all the modules, went and bought a house four months later and renovated it and did the thing and now he was going back through the course again, planning to do it again.

It's amazing how many people actually go through with everything. Well, I'm going to show you my, my hall of fame that people are starting to tell us of what I've said Tell us about your success. It's like, oh, so. And we actually then jumped on a bus and went and had a look at a property. Now how about this? You know, I thought that orange glass was only reserved for the shower, but no, you can also have it in the vanity as well. And what I particularly liked about this is that kind of fish spout that's. Oh yeah, in the bathroom.

So in the tile spout and the.

Wallpaper throughout the property was pretty. Pretty sp special. And no, no less here in the bathroom. And then we had, we had everyone out the front having a bit of fun. Now look at this. This is a red brick, boring property. Now because we like to have these workshops at nice five star places. We hit Coogee Plaza. So on the bus we could really only be about a half an hour away. So here we are, Maroubra at a house that, you know, arguably in Blacktown would go for 700 Dubbo 450 Maroubra 2 mil. Just goes to show you the land and the location is so important, isn't it? So unfortunately we were thumbing that down. So don't show that agent that and. But yeah. Oh, actually we've got one up. Oh, someone's sidewards. So look, we had a lot of fun there and a great group of people and obviously they're still chatting. I think we've got one more image. There's that. That glass again. Don't you love it for those people on here? What do you reckon? Would you. Would you actually renovate this? Put it in your chat box. A question box. Just tell me, would you renovate that wallpaper or do you think that retro look.

I think that's what the agent had in mind.

I don't know, he did some pretty creative photography there. So yeah, I was pretty impressed.

But there was no staging. There was. They left it absolutely.

As is, as Mum and Dad. Oh, so there you go.

The elephant pillowcase.

Yeah, I do like the elephant pillowcases. And then earlier this week I was invited. There was a group of the top brokers invited to a special MCG breakfast with Dipper from Hawthorne fame. So there we are. Now, Dipper, to his credit, turned up straight from the Brownlow. Absolute professional. So what was that? Wednesday morning?

Yep.

Gosh, Wednesday morning seems so long ago.

Long week.

Yep. And he. So he was. He's got 17 speaking engagements between now and the grand final. So legend but, you know, really nice guy. And the whole talk that Amp had invited us to as mortgage brokers was about launching their new product and, you know, commitment to the broking profession, et cetera. But it was all around goals and goal kicking. And so who better than Dipper? And if you have a look at my Facebook page, you'll see a bit of live streaming of his chat. But he was really. His love for Hawthorne was amazing. And he talked about this story where he turned up as a 16 year old. There was all these people in suit and ties sitting around the table and his mum and cooking up spaghetti and his dad there having homemade red wine. And he said, I've just sold you. I've sold you to Hawthorne. And he got sold to Hawthorne at the age of 16 and he spent, I think, 17 years there or something. I'm not into football. I can just say I was impressed. But here's the thing. He was saying that every single new player that goes to Hawthorne, the very first thing they do is have a history lesson about what it means to be Hawthorne and be loyal. And they go through the. You know, we had three years of not one single win and we still never gave up. And I think, you know, with property investing and renovation, I took a lot of, I guess, some of his messages away because sometimes things don't go right. And I was speaking to a client late, late this afternoon and who had bought in a mining town and had, you know, rent over a thousand dollars a week, and now it's less, less than that and the value has gone down and saying, you know, it all, it all seemed to go backwards. I just got the wrong location. So, you know, sometimes. And he was saying, he was being very philosophical. He was saying, you know, but I'm not going to give up. It's all about the long game and I know I have to hold this through and there's some upside. So, you know, some of those things about kicking goals, sometimes they can be delayed, but not always. So it was a pleasure being there at the mcg, had to go through security and good luck to the dogs on the weekend. So, as in. As in the Victorian sports mad Victorians are. We've got a public holiday for the footy on Friday and then next month we've got the Melbourne cup public holiday. So there you go.

Did he start his speech by letting you know you've been up all night?

Yep. And he started his speech saying, I am the greatest and I am amazing. And if anyone ever counted anything he said, he said, obviously not a Hawthorne supporter, so very funny man and it was a pleasure to chat. So what else have I been doing? Oh, well, from a mortgage breaking investors choice, we have been reconnecting with a lot of our clients and doing formal mortgage reviews. But I'm really proud to say I really took a bit of a stand and got a upset with the RBA not passing on the full, I'm sorry, RBA rate cut the couple of months ago. But the bank's not passing on the full rate cut. So been facilitating some one on one negotiations with the lenders on behalf of the clients to get some savings. And I'm so far up to $20,000 a year in savings of interest savings just by doing some hard negotiations.

So how many people would that be roughly?

That's about eight people. I think the best that we did was there was one lady that. What have I got here? $5,400 we managed to secure as a discount from a 4.82 down to a 4.05. That was pretty exciting.

And how are you going, are you threatening to go to another lender or how do you go about doing that?

Yeah, so this is the thing that you should, you should do. Look at your rates at the moment and what you're being charged. There is a lot of competition, especially because a lot of the lenders have had to take a step back from the investor space. So for home mortgages there's a lot of, I guess, competitive nature between the lenders. They're offering hundreds of thousands of frequent flyer miles and, and the like. So you know, find out what your rate is, call and ask to speak to the retention team and you know, ask them is you know, your broker suggesting that you move somewhere else and is there something they can do and just see if off the back they will do something for you. So there is some, some rate savings to be made but in the event.

That you had to go somewhere else or if you wanted to go somewhere else, what's involved in that?

From a. First and foremost, don't burn any bridges because a lot of people and I spoke to a client just this afternoon and we did a calculation based on the new way that the bank service lending and in fact theory, he couldn't actually service his current debt, let alone take any more, whereas he's paying his mortgage, he's actually paying a lot more back than his minimum rate and doing it comfortably. But that's just the way that the lenders now are actually stacking and buffering their interest rates. So a lot of them are taking a principal and interest over 25 years at 7.25%. So your borrowing capacity is A lot less. And they take that on the existing debt rather than maybe the 4.5% that you're actually paying interest. Only be aware that there are savings to be made out there, guys, and, you know, try to go and negotiate for it. I did have someone tell me that the bank told them yesterday, tell us who the competitor is and get it in writing first. So.

Oh, really?

You know, they're getting a bit tougher, which is interesting, but, you know, so that's all good. So that was pretty exciting to be able to, you know, save that. And if you think most people don't touch their mortgages for, you know, 10 years or so, that 20,000 a year, we've just saved, you know, over $200,000 for clients, so we're partying. The other thing I think that has surprised me, speaking to a few current clients, is that when we talk about, look, there's a couple of thousands of dollars of savings here. It comes down to it's really convenient for me to stay at my current bank because I've got direct debit set up.

That's what Ben was saying, wasn't it? Yeah, Ben from Empower wealth said that. Said he had clients that would. Even though he could get them savings, they would not change banks because of the inconvenience.

I was speaking to one lady last week and she's saying, but I've got my newspaper set up with a direct debit as well. She says, there's so many things, I just can't do it. Well, we're talking about two and a half thousand dollars. It's a holiday, and she's going, oh, it's too painful.

Worth a little bit of paper.

I know. So, you know, I'm all. I'm all for paperwork to save a bit of money. So, yeah, all in. So that's been good. And our hall of fame this month on the Facebook page has been great, too. So we had Gabrielle, who, if some of you recall, we did a full review of one of his properties that he was. He's looking. Pardon me, Got a coffee? He was looking at buying. So we did a review of that and he decided not to purchase it. So you could see that in the recordings for those in the Ultimate Guide of Renovation and Diamond Clients. But he has just moved on and bought a property and started that renovation, so that's exciting. So he's sharing some pictures with us there. And just a couple of the last few of those that have sent us through their stories as well. We had who we got here, Graham he talks about, you know, I'm loving and he was watching the your property success club videos and he was saying he's got two properties at the moment. And I can say I've learned more in your two videos than I had tried to learn in 12 months with Google searching. Well done. So that was really nice. And then we had Nathan who said, you know, basically his wife and himself have been purchasing properties. They've been using the right group as buyer's agents to help them out. They've been adding equity, they've been getting cash flow. They've been doing cosmetic renovations around Logan in the last couple of years and just started purchasing in Geelong as well. And he said, I'm so forever grateful for having the opportunity to be a beta tester for the Ultimate Guide to Renovation course and will always remain one of your loyal followers. So that was just last week. So really excited about, I guess our, our people and our clients kicking goals because after all that's why we're here for and we want to hear what, what people are doing. So been a big month. And I guess the other thing is we've got a lot of positive feedback on our podcasts and we've been preparing for. Actually I should just show that in my, my Facebook page, but preparing for the webinar next Thursday night, the 6th of October with Bryce Holdaway from Location Location Location Australia and from Empower wealth and from the Property Couch podcast. And we'll be reviewing some of the properties that have been put up on Facebook and gee, there's some beauties on there. Yeah, I reckon I just one of them, I was like, you know, this is a complete pull down. So. But anyhow, there's some really good. So go to the Ultimate Guide to Renovation Facebook page.

That'd be really good actually because he. It's a nice complementary skill sets. I think him being a buyer's agent, he sells a lot, a lot of properties every week, week in, week out. So I'm looking forward to that.

There you go. Well, we've got properties from all over Australia. I think the only one we haven't got is from Canberra so far. So, you know, all very good. So lots of fun. That's about it.

Very good.

So we should probably move on to the exciting stuff and get to the questions. But first let's do how can you talk to us?

Yep. So when you have a question, all you need to do is raise your hand by pressing the little hand icon in the sidebar menu. It's quite small and hard to See, but by clicking that hand, you'll notify me that you have a question. And when it's your turn, I'll unmute your line. When I do unmute your line to take your question, you'll get an automated message that says your line has been unmuted. And then you know you're on. And you can also ask a question by writing your question into the question box at the bottom of the control panel. And we do try and get to all of those questions, but we do give priority to the spoken question just because it's a lot easier for us to understand the question and get to the bottom of it. And it's also a good benefit to everyone else too. So there's never such thing as a silly question. We just ask that you limit your to one question the first time round, maybe a short follow up and then just we'll, you know, put your hand back up and we'll loop back around and pick up your question again. Normally there's very few times that we've, I don't think any. Ever.

We never left a question unanswered.

