The School of Renovating

Mentoring and Inspiring Ambitious Renovators

Bernadette Janson

Secrets Of Property Millionaires Exposed – Pre-Launch Offer

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I was out Christmas shopping last year,  and I had a list of  some rather difficult people to buy for.  I was in this bookshop and I thought, why isn’t there a fabulous book that’s just been released that I could buy and give to my friend?

In that moment I made the decision that before the next Christmas I would have a book written and published. Well of course I have got this really bad habit of biting off more than I can chew. But that’s okay. I think you can say the universe took care of me. About two weeks later I got a message from my mentor,  Dale Beaumont.  He is Australia’s most prolific author. I remember him saying that he was publishing a book called The Secrets Of  Property Millionaires Exposed. And that he would like me to contribute a chapter. I thought “oh my gosh that’s awesome because it means that I’m able to to fulfill on my goal with a minimal amount of input”.
And the other thing is I just love those books. I love the concept of learning from other people who’ve been down the same path that you want to travel down. So I had a great time actually writing content and I’m really happy to say it is now on the market. The book is already published, but it’s not being officially released until February 2019. We have copies available to give out already.

Famous Property Experts That You Can Learn From

And so the great thing is that I’m in there. You can see me up there but there’s also some other great property experts. From all different.aspects of property. So this is a really great all rounder. So people like Ian Ugarte who is the king of affordable housing. We have Mark Rolton, who’s the king of options. And there is Chris Gray,  the king of negative gearing. We also have Helen Tarrant. Nathan Birch and my friend Sandra Sherrat, who’s an awesome real estate agent. My friend, Tyrone Hyde. Who makes quantity surveying sexy and Jo Vadillo, also a dear friend. She is an awesome property strategist and the owner of Property Women.

These famous people and yours truly, are a few of the people who are featured in this book. So I want to share that with you today and let you know that you can buy a copy of this with free postage because I’m going to pay you postage just by clicking the link below this video and I look forward to sharing some little gems with you.

 Get Your Copy Here

How To Make Faster Decisions When Choosing Renovation Materials

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This morning I was out choosing carpets for a project. And I realised after I left the store, that I’ve been in and out in about 20 minutes. I have made the decision and moved on.
I used to labour over decisions for quite a long time and when you are renovating for profit, you just can’t afford to spend that amount of time to make a decision. Because it just slows down the job too much, plus it makes life pretty difficult. So, I thought there will be value in defining the measures I’ve taken to speed up that decision making process.

Setting the parameters on furnishing and finishes

The first thing I want to mention to you is about making decisions on furnishing and  finishes. It’s the stuff that you see – and it’s important. Colours, floor coverings, tiles, furniture, light fitting and the works.
The first thing that you need to do is to set the parameters, and what I mean by that is to  determine your colour schemes and the look that you’re going for and put together a mood board to help you with that.

Now you can google and do that online on Pinterest and other sites. When you’re going to buy materials, you want to have it with you so you can refer back to it. Because, when you find a look that you’re working toward. You’re not going to have exactly the same things that are going to be in that picture. You’re going to reproduce that by using the best that you can find.

Using a colour consultant is a good idea

In setting the parameters, you need to be  clear on the colour scheme and style that you are going for. This will really help. Now I always say to people who are new to renovating that it’s a really good idea to use the colour consultant.
It will take a whole lot of grief out of the choices, and then you’ll have a colour palette done for you.  It’s fine to know what kind of colour you want to go for, but actually converting the picture in your mind into a code to be able to order paint is a totally different story.  This is where the colour consultant will come in quite handy and they’re very cost effective. Now that you have set your parameters. You will know exactly the look and the feel of what you’re going for is. Then the next thing to do is to go to the suppliers.

Limit the scope and aim for the requirements you need

The second tip I would say is to limit your scope. Only look at things that are in your budget and within the requirements of what you need. If you’re looking for tiles and you have to have small tiles, then don’t look at those lovely big 900mm wide tiles because it just confuses the mix.