No, that we've left the question unanswered. So that's all good. And Yep, that's it. Jane, Housekeeping over.

Okay, tech support. Well, just a quick little reminder, this is not a tech support call. If you are experiencing any problems with your videos, they won't work or any anything else, I'm not really the right person to ask. So just email us@supportourpropertysuccess.com and we will get the right people onto fixing that straight away. So, John, renovation, special strategic renovation. Now we really define the difference between a renovation for renovation's sake. You know, you could get in there and renovate pretty much anything to a strategic renovation. How would you define the difference?

Probably strategic renovation, I guess it's about every, every decision, every renovation decision that you make is strategic and quantifiable. So it's not if you're doing it for yourself, it's emotional, it's based on your wants or you know what you like. But this is just, you're only making that change or making that improvement because it strategically adds value to the property and value that you can quantify. So I you look at another comparable property at the renovated level and that's the standard you're renovating up to. So that's probably how I'd define it. What about you?

Well, I think strategic to me really is part of a long term game plan. If I think of a Strategic exercise or strategic plan. I think of each component has its place, but it all contributes to the end goal. And I think no more than property investing and renovation. Whenever I talk to people about their goals and look for down the Future in maybe 5, 10, 15, 20 years, and then we bring it back to today, it's around having that strategic action plan that says, where am I going to spend my money? Where am I going to get the best value? And it's almost looking at that cost benefit analysis for every single decision. So, you know, like you said, it's not emotionally based. You know, it's not based on. I don't have double shower heads in my bathroom at home, so I want them here in my renovation. So for me, you know, it's very much about every decision has to be able to be justified. Yeah, I agree.

And it's, it's. You often see things that require renovation. There's, there's improvements that can be done. And this is the trap that you look at it and you think, oh, I could, I could make that better or I can improve it. But if it's not adding that value, it's, it's.

You have to question why you're going to do it.

Having. There's a fellow that asked me to look in on his renovation. It was in Coburg and around the. Wasn't even on the driveway side of the house. It was on the back section and the neighbor's side, you know, along the, you know, 1200 wide gap between the house and the fence that he was going to replace all the weather boards. And they were, you know, there were some that were a little bit rotten in spots and so on, but nothing that a bit of builder's bog wouldn't fix kind of thing. And there was some peeling of paint that would just scrape off and so on. But he was just adamant that he was going to replace these weatherboards. And I said to him, but this adds no value. All you're doing is spending money that's coming directly off your profit. But he just couldn't live with himself leaving them on there.

And the thing is not only spending the money, but it's the time, you know, you lose that time in, in the project as well. And every, every day is a dollar. And you start some of those exercises and you pull off something and something else goes wrong.

Yeah.

And it's never just the job, is it?

No, no. Then he wants to put insulation in the wall. Yeah.

So all these things happen. So it hurts. It hurts leaving some jobs undone. But Sometimes it don't deserve to be done.

Yeah, no, it does. And the way I look at it is you can come back and the idea is to generate equity in the property. That's the goal. So if you can generate equity in the property, then get a little bit of capital growth over the next months, years, you can come back and picks up those bits and pieces as part of the maintenance, but you then got a property that's actually working for you. You're not starting off behind the eight ball.

Absolutely. So I guess it brings us to the topic for this evening, renovation. And it's really important why I think property investors should include renovation as part of their strategy. Now, when we talk about renovation as part of your strategy, it does not have to be immediate. And if you saw the August Australian Property Investor magazine, you know, I was case studied in one of the renovations that I did last year, and that renovation was actually of a property that I had bought over 10 years previous. And it had still, you know, it had, it was fine previously, didn't need to have the renovation done, but it got to a point down the track that I did the renovation. So, you know, I think a lot of people get fearful of the fact that, you know, they're, they're not good on a hammer or their property's interstate or, you know, there's all these worries that they have around renovation as a strategy. It is an active strategy. It is an active strategy that, you know, if put in place, you can increase your equity, you know, you can increase your rent and you can pull out that equity and go and purchase again like I did multiple times. But it has so many benefits to it. But even if you don't renovate and you sell with it in years to come, unrenovated, you actually open up a whole new market of people who want to renovate. So, you know, you're actually building a little bit into the marketing of something that other people want as well. So I think, you know, when we look at strategic renovations, you know, it's so important that property investors consider it as an option.

Yeah. And there's lots of people that probably are into property investing that wouldn't be into renovation. And, you know, you know, so I certainly don't watch the block or anything like that these days. But, yeah, and I could understand why they'd say, I'm, you know, I'm just not interested in going down that path. But I think there's enough arguments for it to seriously consider it. Even if you're not interested in renovation that as, as you said, you're adding the equity and even things, you know, simple things like a saving on stamp duty. So you, you, if you're. You'd assume by buying renovated, if you buy it well, and buy it strategically, that you'd be buying under market, so there's some value there. So you'll be paying stamp duty on the, on the purchase price rather than the realized value once it's renovated. And just the fact that you can boost the rent up, you know, leverage sooner to grow that portfolio, there's just so many pluses that even if you spend a little bit more getting a project manager or however you do that, it's such a worthwhile process.

Absolutely. Well, we're about to go to people's questions, so put your hand up if you have a question about renovation, because. Well, any question really, we'll take, because we're here to answer your questions, and we know some of you have burning questions. You know, I think the, the, the reason that I looked at renovation for my first property investment was that I didn't have the money to buy the fabulous property that I wanted to have. And, you know, rather than being overcome by the fact that I couldn't do that, I wanted to see something that I could do. Yeah. And I could renovate. And it was obviously not a, I don't know, hereditary school. It was one that I had to learn. So, you know, I, I became a mentoree of those who had renovated before by reading books on it and, and speaking to people who had renovated. And, And I used a lot of the trades that I had come quote about. You know, if you've done this before, you know, what opportunities do you see here? And, and often those guys really enjoy having those conversations. Absolutely.

They like sharing their knowledge. They're a great resource, and people. So often they're underutilized because I think there's. There's a bunch of people that are just, what would you say, cautious of tradesmen or, or they kind of treat them a little bit like the dodgy taxi driver, you know, And I think that's the. It's the wrong attitude because, I mean, certainly there's dodgy.

You were a tradesman, so you're a little bit biased here.

I am, yeah. Yeah. But. Although I can probably. Probably be pretty harsh at times, too. But I think they're a great resource, and if you just ask them questions, most of the time, they will do it. And even from a selfish point of view, you can ask the first guy quoting on the wall a question and then you use that information to pump the second guy and the third guy and the fourth guy kind of thing. So even from that point of view it's a great way to build your knowledge and get across what needs to be done and not get ripped off.

You know, we should probably do a podcast at some stage or a webinar on the most underutilized people that you'll come across because we've just picked up on tradesmen, on tradeswomen, you know, the fact that you can utilize their knowledge and skills. Now I've used that, the tradespeople in the past to actually project manage my projects by getting them to recommend people that they've liked and liked working with.

So if you really chippy will happily manage a project too. And they know all the other trades.

Yeah. And if you've got someone who you know does the job well, they want to work with other people who've done the job well as well. So they're going to recommend other good trades and then they're going to ring them up at night and say, mate, you know, don't come in at 7:30, the tiles aren't set yet, come in at 11. So they're kind of managing without you paying that management fee. Then there's the council, you know, using the town planners for questions about, you know, I'm thinking about buying a property here, what are the issues, you know, or my strategy is a granny flat or a subdivision or whatever it is, you know, using that knowledge. And even if you don't want to talk to people, get onto the council website. My goodness. They've spent millions of dollars on consult looking at gentrification and attracting population to the area and their action plans. They're all up there, they just don't advertise them. Other people that you could utilize. My pest and building inspector, I always ask them, you know, well, you know, you've said there's a bit of trouble here. How much would it cost to fix it? Or if I was going to put a wall in here, how much would it cost? Or if is this a load bearing wall? If I was going to pull it out, you know, so you can utilize those people. Who else? If we were going to come up with, off top of your head, real estate agents. Oh yeah. I mean we talk about. Everyone thinks the, the dodgy trading, trading is going to rip them off. They think the real estate agent's gonna rip them off.

Yeah, I think that's a really good point. I, I was at a open for inspection once And I'd been chatting to a girl and she was into strategic renovation and she was looking around, doing her due diligence in this particular suburb in the north of Melbourne. And the auction finished and the house sold for more than a, was advertised for like. And these guys, I'd been doing some tracking and these guys, notorious were over quoting by about 10% at the time. And she walks up to the real estate agent as the people are kind of still, still mingling around, and absolutely tears into him about underpricing this house. And the, you know, the, the other agents start gathering around and there's a big scene and everything. I thought, well, you're not really building relationships there, are you?

Where are you going to be looking next week with the same agents?

Because they all know each other.

Exactly, yeah.

And I think that's a mistake getting in. I mean there's, it's interesting because Matt talks about, Matt Jones talks about this in the upcoming podcast and makes a really good point about building those relationships. And he said about one in 10 proves fruitful. And there's probably nine out of 10 that don't realize the value of an ongoing relationship. But he gets in front of them with his criteria and he calls them up every week and just keeps that, that relationship going. Because you'll find the best deals nearly always are off market by the time they hit the realestate.com and go to auction and so on. Occasionally you might be able to get one, you know, prior to auction by putting in a quick offer or if you're in a, you know, in a market that doesn't have auctions yet, sometimes that can be a bit easier. But best deals I've always got have been off market.

So one of the spreadsheets or the templates we gave the students in the workshop was that template to give to the real estate agents, say, this is my buying criteria. Ring me when this comes up. And you know, we talk to buyer's agents all the time and somewhere between 40 and 60% they say, of the properties that they pick up are off market. And if you think about it, real estate agent has to go through a marketing campaign, turn up every Saturday. They have to have time, resources, expenses. Now if they could go to someone, say this is the $550,000 property on 600 square meters with a corner block that you're after, they can sell it sight unseen, but they can sign up the potential seller as well by saying, I've got someone who would like to buy this. So you know, it's in their interest. So, you know, another undervalued member of the team. And I'll tell you who else is undervalued. Just saw coming to me. John.

Yeah. Okay. Who?

When I. In particularly, when I'm looking at buying units and you get the strata management plan, you can see who lives there and who doesn't. Knocking on the doors of the people who live there and saying, I'm thinking about buying this unit. Can you tell me a bit about the block and what's going on? And they come in for a cup of tea or door knocking on the street. I'm thinking about buying the house down the corner. You know what's going on? And they might be the ones that say, oh, she left him. He's desperate, he's got to sell the house. Like beauty or the fact that they moved out because their neighbors are in a war with them. And don't expect that you're going to win it yourself if you take over. So some really. I mean, I think we could go on for hours.

Yeah, there you go.

There you go. So back to our topic at hand, renovation. So does anyone have a question? And we'll just see if we've got. Because we do have a few here have come through on email that I'll pick up. So I just saw one now. Is that Jeremy, who sent the question through, who's actually there? Maybe, maybe not.

Okay, so written question from Jeremy. Jeremy, if you are the Jeremy that's written a question, can you just put your hand up? Or Jeremy, if you've got a question, would you like to put your hand up?

Because we do have a question from Jeremy which I'm about to read out.

But it may be a different Jeremy.

There you go. When there's so many people, you never know. He says, I'm interested in hiring an experienced renovation consultant who can come and have a look at my place that needs renovation. I would like him or her to provide advice about what I should do with the whole house, top to bottom, including replacing the kitchen, bathroom, landscaping, what to do with fake brick cladding. Always a question. Interior, exterior, how much will they cost? I would also like to get involved in the renovations, such as painting and landscaping. That's all possible. And I may also need a renovation project manager, as this is my first project. I look forward to hearing from you, Jeremy. So this is a really interesting question because it's not something a lot of people think about that there is a group of people out there who are experienced renovation consultants who are prepared to assist you And a good friend of ours is Jane Ells Bennett from hotspace and we spoke to her earlier just specifically about Jeremy's question and said tell us your rates so we can pass them on. But, but you know, there are people.

That, so we should just explain what she does. She, she basically you send her photos of her or you know, obviously you have the conversation, give her the brief, but you send her photos of all around the, the house and it can be, you can be anywhere in Australia and she'll put together basically a renovation plan for you based, based on adding value to the the property.

And the great thing about Jane is that, you know, what was I going to say? So these professional people, what you kind of think is that there might be an interior decorator, for instance, that can assist you. And interior decorators are usually looking at color, but you've used one for design aspects also for kitchen designs etc in your development. And I know my mother was an interior decorator and the remit goes from everything from feng shui and how to, you know, create your wealth corner through to, you know, a complete up and down choose the curtains and the paint and the pillowcase cases, potentially not an elephant pillowcase like a picture we saw earlier. But you know, so there is a whole remit of people and it's traditionally considered to be an interior decorator, but the renovation consultants are usually within an area and you know, you would. And I know that Dulux had a deal going at some stage where you'd have a Dulux interior decorator and it'd be like 150 and you'd get that back if you paid for the paint. So there's a lot of those kind of people who can help you.

Color consultant.

Yeah, but which is still good. Yeah, absolutely. And they're obviously interior decorators who can help with the whole gambit as well. But you know, people like hotspace, I know that Jane's got kind of like a three hour consultation and as John said, you know, basically send her the photos and it'll just be for specific little areas, like two or three areas and she'll do a design consult over the phone or if you're in Brisbane, she'll go to the property.

Product recommendations. Yeah.

And so that's around about, that's less than $1,000. But if she comes and does a full consultation and what you're talking about here, Jeremy, exterior, interior, moving walls. You know, I've seen some of the plans that she's put together and it's, it's down to the color and down to the tile, where to get the tile and what the color of the tile is, et cetera. And you know, even landscaping and creating that space. So those that kind of consultation for the the full out would be. It's still less than 3,000 do so money well spent especially if you adding value. And she has an eye for. And these renovation consultants see if they have investment experience.

Yeah, because she's got good pedigree. She's Kiwi originally and big house flipping. House flipping is very popular over there with no capital gains tax and she was flipping for years. Yeah.

And. But she has an eye and this is why I say find a consultant that has an eye for the investor space so they're not doing the fancy high end when the high end doesn't match. So she really does that comparable sale analysis or look for someone who will do that and actually match to the market, match to the demographic and match to what the renovated fixtures and features of properties that have been renovated for sale are showing. So, you know, you can definitely do that. Jeremy, and congratulations. You want to get involved in the renovation and painting and landscaping yourself. John and I have both and our partners have both been on the tools and helped out in, you know, filling up bins and learning on the job, etc.

Great way to learn. Great way to learn.

But if you did want to get a renovation project manager in because it's your first project, I guess the thing is that you could for instance pay for project management which would be around about 10% of the renovation cost. I did hear yesterday quoted that someone charges 3% of the purchase price as well. So a renovation consultant, renovation project managers over in Perth. So that was interesting. But I mean as you probably have heard us talk about before, you know, I've used in one of my last renovations, my rental manager to get the quotes for me and manage the project after I'd done the validation of the trades that I wanted there and I did that remotely. So from Melbourne to Sydney, the property was in Sydney and I did that in Melbourne and that was at no extra cost. So often the rental managers actually even have someone on site that likes doing that.

So really good of it that way that the, the value for me is in the almost the ip, the intellectual property Y so that adding value comes from, you know, understanding what you're renovating up to, you know, the target market, all of that stuff that we teach, the actual carrying out of the work isn't that difficult once you know what you want to put in there. So it's, I think you're better off paying for someone like a renovation consultant who's got experience in, in you know, flipping or property investing or whatever that that field is to that can add the value that brings that IP to the table or learn it yourself and then the actual carrying out of the work or just going through the logistics of, of, you know, carrying out the work. You can get a carpenter or as you said, a rental manager or someone like that to oversee that because that's not really where the, with it. That's not really the big ticket item in the, in the whole thing, you know.

Absolutely.

The, the design and what you do.

Absolutely. And even I just, I mean I got to the point where just sourcing the products was where, where my skill set was and just project managing from afar, then making sure that the people had, knew who had to turn up after the others and there was someone there on site who was just passing along the words of what had to be done.

Another good thing for that. That's a great point. Sourcing the products. If long lead times, very advantageous to sourcing, sourcing products. Well and what you find is when you blow the budget on products, it's normally because you're running out of time or you've left things to the last minute and stuff like that. If you can start getting those, you know, those ovens and the stoves and so on on sale when the, you know, if it's a, depending on again what kind of demographic you're renovating to. But if you have to have brand items, for instance, often they have the clearance sales once a year where you can get those stoves and ovens and shiny objects and you get the brands in there with the. But for kind of half price or 60% of the cost or whatever.

Well, I know that I keep going back to spotlight and getting the, you know, the 60 mil golden oak blinds, thinking that they're always going to break. And I've got a whole, you know, attic full of them going. I've had these in properties for over 10 years. They just don't break. So, you know, it's interesting. Yep, interesting. So, yeah, good stuff. Thank you very much for your question, Jeremy. And we'll see if anyone else has a question that they'd like to have us cover. Now I see that Carolyn's got a question there about some of the changes. We'll just see if Carolyn's available to talk. Carolyn, have you got a microphone that we can turn on?

Give her a shot.

Hi Carolyn. I See her name appear twice. Maybe it's the second microphone.

Give that one a shot then. Not looking promising.

So one of the things that Carolyn asks about and we've had a couple of conversations within the Ultimate Guide to Renovation is the fact that laws can change, especially state based laws. And she says, you know, there are new laws in Queensland relating to the cost of renovation over a certain price that you actually need a builder or builder supervisor. So I know that we've had that people within in the Ultimate Guide of Renovation who've been project managing and assisting people with their projects and that has created some these changes where you actually have to get a building supervisor to supervise the work or a builder in is required. So from what I'm hearing in Queensland, having spoken to a couple of, of pest and building inspectors recently. Oh yeah, is that there's a, a lot of older tradies and builders with licenses who've retired and are off the tools, who now have an entire new job of turning up every morning with their Starbucks and, and having a look over the job and popping back in later in the afternoon. And yeah, I think there might be signing off. There might be a whole new. Yeah, not that I'm encouraging people to do it, but a whole new profession out there with the, the, the gray trade coming back.

Yeah, there is a lot of that going on. Yeah, it's often there's certain things, you know, like roofing or even decking and stuff like that that may require a building permit. And so you need a, A, you know, a roofer that's got a roofing license or, or you know, someone who's got a, a restricted building license or whatever that is. But yeah, and it's normally set to a. There's also normally a threshold of, you know, let's say $10,000 or $15,000 that after you go over that, then you're supposed to have a registered builder carry out the work or a project manager. But yeah, there's, yeah, there's workarounds and yeah, there is.

But I guess the thing is that especially if you're flipping a property, you have a responsibility to provide a property that has the warranty, insurance and all of those kind of, you know, safe property. You know, despite the whole buyer beware thing, you should be delivering a safe product to the market. But the other thing is what it does bring up, and I think it's Len rather than Carolyn, I can see, but what it does bring up is that it's important to note that every state is different and there's definitely different building warranty, insurance requirements for every state. There's different requirements for pretty much everything down to how you sign your mortgage documents depending on who can witness it based state by state. So there's some really important things that you need to note about the different state requirements. And I spoke to a lady just the other day who had done a fabulous buy, split the block DA sell off, made a lot of money in Victoria and went to Western Australia to do the same thing. And she's now finding that the DA and the subdivision costs not like 20 to $40,000, but more like $150,000. So just making the assumption that the costs were the same state by state has really ruined the profit margin of the deal that she was doing. So, you know, really, I guess, really interesting. But it does, I think, John, bring to mind the fact that for a majority of people out there, you know, be it renovating or be it buying property is the fact that they don't realize the profit because they, they don't recognise the risks that are associated with it by doing their research first or understanding how they should be purchasing or renovating.

Yep, yep, I would agree. Yeah, there's, there's. And it's probably the majority really that don't take that systematic approach and, and most of the time their sins are covered by the market going up, but, but not always the case.

But I mean, I think, no, you know, just talking about the market at the moment, we've, we know that Sydney left the market when we look at the clock of going from, I'm not going to say boom to bust, but going from a growth phase down to a slowdown phase back up to a growth phase. If you think about a clock in the clockwise direction. And I keep an eye on her and Todd White's monthly newsletters to just see where that clock is up to for different areas and even regional areas. But the thing that I've never been clever enough to try to anticipate or time the market and I find that a lot of people when purchasing do to do that and I've had a number of conversations with people in the last month have said, oh, it's probably time to get into Adelaide or Perth and you know, the fundamentals of the economy there are still not strong as they weren't a while ago. So there hasn't been any huge revelation other than the fact that in comparison to some of the other states, they now seem to be affordable.