Look at a range that you actually purchase within your budget. And if they work with what you want, you could choose them. That will cut down a whole lot of the grief because sometimes you see something that’s outside your budget, and unfortunately our mind works in strange ways and it operates that when it’s more expensive it must be better. So that just mixes up the whole scenario, and you don’t want that. So, stick to the parameters.

Not being a perfectionist is a good thing

Now the third point is, I think it’s the key thing that helped me to get clear about making decisions and being able to make decisions quite quickly is to give up trying to get it perfect. I have to say that I am a recovering perfectionist. In my early days I will spend a lot of time trying to get it absolutely perfect, and even then it was only perfect in my mind.  I’m sure everyone else who are looking at it, loved what I did.

If it was only me, if something I didn’t think was absolutely perfect, then it was only me that thought it wasn’t. By giving up being perfect, it leaves you free to make a decision, and that’s the most important part. Provided that whatever you’re looking at, whether it’s carpet, curtains or anything else are within the parameters of your colour palette and your budget and it works with what you’re trying to set out.

Then all there is to do is to just choose and move on. I know that it seems to be oversimplifying it but it really is that simple.
If you are spending days and days making a decision, then the most common cause of that is perfectionism. And I would strongly recommend that you give it up.

Three Ways I Am Using Airbnb™ In Our Renovation Projects

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Airbnb™ is a term that has become synonymous with short term rental. In this post, when I refer to Airbnb™ I mean short term rental generally.
For renovators, short term rental is an absolute cracker because it solves a lot of problems and I want to share with you the ways we are using it right now in our projects.

Having the holding costs paid while you plan your reno takes the pressure off.

So, the first project is a property in Redfern, Sydney.
We have had it on Airbnb™ to cover our holding costs.
In renovating, sometimes you are forced into making decisions about your renovation quickly, because you have the pressure of the holding costs bearing down on you.
The minute that you settle on the property, you start paying interest on the full project.

By putting the property on Airbnb™, it means you have time to think and get quotes and approvals and the flexibility to start renovating when you are ready.
You don’t have to to wait for the tenants to leave.
So we’ve had this Redfern property on Airbnb ™ all year.

The Airbnb™  Returns Are A Super Selling Tool.

Now we are about to start the cosmetic renovation in Redfern on the 20th of October.
The property earns about $4,500-$5,500/month in it’s unrenovated state. Once we get it renovated, it will go back onto the short term rental market just before Christmas which is a mad time for Airbnb™.

This time it will be newly renovated, the photos will be better and it will go on multiple platforms.
We will be working to push the income on that property up, probably around a $1,000 a week.
When it goes on the market in the new year it will be presented as a fully managed, high cash flow property.
So, as a selling tool having a return like that is a real advantage.

Building financial capacity by producing income with rented properties.

The next project we are using short term rental with is to build capacity for serviceability.
Renting properties and listing them on the short term rental market to produce an income pretty much out of nothing. This is another great strategy. Some of our community don’t have good serviceability or don’t have enough cash flow to get the type of loan they need for their projects.

By building up a portfolio of rented properties that can be listed on the short term market, is a great way to produce an income. We’ve rented a property recently, once again this is a terrace house, in Surry Hills. It’s taken us just over 8 weeks to break even. So, now we can start putting the pedal to the floor and really start building the income.

Short term rental is a long game. You will have income coming in immediately but it takes time to build the income up. We have discovered that a listing’s earning potential peaks at about 250 reviews on Airbnb™. But of course it’s not the only platform and some platforms attract higher booking fees.

We’re just about to get a SuperHost status on that property and once we do that, we’ll take it on to multiple platforms and really push up the earning capacity.

Renovating Apartments

The last way that we use Airbnb™ is to enable us to renovate apartments. Normally there is quite a lot of risk with renovating an apartment, because it takes time to get approval through the owner’s corporation. Of course you have to check that the owners corporation will allow you to Airbnb™ the property, some won’t. It’s part of your due diligence to check.
But if they do allow it, and it’s vacant, you can immediately furnish and get it onto Airbnb™, so you can have an income coming in straight away.

A word of warning

You must also check with your local council and owners corporation of your building before you list your property on the short term rental market.

As a side note, if you are in New South Wales, the laws are about to change.
In Sydney, it will be limited to 180 days per year for short term rental listings.
For a renovator, that’s plenty, it’s 6 months. Normally you can get your approval in that time.

The other thing to be mindful of is seeking permission.
If you are planning to rent properties to list on Airbnb™, you must get permission and a clause written into your lease to allow you to do that.

Please don’t do it illegally as it will come back to bite you.

Wrapping up

Okay, so just re capping, there are Three Ways I Am Using Airbnb™ In Our Renovation Projects.

Firstly, in order to cover the holding costs during the planning and approval stage. And this is particularly useful when we are looking for apartments.

Secondly, to use it as a selling tool. Because you’ve got extraordinary figures and if you’ve got it setup and managed on autopilot, that’s very attractive to an investor.

And the third thing is, to help build capacity for borrowing potential by generating income from properties that you don’t own.

I hope that’s been helpful and now you have better insight into the multiple uses for short term rental.

Airbnb™ is a term that has become synonymous with short term rental. And when I refer to Airbnb™  I mean short term rental generally.

Three Ways I Am Using Airbnb In Our Renovation Projects

 

2018 Australian Women In Renovating Survey & Competition

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This week, we launched the 2018 Australian Women In Renovating Survey.

Women make great renovators because renovating is a bit like home-making on steroids!

While traditional roles are shifting, women are still the primary home makers, organisers and nesters. Women tend to have an inherent sense of how a home should look and feel. But more importantly, how it should function to make life warm and beautiful.

Statistics tell us that women are the primary decision makers in buying a home.
It seems logical to assume, that a female renovator has an unfair advantage when it comes to creating a home that her tenant or buyer will swoon over.  She is connected with her sister at a primitive and deeply cellular level.

We take great pleasure in supporting and evolving women in creating an income and a life they love from renovating. The purpose of the survey is to provide vital information in helping us to serve more intelligently.

 

Please share the 2018 Australian Women In Renovating  Survey with the women in your life.

We are running a competition with the survey with 2 prizes of $500 to be spent on homewares (actually they will be paid in cash so can be spent on anything you like!!)

 

 

TAKE SURVEY NOW

 

See Terms and Conditions

 

 

 

6 Tips On How To Make An Offer On A Property And Improve Your Chance Of Success

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Tips on how to make an offer on a property and improve your chance of success
We’ve been trying to buy a project in Queensland.
In the past three weeks, we put in three offers and we’ve missed out on every one.
It’s pushed me to go back to first principles and make sure, that the way the offer is being submitted is placing us in the best position possible to get the property.

1. The Buyer With The Most Information Wins

Gather as much information as you can in the buying period.
I learned this from Melanie MacDonald who wrote the book called “The Capitalist Hippy ” She says,

“ the buyer with the most information wins.” Melanie MacDonald

It’s SO true.
Before you even think about making an offer you want to know as much as you can.
Learn about the sales history of that property, the vendor and the competition.
How long its been on the market?
Has it had any offers?
Why has it not sold? etc…
You need to know what every comparable property in the area has sold for. You need to go in there with your eyes wide open.
And you DO need a paid data service to give you information on sale prices of comparable properties.

2. Make Friends With The Selling Agent

The second of my tips on how to make an offer on a property.
Build a rapport with the agent. It will place you in a better position to actually get the property. You’ll find that he or she will share little snippets of information.  That can help you in terms of getting an edge in the negotiation.
People want to sell to people they like. Work on that relationship, with contact, coffees and compliments. Then hopefully you place yourself in the box seat for being the one the agent wants to sell to.
This is how I have been successful for quite a lot of property purchases.
With our current purchase it’s quite difficult because we’re working at a distance.

If you’re local and you can meet face to face, it places you in a much stronger position.