Yep, yep. So people are predicting the other states are coming off, therefore.

Absolutely And I spoke to someone yesterday who said to, who said to me who lives in Sydney and said well I guess Melbourne should take off soon. I said, well you're probably about 18 months late. We're probably only six months behind Sydney and Sydney keeps going from peak to peak. So there's a still lot of legs that we're seeing in the Brisbane market. I know that just talking to people every day about where they're buying, you get to see where people are interested, a little bit of interest in Adelaide, but Perth has just started to come across our space of where people are looking. But the thing has is I don't try to time the market. But the reason that renovation has been such an integral strategy of mind is that you don't have to time the market because you're actually manufacturing your own equity. So that's why renovation is actually right for today's market, be it wherever you are in the fast moving Sydney, Melbourne taking off Brisbane, the coming of age of Hobart and Adelaide and Perth and then there's always Adelaide that just trickles along and does, does its own thing but has a good underlying long term growth. And you know, obviously Darwin's had a bit of a setback as well. But in any one of those markets you can make money with renovation as long as you're buying in the right location, the right property with the pricing disparity.

Yep.

You know, and I think you know.

Because it's no mystery, is it? I mean if, if the difference between what you buy it for and what you spend on the renovation adds value and puts it into a different price bracket that's higher up, that's the only trick to it really. And we have that method of starting backwards. So you start at the end value. What are you renovating up to? So if you can see houses in the street that are selling for 650,000 and you're not trying to set street records or anything like that, maybe the top end of the street's over 700,000, but about the 80% market's around 650 for a typically renovated property. Property. And then you work backwards from there and work out how much the renovation is going to cost you, how much profit you'd like and the other cost, you know, like the transaction costs and stamp duty and that kind of thing, then it's basically once you've subtracted those things, you've got your buy price and if the, you know, if the buy price is higher than that, it's a project you just have to walk away from if it's there or thereabouts, then potentially you're going to make your profit, but you can't add in that capital growth. And that's when you see, you know, people do a renovation, often they'll do it to their own taste and still get saved a little bit by the market market. But that'll only work for you so many times. And a developer and a, and a flipper, for instance, will never put in the capital growth because the renovation itself is a standalone equation. And even if you think about it in your Trident strategy, like you've got the three prongs, but the renovation is still a standalone entity within those three things. It has to add value on its own, otherwise you wouldn't bother.

Well, and that was an interesting thing that Matt Jones said in the podcast, is that he was able to actually doing the numbers and doing the deal and he had to kind of manufacture the numbers enough to almost justify the deal he really wanted to do. And then he realized what he was doing and another deal came along and so he let it go. But you can start making those mistakes.

It's really easy to cook the books. And the classic one is just thinking that you're, you look at the street, you look at the house up the road and it's, you know, and it's. We're talking about that 650 mark. Well, this one's selling for 950. And you think, well, I could get close to that. You know, I could. I'll do a really good renovation. I'll sell for 9, 950. Then you find out the one for 950 has actually got a pool. And, you know, it's three stories and an underground car park and all the rest of it. So it's nothing like a comparable sale.

That's what we saw when we went to Brisbane. Brisbane, wasn't it? We went. Was it Wavel Heights? We did the bus tour for, for the hot spotting workshop.

Yeah.

And we got out there with this agent, he's going, this property here you could buy for 600. And this one over there is just sold for 1.1. And this is what you can do. And then points across the road, like 3/4 bigger the block. It had this incredible deck, it had this beautiful pool, it had billiards rooms.

And it was nothing like apples. For apples.

Yeah, but. And I imagine, I wondered how often he'd been telling people and just across the road and, you know, so validate your information. But I guess that's the thing is that the Renovation really allows you to create the equity that you may not have. But the other thing about it is, you know, I'm speaking to people a lot at the moment who have run into that borrowing capacity ceiling and they've got, we've had a couple of properties and she's all over, we're out for the count, you know. And the fact of the matter is that there's still a lot of profit in people's properties that they haven't really looked at in their current portfolio. Yeah. So in their current portfolio they may have purchased for one strategy in particular and there wasn't the pricing differential between the renovated and unrenovated, but they may actually find that their sub over the last five, six, ten years has actually gentrified that they've purchased in. And there has been a move into the market maybe based on affordability first home buyers or people who are investing and developing, but they may actually now have that pricing disparity that wasn't there previously. So it's really worthwhile to go back. If you do have property and you've held it for a while and it's pretty much done its thing and you kind of forget about it because they just tick over, that's how they're supposed to happen. And then you go back and you have a look and start doing the analysis of the suburb as if you're going to buy there. And you know, I had a mentoring student come in last year and she had, oh my goodness, I think she had 18 properties and she was getting to an exit plan and she was saying, so which one should I sell? Which ones? And I was like, well, which one's the non performers, first of all? So let's just see. And how long have they been non performers? And we actually did analysis on every single one of those properties in every single one of those areas, areas to actually find out did they deserve to still be in her portfolio. Was there growth, was there pricing differential? Was there the opportunity for the ripple effect in the future? Was there future infrastructure plans for transport or for new Woolworths or, well, not masters anymore, but Bunnings, was there those kind of expansion or Audi. And I know even talking to the people from Map World, where we get our little dots from, we kind of put, well, they reached out to us down in Essendon in Victoria and said, who are you people? All of a sudden I've got all these people ringing up for maps, hemis, maps and dots. And they said the only people previously who had ever bought these dots was Audi. So they had actually bought red and green dots and they put down Woolworths and Coles and they wanted to know where everyone was in every capital city and then they planned where they were going to put Audi. So there you go, dot mapping. We thought that Medine Simmons had invented it. Turns out Audi was into it as well.

So Germans. Yes, they German Audi?

I think so. They have a lot of German products. Best meat.

Oh yeah.

Oh yeah. I've got to say I'm a sucker for Audi. I just like the, the trash in the middle. I can't get out. I can't get out. I bought a boxing bag there the other day. It's fabulous. I'm all over it.

Get everything at elder.

There you go. Jane endorses out Cloudy. Actually I did see, I took a photo of. What do they have there? They had a kitchen appliance, a dishwasher, really a cheap two year warranty, stainless steel dishwasher for less than 400. I thought, interesting. So there you go.

We got our wine fridge for the. Oh yeah, for the buffet bar thing and the development from Aldi, 300 bucks.

Don't tell the people who bought the properties. Okay, well I think Len has another query here. So Len, whose microphone's not working?

All right. Since the downturn of the mining industry in central Queensland, house prices have dropped. In 2012, a house valued at 600k looks like it's continuing over here is now a 380k. Is it worth buying a house in this area and sitting on it?

Well, I guess the real question here comes back to location and the importance of location in your purchase decision. And just because a property is cheap doesn't mean that you're going to make money from it. Now I know I had a chat to. Well, as you know, I was a mining engineer for many years and still hang out with a few mining engineers. And I had a chat last week hand to a friend who's a consultant to the mining industry and pretty much across what's happening and he was saying, you know, the coking coal price at the moment is actually, you know, so good that these guys are making 10 to 20 bucks a ton. Now when you're pulling out 4 to 5 million tonnes, you're making a bit of money. So a lot of those coal mines that weren't necessarily economic are economic again. But what has happened as we know, is that they've put a lot of people off or in some of those mining towns they've created their own accommodation and the dynamics of the economy Being a single industry economy, if that hasn't changed, like the areas like Emerald and Murrambah et cetera, and even to some degree Gladstone we've seen come back, particularly Newman and Port Hedland for instance, if the economics haven't changed that have created the problem there, then I would have a lot of worries in actually purchasing there without knowing that there was some proof in the pudding that there was going to be a change. We've definitely been through the biggest growth spurt with the LNG and coal, etc. And iron ore and those construction periods that we've been through. We're now into the production period and you know, there's still, there's still the underlying benefits of the mining industry in delivering and will continue to deliver to the economy, but just not to the, to the extent that we have seen in the past. And I don't think that's going to be replicated. Speaking to a lot of people who are now quite senior in quite a lot of the mining companies who are making these strategic, strategics decisions that.

So all your drinking buddies are now risen up the ladder.

I know who knew those people that you used to pull off the floor from the, the bottom of the marble bar in the Hilton, you know, now are running these companies. So I won't name any names but yeah, it would seem that there's money being made but not necessarily for those in the towns. And you know, I'm obviously not an expert on the economy of the mining industry and specifically to specific towns. But if I just put my low risk hat on, I would say understand why those prices have gone from you know, 600,000 down to 380. What has been the dynamic that's driven that? It might be that the mines have come in with their own accommodation. It might be that, you know, they've gone to a fly out, fly and fly out model. It might be that the mines have closed and they are not going to be, they've been mothballed and there's going to take a lot of confidence for that mine to get up and going again. So it's an absolute tragedy of what has happened to a lot of the towns. And I think the locals can look at it and go, geez, I can pick up something that sold last year, well the year before for $600,000 for 350 now. But the reality is it probably was always worth 350. So I hope that helps. But it does bring us back to I guess the fundamental question which is is there, is the location well the location is the real building block of how you're going to make your money, isn't it?

Yeah and it's probably never, you can never say it too much. Like if you were just to recap on the drivers of growth, what would you, if you'd list, you know, let's say five for instance.

Look, it's all about. To me the number one thing is population demand and the demand is there because of the economy and the economy is there because, because there's something of value that is being manufactured or created or serviced. So tourism for instance, from a service industry. And if that's not there then the population isn't there. And you know we look at some of the, you know, best rental yields zn in Tasmania, you know there's hundreds of people who live there. A lot of them, not all of them but a lot of them are on welfare. You can pick up a, well I think they're giving away houses at one stage but you can pick up a, you know, house for under $100,000 and you might be able to rent it out for $200 a week but they're vacant for so long.

Yeah, I think it's 80 something percent unemployment or something.

Yeah, maybe even higher. And it's like, I don't know, something saying I can even look it up some insane vacancy rate. So you know, when you kind of look at those things the numbers by themselves might seem valid but there's no, there's nothing for the population there to do. So you know, mining walls at one stage, you know, something that drove the area. So for me I would, I would always start with, you know, what the driver of the population is and that's the economy and jobs and then things like, you know, we saw the difference between the 2001, 2000 sorry 2006, 2011 census data where there was this huge population change and hence properties went up in value in Mount Barker in South Australia because of, of infrastructure. So what did they do? They put in great roadworks that allowed people to commute from their tree change.

Yeah, that was in the Bernard Salt, the Hyson tunnel.

So you know that, that to me is a really an indicator as well as when there's going to be some money spent on that infrastructure. I mean all of my properties are located next to universities and hospitals because I know those huge infrastructure bodies of employment cannot be moved easily, you know and you know there's a lot of people who've, you know, I guess and actually one Christmas I went looking for an iPad Christmas Eve, which was a really stupid time to go looking for an iPad.

Christmas shop on the same day.

Yeah. So funny. Well, I went looking and I, I kept seeing the same guy at this shop going, do you have an iPad? And he. And I kind of, kind of buddied up and he was in, he was quite high up in the Bendigo hospital and he was telling me about, whilst we're walking around the city looking on the iPad quest, he was telling about the infrastructure spend and what it's been doing for employment and, you know, which bears in mind also, you know, when we were talking earlier about people who are undervalued, we know quite a few people who talk to the local chemist news agent, you know, what's happening in the area when they go to a new area. So. And Residex rings these people up, Ripehouse chaser brings the people up and tries to get the inside information. John Edwards does it.

I've noticed it recently. I was, I had some parents that were off color and I've spent some time with them recently to take him to the chemist and getting their medicine and this kind of thing. And it's amazing how many people the chemist knows. The chemist knows absolutely everyone.

Yeah.

Knows everything about the town. So I kind of gotten onto that. I thought I'll be speaking to you next time I come into a, a new area.

Absolutely. So, yeah, I think, you know, from a point of view of speaking to the right people, we put, we put chemists on the list.

Yeah.

So, but I guess that brings us back to, you know, some of the, the other questions around location. So we've got the population demand, we've got the infrastructure. I always like to see that there has been some past demand as well. I don't want to be the blazing light that discovers the previously untapped area.

Yeah.

So, you know, it's kind of like the people that buy a property with the hope that zoning laws will change. I'm not that risky. I kind of want the proof that they've changed and I can then be first into that market.

So one of the interesting things Madine Simmons does, who's the inventor of the dot map method, is she keeps her maps and she compares this year's dot map to last year's dot map. And that's one of the really important steps in her dot map. It's not just comparing the neighboring suburbs to the next suburb. It's carrying the comparing that map to the previous map because she wants to see that pattern of sustained growth. She's not Looking for that wave riding suburb, that kind of a Hail Mary. She's looking for a suburb that's already got proven track record of growth but also predicted to have a spurt of growth in the nearby future. Which I think is a good way of thinking about it.

Absolutely. Well, just as an update for postcode 7469 in ZN vacancy rate. Have a guess. Go on guys in the chat box, have a guess. I'm going to give you a clue. It's over 10, it's over 10. Who's got a guess here? I'll give you a book. The person who gets it the closest.

46 says Stephen Kelvin says six to seven.

Oh my gosh, we've got so many people on this call. Come on guys, you can do it. Got a few more. 65%.

Wow.

Okay. Or 25, they're coming in 13, 30, 27. Okay Kelvin, you are the winner with 16. It is 15.8. 15.8, isn't that insane? So there you go. Just goes to show. So that basically means when we talk about the vacancy rate usually what we expect is that when it's 3% it means there's equilibrium. So as many people looking as there are those that are wanting to rent their properties out. So interesting statistics there. 15% means there's a lot of properties out there to be rented. And, and if I just quickly pull up the moment we've got, there's 10 up for rent right at the moment in Zan and I think the whole population is quite small in that little area of town. So it just goes to show the numbers and I keep seeing it in these lists and your investment property magazine and Australian Property Investor magazine they come up with the top rental yields and good old Zan keeps heading it up and I keep thinking, oh gosh, I hope people are doing their research as well. So here we go. There is 700 people who live in CN and 200 families. So we'd have to think about 200 houses and at the moment there's about 10 of those up for rent. So okay, let's go on now. John, I was asked an interesting question the other day.

Yep.

And that was how many properties properties do you need to retire on? Yep.

And you answer six and a half.

When did you get six and a half?

I don't know, just some random number.

No I didn't funnily enough. Well it comes back down to how you want to see your retirement, doesn't it? And it comes back down to how long before you retire and it really comes down to your own personal circumstances. So one of the things that I've done is created a calculator because a lot of the conversations I have in my mortgage discovery calls is around, well, let's just start at the end. Tell me what you want and we'll see if we can achieve it by working backwards and looking at your situation now. So the thing is, a lot of people, you know, we read books about the 135 properties or you know, people.

Always use the 10. I want 10 investment properties.

Yeah. Or I want to one a year for the next 10 years. And you have property is a vehicle to allow you to achieve your goals. But the important thing is you need to be very clear about your goals, what your goals are to start with. So look, I encourage you to get onto that property calculator on investorschoice.com and have a play around. But one of the other things, 80% of people who I speak to say that they want $100,000 passive income income. So they understand that it's passive income. It's not.

Is that per person or per couple?

That's per household. So $100,000 that they'd like and usually within 10 to 15 years. And then, you know, there's tabs in that calculator you can go back to and have a look as well where it actually says, well, let's see what you really need. And a lot of people don't really need that much to live off. So I think the reason that we do this and the reason that we talk about property investing and we talk about the twist strategies and the adding equ strategies of potentially renovating or subdividing or taking a property to a higher and better use is because we understand that property is the vehicle to get us somewhere and we want to get there sooner. So we don't want to wait for growth and ride that wave by itself. We want to stimulate it. And that's how renovation does it. And that's why I wrote the book Two properties, one renovation, a million dollars in the bank. Now, I base that on media, in incomes for females and males, a typical car loan, a typical property price, you know, accessing a little bit of equity from their home, buying their first investment property and not renovating it straight away, buying in a good capital growth area three years later, then pulling out of that capital growth to renovate that property, you know, and then sit on it again until the five year mark where they then have enough equity to purchase their second property. And that's it, they get on with their lives 10 years later. So we're talking 15 years in total. 10 years later they've got these two properties that have gone up in value. They sell them off, they pay off the 90% loan, they pay off the capital gains tax, they pay the selling costs. And I've allowed like 2.5% for agent selling costs. And they put a million dollars in the bank. Now at 5% per annum. A million bucks in a bank is a $50,000 passive income before tax. So that gives people the freedom of choosing whether they're going to go down to two days a week or you know, haven't be able to live off that amount of money so that they, you know, can start enjoying their lives or retiring a little bit sooner or getting on with the business they want to start.

It's accessible, isn't it? It's, it's realistic for people who might not be, you know, who have to actually struggle to get that initial deposit or get the equity in their own home. That's a really doable way to get up the property ladder. And you don't renovate straight away, as you said, you let the capital growth put some equity into the house and then you take that money and use it to renovate.

And the good thing about it, if you've only got a certain amount of money, so let's say you have $100,000 and you purchase a property and let's say you buy a $500,000 property with a 10% deposit, it's 50 grand closing costs, let's say 25. So it's $75,000 there that you've used up of the hundred thousand dollars you may have accessed from your home. You may leave that other 25 as a bit of a buffer or have the capacity to do a renovation but, and you know, a smaller cosmetic renovation. But the thing is, if you did delay the renovation, you could actually potentially go up to a, maybe a 530 price point or a 540 or a 550 price point and use up those funds. Now I need, I never suggest people use up all of those funds. I really, I think you should keep a minimum in there just to cover some cost in case you have to use those funds to cover in case of long term vacancies or major, you know, works that you need to have done because you never know, something always happens with water does, I don't know, something like that. Yeah. So you know, leave a little buffer in there. But you could then move maybe to A better quality area where the median price is not 500,000, but it's 550. So you, you know, actually you're not leaving the funds for the renovation straight away. And delaying the renovation is actually still a fabulous renovation strategy. And you're still buying the property with a renovation strategy in place, looking at the pricing disparity, looking at the growth, making sure you've got, you're in those streets where the renters want to live, you've got more than 30% renters there, you know, less vacancy. So, you know, from my point of view, great strategy.

Yep. Yeah, fantastic. And achievable.

Absolutely. So if you haven't had a chance to read the book, read the book. You only need two properties.

Yeah, that's right. We're talking about it last night with the guys from in Power wealth and they were saying, we're just discussing the different strategies and we're kind of putting forward why we, why we thought renovation was a great thing for people, particularly people starting out that you can, if you haven't got got if you're not, for instance, double income and both in, you know, you're earning whatever, 200, 180, 000 between you a year or something like that, you haven't got the same options, you know. So there's other ways that you need to harvest that equity. And renovation is such a great way to do it. I think it opens up property investment for a whole range of people that wouldn't have necessarily been able to do it at the same speed that they otherwise would of her too.

Absolutely. So we've got a question here again. So we've got my partner and I have a house in Serena in Queensland which has the old style tree trunk type stumps. Well, that is old style, isn't it? Is it worth re stumping in steel? At the moment it is approximately 2.1 meters high under the house. Is it worth re stumping digging it out and restamping with steel to achieve 2.4 under the house? I'm assuming that 2.4 is the minimum clearance for a second livable space. Is that the case? Might see if we can try that microphone again and see if they're available. Hello, can you hear us? Got a yes, that's written in the chat because we can't hear you, you so unmute yourself. Okay, so I don't know what the answer was. Yes, I imagine the 2.4 will get you. Now this is interesting. We were looking at that property in Wavell Heights and the gentleman There was talking about, you know, how a lot of people are worried about digging out to the minimum clearance and how it's possible. Well, I'm going to throw this one to you, John. Stumping.

Yeah. To be honest, he probably haven't got experience in Queensland. I haven't got of. I know there's a lot of moving of houses and stuff that goes on which I think is fantastic. We should pick up houses and move them around a bit more. But no, I, I don't know what's, what's standard there. So I don't, I don't really have the experience to comment on that one. But I, I assume they probably are doing stuff in steel but interesting that they were doing it on tree stumps.

And I guess the question bodes is, is there actually any problem with the old style, you know, stumps that you have at the moment if you did decide to. So first and foremost, if there's an issue with the stumps and you looking at, you're going to have to restump. To me, creating that higher and better use of potentially having the legal height underground or under the property and getting that extra 30cm would seem like a good opportunity to do at the time. If you have to do the work. If you don't have to do the work, like anything in renovation, you should be looking at, at the, I guess avoiding spending too much on something that could be done that may not make you a profit. So for instance, if you're just thinking about the fact that you could potentially get it to be legal height. Well, let's understand the benefits of being legal height. Legal height. You're going to be able to potentially create another usable space that could be rented separately.

Yep.

Or you can create more bedrooms or living space so that you have more typical property for the area area. I wouldn't be creating a five bedroom property where three bedroom is the typical property. And I guess the other thing is, you know, if it's going to cost you money, where could your money be spent better? Elsewhere elsewhere else. So, you know, if I was looking at that from a renovating for profit point of view, I would say what is the end value of the raising, raising that area and creating that extra space. Have a look at comparable sales of those area. Those properties that have already had that done to them. Understand the complexity of, you know, refitting out an entire, what may have been a garage area into a livable space and all those extra trades and expenses that might go along with it.

Yeah. And Rachel just said don't forget the costs of extending plumbing and electrics when raising as well as well as slab depth. And I imagine potentially there's some situations where that slab wouldn't be adequate for a livable area too because it would be, you know.

Well, you've probably just dug it out.

Yeah.

So you probably have to repo the whole slab, etc. So you know, it comes down to. It's a, it's an interesting question because it could be of asked of anything, you know, as in, you know, should I extend because I've got room out the back or you know, should I renovate the kitchen because it looks pretty dark daggy.

Yeah.

And, and I remember Craig from the beta test ultimate go to renovation. He was halfway through the course and he was in the process of pulling out a kitchen and he realized he only had to paint, paint it, pull it out and stopped and saved himself.

Yeah.

So much money.

Well, it's always the danger, isn't it? You look at it and you think I'll just rip that out and you end up gutting the whole thing. And even when we looked at that property in Queensland, automatically you looked at, you know, you raised that. If we raised it 300, you're almost doubling the floor space of the house. But the question is, yes, you could do that and there'd be a dramatic improvement to the house. But is it actually needed? Like as you said, are they two story houses in the area? Is that the typical property for the area?

And are you creating something that people don't really want? Yeah, because you can do it. So I'd go back and just say, you know, if you have to do work because there is a viable issue that you're associating with that the stumping at the time and you're going to have to deal with it, then potentially adding on a little bit more cost is not going to be such a big deal. But if you're doing it as how can I add value to this? Here's an opportunity here. And even if you've bought the property and you're looking at previous previously bought properties in your portfolio and you're, you're kind of looking for the opportunity, you still have to do, do the cost analysis of that pricing disparity because you can still over capitalize with properties you already have, so big problems, which you know, kind of takes us to another area of renovation where there's the common pitfalls that people starting out should be aware of. Yep. And it all comes back to in my mind starts with pricing disparity.

Yeah. Yeah. If it's a pretty simple equation, isn't it? If there's not that gap between the unrenovated and renovated properties, then there's no profit to be had. It just comes down to as simple as that. It just needs that gap between what you're buying it for and, and whatever the state that is and what you're going to be renovating up to. And again, we always talk about that 70 to 80% mark, so not the record breakers at the nines and tens or the 9, 90 and 100%, but that, that kind of 70, 80% where it's at the. The upper end of the street, but not so much that you're into the thin air of the. The ones that there's only a couple of sales a year kind of thing.

Absolutely. And I think that one of the other things is that you, you purchase a property and you might have that pricing disparity there. And, you know, you're congratulating yourself and then you just let the costs get out of. Out of play. You know, all of a sudden you, you're renovating to your own emotions. So, you know, I know I made a mistake with a purple feature Wall, you know, 14 years ago that, you know, I've repented over time. Yeah. So, you know, eight shades of. Eight painting jobs of.

I seem to remember you had some mosaic tiles and some particular capsule.

Fondo mosaic tiles. Exactly. I had a Shakespearean quote on a tile on the end of a bath. Like, you know, what was I thinking? Anyhow, first property, first renovation, you know, we didn't break the bank on it, but, you know, and there was a, you know, obviously I was adding some emotion into it and designing to my taste. So now everything's white or antique white or chalk white usa and allowing people to add the color themselves. And I noticed that with the, The, I guess, platform of the color scheme that you used. And you had a stylist come help with development with those, too.

Yeah, just neutral. And actually I said to the staging guy, I like speaking to the. Both in the interior designer and the staging people about these things all the time. And when the staging guy came in, who's really, really experienced guy, I said to him, would you have done any. Because I was worried that I'd left it a little bit too plain.

Yep.

And I said, would you have done anything else, add any other color? He said, not exactly. Exactly the way I wanted it because we can, we can dress it and we can have a really deliberate tonal palette throughout the place and it sets the whole mood of the, the property. And that that neutral palette or a neutral background kind of sets the stage for them to be able to do that. So.

Absolutely. So. And I guess some of the other pitfalls, people starting out is that they actually don't have a plan. You know, it's like, well, we know we have to fix the kitchen, we know we have to do the bathroom. Oh goodness, what are we going to do to the roof now? So they haven't anticipated all the costs upfront.

Yeah.

So they've, they haven't gone through and done in a complete cost analysis pre purchase of what the renovation is going to cost. And therefore because they've got that wrong, any additional cost just eats into the profit. Yeah.

And that can be a hard one because I mean often we get the question, you know, particularly if a property's going to the auction or going to auction that weekend or in a couple of weeks time or whatever, how do you go through and work out the costs of that renovation in that time and how much, how much time are you willing to spend on a property and then only to be, you know, outbid at auction kind of thing. So how do you, how do you approach that?

Well, I plan, I think about what my end value needs to happen be.

Yep.

And I consider, I guess what the costs are going to be and what the profit is. And you know, I, I'm always trying to make at least $2 for every dollar that I spend. And I'm a cosmetic renovator. You know, I know that you do structural renovations.

Yeah.

Hence why together we cover most questions. But you know, for me going to, I remember going to auction for, it was a little one bedroom unit overlooking the harbor in Bondi Junction. Bondi Junction in Sydney, Edgecliffe and great little apartment. You know, the bedroom had the view of the water. There was a hidden kitchen, there was a bit of a living area. And we could see very clearly that we could purchase that property and move the kitchen to the front. And it was all straight underneath us was the car park and all the plumbing was underneath. So we weren't going through walls or anything. We could move things around quite easily. We could create a second bedroom out of that kitchen and a bedroom in the second living space. So we actually created from a one bedroom to a two bedroom that was still livable. That, you know, was still, I think 80 square meters. So it's still quite a good space. The, the star of the property was the view. And rather than being locked away in a Bedroom, you could see it. And, and you know, we did all our numbers and we knew that if we were going to buy and renovate this property and we had planned to sell it, that we were, we would make a certain profit on it if we could purchase it at way back shows the age here, $405,000. And you know, someone went up to $407,000 and they got it. We had a hard and fast number, so we knew what profit we wanted.

To make and don't go over. Yeah.

So, you know, for us, it was very much along the lines of knowing the numbers and going up to that number and sticking to it. Because when you know your buying criteria and you're so, you know, aware of what you're looking for and 90% of what you can do is on the Internet, we know that, and we know from our resources what we can do with the, the Internet's resources and the software and things that are available today. You know, if the number doesn't work out, walk. Yeah, because the next deal is going to come along really quickly.

And they do come along, don't they? You do think some days that, oh, my God, I've missed another one, is this ever going to end? Kind of thing. But they do, they just, it's like waves. They keep on coming in.

It's interesting. I speak to people, you know, once they have pre approval, they've got three months really, before they have to hit the credit file again and do whole new pay slips and all of those painful things that we hate. So we try to give people as much assistance in that three months to purchase and often, you know, get down to the last few few weeks and I speak to someone and I do a bit of a deal review and they go, this is the buying criteria and this is what the deal is. And like, none of this matches. Tell me again why you're buying. And it's just kind of almost a frustration. It's like I'm. Like I'm at the end of my tether. I've had enough clocks running. And yeah, we're not talking about, you know, we're not buying candy here. We're buying hundreds of thousands of dollars worth of properties. And getting in and getting out is not like in New Zealand where there's no stamp duty and capital gains tax. Getting in and getting out, those transaction costs hurt. So once you're in, you're pretty much in. And if you're stuck with a lemon, you're stuck with a lemon. And not only does that lemon potentially not deliver. But that lemon does chews up your borrowing capacity. So you can't actually have another purchase or it may reduce what you can borrow for the next purchase. So, you know, settling not good enough.

Yeah, that's right. Actually, Jane, I'll just pick up on those that cost question there. One of the ways that you can, I mean, we've got a calculator that we've developed for working out costs of a renovation because obviously it's difficult to get quotes in for, you know, every single trade, depending on how much work needs to be done.

And if you do an inspection of a property, you can't really ask a tradie to turn up.

No, you might get a couple. I mean, I would do that if I was putting in an offer. The way we typically try and do it is put the offer in and then get the guys to come in and quote because then there's a realistic chance that they're going to get the job for one. So you're not wasting your time wasting their time, but the other way. And then it gets easier as you go along because you can, at the end of the job you can do an analysis of what you spent on things and often it's just as a matter of saying, okay, well, I spent this much on time tiles. How big an area was it that I did? Okay, so five meters of tiles and it cost X much divided by five. That's how much tiles cost me a square meter kind of thing. So you can start developing all of these rules of thumb for the next job. We've actually developed a calculator for ultimate guides renovation students to do that so they can plug in their quantities and do that. But the, the other point that I was going to make was with the auctions is as a rule we just aren't able to buy at auctions. So that just knocks those out for us all together because we just can't do the due diligence without putting it under offer. So basically it just knocks us out of the game as far as auctions go. So that's why building those relationships with the agents is so important to try and get those off market deals. And we've bought one prior to auction just by putting in a good, good offer and a couple of other ones where we put an offer, had it accepted and then got knocked out at a boardroom auction or something like that where a better offer has come in. But. So that's the only other way to try and tackle those auctions, in my opinion. But I think the More dangerous thing is to say, all right, I won't do my due diligence so I won't go to the trouble of getting all those quotes and so on, but I'll still turn up on the day and if it's at a certain number, I'll take it kind of thing and take the risk. Now I think you've into pretty risky ground there, particularly if there's some major work that kind of pops up that you didn't know about because you weren't willing to, you know, put the timer effort or you know, pay 2 or 300 bucks for a building inspection knowing that it was going to auction.

I want to give you one of my tips on creating for yourself maybe the off market opportunity.

Yep.

And for those of you who've seen the RP Data Professional software and, or have used it and have seen my tutorials on how to use it, one of the techniques that, and bear in mind RP Data Professional this information, this professional software is designed for real estate agents and mortgage brokers, but mainly real estate agents. So it's all around, you know, I saw a video come out on their channel yesterday about how to have your 12 month lease alert, you know, kind of thing. So we know it's about agents. So we've designed our own tutorials to teach you how to use it as a property investor. And you can see that in the club and on the website YourPropertySuccess.com but if you're a student of ours, but the thing is, I was speaking to a lady the other day who used the technique and that was if you've got a clear buying criteria like she did. Her parents were downsizing, they wanted to move down the coast. They knew that they wanted to have, you know, a three bedroom house. They wanted to have it on the typical landscape size, let's say 800 square meters. They wanted to be within a certain distance from the water and shops. So what you can do in RP data is create a territory. So there's a tutorial to teach you how to do that for those of you who have access to it. And essentially you go in, you say I want to create a territory and then you just draw the territory that you want and then you go in and it comes up and you say, I want three bedroom houses on 800 square meters and you've already got within the distance of, of the shops and the water. And then you say click on, give me, send me the alerts. So as soon as those properties come up for Sale, you're going to be alerted because RP Data obviously goes through and gets all the information from real estate agents.

Such a good feature.

So she did that. But I've also. And she found a property for her parents and in actual fact she used a little bit more of the techniques that I share in there, which is his second secret is that she went through and she went, I'm not going to wait for them to come on the market, I'm going to let her drop these people. So she went and let her drop and she said there was only about, there wasn't Many, less than 10. She let it drop and say if you're interested in selling, I'm interested in buying. Mum and dad want to move, da da da da. And she actually created that market. She got a phone call saying we were thinking about putting our property on the market next week. Didn't even get to a real estate agent and they purchased it. So they got the property. So you know, everything was done. Fabulous. So here's the second, there's a second secret, here's the third and I don't think I've shared this before.

Oh, okay.

This is, if you have time, this is what you can do. And let's assume you've come up with that you're buying a property in a certain suburb that has all the key characteristics. Maybe you've been in an had a look where the streets are that the renters want to live and we know that there's a high proportion of them who use public transport. So you've created your territory around this public transport hub within, near the streets that the renters want to live in. Not the owner occupiers, the renters. Because you've got a buy, renovate, hold strategy or just buy hold strategy. So you've created that territory. Now you then go through and you have a look at census and I'll tell you the typical properties. Three bedrooms and you know it's a house so you just select the three bedroom houses and up come the 10, 15, 20 properties. Now you can individually go into each one of those properties. If you go into those properties it gives you A the sale history but B it gives you also the last sale date and C it gives you the rental history so you can actually see which properties are rented and which properties are owned by owner occupiers. So those that have appeared to be rented in the past. Now if you find a property that's up for rent that is currently vacant, that has been owned by someone for a long period of time that potentially could be a motivated seller that you can go to and go, hmm, maybe you don't want to rent this property, maybe you want to sell it. You've had it for 20 years. It's been in the family, whatever, you.

Know, might not quite be up on what the current value is.

May not quite be up on the current value. Very happy. They bought it for $34,000 in 1976.

And now it's just a hassle because it's hasn't got a tenant. Yeah.

And now I think he retiring next month. So, you know guys, there's some amazing opportunities that you can use with some of these. And obviously these are paid software. Unfortunately we can't offer this to anyone other than our students, but luckily we have students, students here in this forum this evening. So if you haven't had a look at that, it's a monthly subscription, you can turn it on, turn it off as you need it. You don't have to take the annual subscriptions that some other groups suggests. So that's there as a technique, but it's a really, really clever tool to be able to get that off the market or create the off the market opportunity.

The reason I like those territories too is because I think that suburbs can be so different from one side of the suburb to another. And often I find myself when I'm looking at a demographic or an area that I'm bordering suburbs, like I'm a little bit of this suburb and a little bit of the next suburb because there's more. You could, you'd be better off putting a border around if, if suburbs were based on, you know, similar people, you'd, the borders would be different kind of thing. So I like the idea of being a suburb expert, but just in one particular area of a suburb and then it might be in a particular area of a neighboring suburb or a similar demographic in a nearby suburb kind of thing. So I think those using those territories and, and marking the streets that those houses come up when they're available is a really good way of doing it.

And remember my tip as well, for every property that you look at, you know, every 10 that you look at, look at one that a, has been renovated. So you can understand the, the, the end standard of the fixtures and fittings that you're looking at. But you're also, you know, getting a feel for who's looking to buy in the area, the demographic that's looking as well. And the other thing is I always add in one property that is up for rent at the moment. So because you get to walk around and hear what people saying, it doesn't have wardrobe or no security, doesn't have a car park too far from the train station, you get to hear those comments. But also you get to see if the real estate agent who's managing that property is actually someone that you want to manage for your property as well. So some really good tips there. But I guess if I do say so myself, there's some really great tips there. Jane, well done. Good job, good job, good job. But the other thing is, when you're looking at, you know, properties, often the question that I get is, where can you add the most value?

Yeah.

So, John, where can you add the most value?

Ah, the million dollar question. I mean, the easy answers are street.

Appeal, kitchens and bathrooms and a bit of painting.

Yeah. Oh, yeah. Painting's just the easiest bang for buck going around. But yeah, painting, painting, actually it is. It's actually street appeals probably because if you don't get them, you know, those, all those statistics about people make up their mind before they reach the front door and whatever that is, you know, people float an idea, 60% of people and all that kind of stuff, whatever that number is, it's significant.

And you've got 60 seconds.

Yeah, that's right. 60 seconds to get them. But painting and staging, hands down, best bang for buck because, you know, whatever staging's 5,000, you know, depending on how big it might be, 2,000. But paint the place, stick staging furniture in. I think that's the easiest bank of buckle to together. And then the other. Yeah, the other obviously kitchens, because, you know, she walks into the kitchen and that's a decided whether she's going to stay or not, you know, the kitchen's no good or she can't see the potential. See you later.

Well, that video too, in our upcoming video series as well, covers the renovation. But I actually show how to paint the benchtop in a kitchen.

Yeah.

So when we're talking painting these days, we're not necessarily talking the walls, are we?

No, absolutely not. And it's, it's so often it's things like. And you think, oh, well, surely people would be able to see through that, that it's just paint or whatever, but it's, it's just human nature. It's the same with the staging furniture that when something's presented well, it, it sells well and it's, it's just the truth. And you can walk into a property that's for sale and you know that it's higher furniture but it still looks good.

Absolutely. And I guess the, the key to that buyer renovation hold strategy that I've always had is I've always, always renovated for the valuer.

Yep.

So I've always kept in mind the tenant because obviously they're going to help me with the cash flow to hold that property for the period of time for me to then sell it off and make the money that I want to make. But you know, when I think of the valuer, it's the valuer who is walking through and they on average are there for seven to 10 minutes. They've done all their research, they know what other four bedroom houses in the area on 300 meter square blocks are worth and they just validating what they think is happening in that property and they walk through and you know, walking through an empty property, there's not a lot of emotional connection and I know a lot of valuers, they, they swear to God that it all comes down to the numbers. But I can tell you hand on heart, you walk into a furnished property, be it staged, et cetera and I've looked you know, for valuers and getting properties stake and you know that 3, $4,000 expense of getting that done for the valuer to walk in for those seven minutes well worth it when you're talking about the difference of a, you know, $70,000 in evaluation. So you know, staging is, is considered to be something for the flippers.

Yep.

And, and I, I was prepared to leave the furniture there for the renters too. I want people to imagine themselves, imagine themselves in the property and once you have those photos done, you can use them for years to come.

Yeah, absolutely.

So, but yeah, I think that you know, just looking at furniture property and what Rachel here saying, fantastic furniture, you can get a $2,000 package of all the items for a house and she reuses it for every house. Which is an interesting, a really interesting comment Rachel because I remember when I was first bought a little property in Darlington in 2002 and I was trying to come up with creative ways of actually renting the property out and creating more equity or more Y yield and I, we actually went down to fantastic furniture and I was amazed you could, you could as she said, furnish an entire house for $2,000.

Yeah, right.

And, and I was trying to leave the furniture there and rent it out furnished. Yep. And I even had, I went to the local gym and I had organized a discount for six months of free, you know, free gym membership. And I'd spoken to a couple of local pizza places and got a free pizza, you know, thrown in. So I had this kind of whole little package going on. And in the end, someone came in and said, no, not interested. I just want the place as it is. I'm like, oh, okay. So I had. And I didn't furnish it. I actually had on the flyer for the agent to give out. If you would like this property, you know, 400 bucks a week. For 450, it could be furnished.

Oh, yeah.

So I didn't actually go and make the commitment to purchase the property.

Yeah, it's great already.

There you go. So staging is something that can be considered for multiple people, which is good painting.

Staging floorboards are another great one. If you can. If your floorboards are in good nick and you lift the carpet up and. And stain them, that's another thing that just gives you instant, instant value lift or instant. What would you. Instant perceived value. So you walk in there and. And you've got. Particularly if they're stained and in depending the finish. You know, sometimes a lot of the renovations I used to do would be high gloss floorboards. Now we're in a little bit higher in the market, so. And the demographic wants mat. So that'll. That'll change depending what the demographic is. But yeah, stain floorboards look, look great. It's cheap to do. It's only, you know, often under a couple thousand bucks to do, you know, most of our home, including the hall.

Don't try to do it yourself. I've done that.

Yeah, yeah, yeah, I've done that too. Yeah, up on that one. It's so cheap, but it's not worth it.

And you can put some color into the stain on the floorboards.

Yeah, and there's ways around. There's a cheaper ways to do that too often people put it into the polyurethane, which is. Saves a staining coat. So the alternative to that is to. The painter would normally sand. Sorry, the four guy would sand. You normally apply the stain directly to the boards and then you put the polyurethane, whether it's matte or gloss, over the top of that. But the cheaper way to do it, and again, it's up to a certain price point you do this is you mix it in with the polyurethane and he just lays that on the first coat. And basically you get the stain for the price of the material because it's no extra work for him, basically. So a good, good tip there. But yeah, just really easy, easy money ripping up that carpet and polishing the boards. It lifts the house enormously because it's such a big area in the house when you think about the whole floor.

Absolutely. So yeah, I love floorboards and I love doing floorboards. I tell you something. Also, my sister was. She, she, she's a fabulous student. She follows my instructions to the T. I won't do it for her. She has to go and do all her own research and she's got a fabulous portfolio. But she did this research and she went and had to look at all the, you know, for every 10 properties that she was in looking for inspect, she'd go and look at one that had been renovated. She'd go and look at one that was for rental. And she was seeing the properties that were renting with a laundry in the bathroom or on the unit.

Yep.

We're renting for $50 more a week.

So the laundry in the laundry in.

The unit as opposed to a shared laundry.

Oh, I see. Yep.

An extra $50. So when she was doing her renovation, she sacrificed. And there's always a bit of contention here, the, the separate shower and bath.

Yeah.

And she actually, actually I can even show you photos. She sacrificed the shower and bath to have a shower over the bath.

Bath.

And she went through and let's see if I can find it here. She went through and put in the laundry and got that extra 50. $50 a week. Yeah.

So knowing that.

Yeah.

Because that would have been a pretty gutsy decision to make. But knowing the demographic the way she did.

Absolutely, absolutely. So, you know, and I mean she, she did some fabulous stuff with that as well in the sense that she also made a two bedroom unit into a three bedroom unit.

Oh yeah.

So she did a lot of clever things. Now I'm just gonna have to try to find these which is going to be a little bit difficult on the fly. So give me a moment.

Yep. Yeah, it's a hard call that sometimes, generally speaking, you would, you would favor or most people would favor favor, separate shower and separate bath. Again, comes down to the demographic. But you would, you would lay money that that was going to be the case most of the time. But so it's interesting that she went against the grain and, and did that and it paid off. So.

Absolutely. Very, very clever. Okay, I'm gonna have to be creative and see if I can actually find this now that I've, I've promised it. Goodness. Hang in there, people. Well, whilst I'm looking for this, I just.

So other. Other easy bang for buck items. Where are you doing that?

This is My multitasking other easy bang for buck.

For me, glass. Glass is a really easy. Not, not necessarily easy, but it's a relatively low cost way to add bang for bar. If you can get glass, for instance, a servery window over a kitchen or even better over a bath. Yeah, bath with a hob. I think stuff like that is a really easy way to add value to a property without breaking the bank. We've got a for instance and use this on a couple of occasions. A. So a hob is like a.

A.

Tile old box essentially that the bath sits inside of. And what you can do is you have a servery window which is like, it's like it sounds say you at a cafe and you, you, you see the servery where they pass the coffee over and it's got a sliding bit of glass which is frameless that slides up from the bottom over the top piece.

You're doing those hair movements. I am, yeah. No one can see.

I saw you doing it before too. And yeah, so that's a servy window. But you can use those over, over a, a bath or over a kitchen bench and stuff like that. And for instance, we've got a great big one over a bath we've used quite a few times. It was cost about fourteen hundred dollars to do. And yeah, the, the glass goes right down to the, the hob, the tiled hob around the bath and you can sit in the bath and lift up the window and you know, stick your head out into the courtyard and it's yeah, lovely way to, to take a bath but also adds a lot of value to the property without a lot of, without spending a lot of money.

Yeah, clever ideas. Well, I love plantation shutters.

Yep.

I think they're great. And I love skylights.

Light and bright skylights are another great one.

So I'm just going to show you this floor plan. So this is the floor plan of that property I was talking about. Because often if you can create a twist and I love this as an example of doing this. So here you see, you know, it's a two bedroom unit. You walk in the door here and got a kitchen to the right, the bathroom with the shower and the bath. Laundry's downstairs. Everyone shares it. Huge big living area here. Nice. You know, off to this great big balcony out the back. Bedroom one bedroom two. So there's obviously some opportunity there. Now here's the interesting thing. When the valuer came through, when the property was being purchased, so she put her name down or her clever mortgage broker put her name down as the contact person. So she had the value call her rather than the agent. So she got to walk through with the, the valuer. She said to the valuer, look, I see some opportunity here, maybe could I create a third bedroom so we could see here there's an opportunity here. Can you see that? Where I can even do a nice little highlighter. So here a third bedroom being created in this space. So you know, looks like a good idea. And the valuer said, we are on to you people. We know what you renovators are doing. You're putting up a $4,000 wall and you're saying that your property's worth a hundred thousand dollars more because it's not a two bedroom, it's a three bedroom property now. Interesting. So then we turned around and my mother and this is where the interior decorators, I came in, said, well, what if this already standard room became the third bedroom and we moved the kitchen out here. He said, you got me. That would definitely be a third. We would possibly, you know, miss that. Now bearing in mind they have got the previous sales and they know it was a two bedroom property, but by creating potentially this third bedroom in here and you know, if you wanted to be a slum lord, I'm just throwing this out there.

Make them all into bedrooms.

They could all be bedrooms. So this is like 200 meters from a university.

Right.

So you know, furnish each room, rent it out for $250 each. Now here's the really important thing that you need to be aware of. If you're thinking about doing something like this. You need to make sure that there is comparable sales in the area. Now in this instance there were three bedroom units. So you have to do that research. Don't try to create something that's not there or not in demand and not needed or not necessary. Now she was doing this from a yield point of view. So. So a higher rent, but also a higher equity place so that there could be equity that you could pull out to go and purchase. Now if that was the case, then having a third bedroom here, one, two, three bedrooms for the valuer and to get the equity out. Fabulous, right? And obviously, you know the strata rules and bylaws and things that you have to comply with, et cetera. But once the value leaves and you have your money and you put up this little wall, you actually have that fourth place bedroom and you have that extra rental potential. Now I'm not talking about becoming a slumlord and I'm not saying that this is great. And what you should do. But I'm just showing you how you might look at something like this with the potential of how you can potentially increase that yield plate. So this is what that bathroom looked. You probably recognize the pink and blue eastern suburbs Sydney bathrooms. You know, that wasn't really great. And this is what it been came, you know, a beautifully finished, you know, nice shower over the bath and a really nice finish here. And that was what the kitchen looked like beforehand. Bit of fun painting obviously before it got ripped out. And there it is as a bedroom. You know, so easy to retrofit as a bedroom. And because, you know, they could run the. The kitchen, plumbing, etc. Along the outside wall wasn't such a big deal. This was kind of like a little cavalry in here into the kitchen from the lounge rooms. This is this large living area and this became the kitchen. And to create a bit of extra space, she had that toughened mirror put in as a splashback. So that became the kitchen. Really nice. Now, I did argue with her over one point which was that she didn't need Caesar Stone here as the finishing because it really was over capitalizing for the area wasn't on the. The she decided that that's what she wanted and she had the extra $600 to allow for do that. It looks fabulous. It's nice wearing.

It's 20 mil, so it's not as expensive. Yeah.

And you know it. It's a. It's a nice functional kitchen and it's never been untenanted. And you know, it's a great little place.

Yeah. The mirrors do add. We've just used a. That's a tinted. A gray tinted mirror. We've just used the same thing in our developments. I do like them. I'm sure they're terrible to clean and all the rest of it, but. Yep, they do look cool.

They do look cool. So there you go. Some thoughts and ideas of what you could potentially do in creating a bit of a twist for your renovation as well. Completely unrehearsed and sorry. Patience for finding the things. So I guess guys, well, we're fast approaching. Gosh, two hours. There you go, John. We've kept their attention but I hope we've been able to add some value you to you regarding renovation with this renovation special. It's one of the things that we obviously believe here quite fundamentally as part of the Trident strategy as being a mainstream way of adding equity and creating that higher and better use, improving your yield, creating some equity to get you into the next property as well, so it's a really great, I guess, strategy that we, we like to talk about and we write about and we, we advocate.

So it's fun too.

It is, isn't it? It's so satisfying when you actually, you know, get that end result or even just the little milestones along the way when, you know, you've created, you know, the, the floorboards look fantastic and you know you've created something from nothing.

Yeah, yeah. It'd be hard for anyone to stand there at the end day of the, of the job, even if it has been hard work or if there's been some learning curves and not be proud of when it's finished. You know, seeing it all finished. It's a good feeling. That whole before and after process, I think.

Absolutely. Well, guys, just a reminder, those in the your property success club, those in the Ultimate Guide to Renovation, you have access to those private Facebook groups. So there's hundreds of people in there to help you with your questions. And John and I obviously jump in there quite regularly as well. And, and if you want us to answer something specifically, make sure you do an aina or an on. So we know that you're talking to us because sometimes we miss that. But you know, we love hanging out there and talking to like minded people. And they do say that you become like the five people you hang around with the most. And I have to say that it's been a wonderful experience seeing so many of you create connections with each other and you know, share some of your wins. And as you saw with our role, call hall, hall of fame, we're really here to be part of your success and to do what it takes to make things easier for you. One of the feedbacks that we got with Ultimate Guider renovation back in 2013 is that you sent us to 30 websites to fill in the spreadsheet. So we went in and every month we're filling in the spreadsheet for people and as of two weeks time, we.

Are about to launch the new brand new software version. Yeah, Fandangle.

It is Fandangled. I'm really excited. So, you know, I really think that, you know, we're always trying to improve things and based on your feedback. So you know, we really value you guys being here and you know, it's always exciting to see so many of you stay on and, and have, if you have questions, make sure you don't miss this number 1300 76, triple 19. So we can answer them for you. If you can't make the call, we.

Go there every day and check it, Jane. And there's just, you know, the disappointment I such a terrible way.

I'm gonna ring and leave a test message for you and. And see you see if that's true. But you know, guys, we really appreciate you being part of this call and thank you so much for. Well, it's been a quiet night tonight. I think everyone's been got a bit shy on us. We usually have lots of questions. So thank you. Well, to some degree, letting us off easily. But in the upcoming weeks, you'll see that we're opening up the ultimate guide to Ren innovation again. There's incredible video series that I really encourage you to watch if you haven't watched for those people who aren't in the course itself because we put a lot of effort in. I was even almost decapitated with a drone filming for episode one. So, yeah, watch for that. But yeah, we have a lot of fun in creating things for you and passing on what we know. So we would love you to pass on what you know too, and share with your successes with the Fire Facebook group, because we want to encourage you to be in our hall of fame because your success is our success. And here is to your property success. Good night.

See ya.