Tips on how to make an offer on a property

 

3. Make Sure Your Competition Is Real

If an agent tells you that they’ve had offers on a property, ask one simple question. “ Were those offers in writing? “
If they’re not in writing they’re not real offers.
Talk is cheap and there’s a big difference between a written and a verbal offer. Then existence of other offers can have you feel pressured to go higher than you’re planning.  Make sure you are competing with real offers.

Which brings me to the next point,

4. Make Sure You Put Your Offers In Writing

You can make an offer, either by having a letter of offer or having a signed contract. Make sure you work with your legal representative and make sure you have completed your due diligence and are covered legally and financially before you put any offer in.

We often submit offers with a signed contract, and a cheque for a deposit.
It’s saying you mean business and it can put you in a position of strength even when the offer is not the highest.

5. Don’t Make The Vendor Jump Through Hoops

Now this means,  limiting the conditions you’re putting into the property to what’s absolutely necessary.
The more conditions you’ve put into the contract the harder it’s going to be for the vendor to actually say yes to your offer.

This doesn’t mean exposing yourself to risk .Try to cover off some of your concerns before you put in your offer.
For example, get that due diligence done before you put your offer in.  Then you can make a much stronger offer.

One condition, every contract should include, particularly in light of the recent Royal Commission is a subject to finance clause. Getting finance has become challenging for many buyers so you need to be cautious.

6. My Final Tip On How To Make An Offer On A Property? Treat Buying Like A Numbers Game

Don’t get too emotionally attached to the property. I know sometimes that’s hard. But as you get more experienced it will become easier. And so basically you put your offer in, if it doesn’t get accepted and someone else’s does, then just move on.

Don’t go above what you know to be the right price for the property. That’s what will bring you undone.

“Opportunities are like buses – there’s always another one coming!” Richard Branson

 

Okay so they’re my tips on how to make an offer on a property for today. Have you got any really smart tips about how to get the edge in terms of putting an offering on a property. If you have, I’d love you to join in the comments below .

How To Tap Into The Equity In Your Home To Build Wealth

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How to tap equity in your home to build wealth.

 

Many property gurus claim that “The family home is not an asset, its a liability”.
In some cases this is true but it doesn’t need to be this way.
For most, their home represents the bulk of their wealth. And to not make the most of it, is to squander the opportunity for a sound financial future. Most homeowners pour their disposable income into improvements as their needs change but their renovation decisions tend to be coloured by emotion and lack strategy.  
The harsh reality is that not all renovations add value. Many keep them chained to a mortgage without ever getting ahead enough to start building wealth for the future.
Many Australians make a promise to themselves that they will fund their own retirement.  
Getting started is often the hardest step.  All they need to get started is a deposit and costs on the purchase of their first investment.
For most, that can be sourced from equity in the family home.
According to the 2016 census around 70% Australians own a home, so have the launchpad for their property portfolio.
Yet, less than 20% own an investment property.
You can have the home of your dreams AND leverage it to build wealth but you need be seriously committed to your financial goals and be willing to take action.
As I said, many Australians set out to fund their own retirement, most disappointed in their results (or lack of)
They do a lot of worrying, some talking but not much DOING.
I’m going to share with you some of my top tips for building and tapping into equity in your home to build wealth.

 

Start with a plan.

“A goal without a plan is just a wish.”

The plan shouldn’t be set in stone. But a tool to maintain your focus on the results you want.
To motivate you to take the right actions.
You will find your plan changes as you build your skills and networks and new opportunities arise.
Bend and flex as your skills and sophistication as an investor develop. 
Take a two pronged approach .
Plan your path to build value in your  home to meet your lifestyle needs as well as build equity that you can tap into.
Plan to start sewing those seeds to your property portfolio as soon as you can refinance. And safely extract enough equity in your home to purchase your first investment property.

 

Don’t let emotion sabotage your renovation decisions.

Take a pragmatic approach to adding value to your family home. Make sure everything you do adds double what it costs.
For example, installing a swimming pool probably won’t add any value. But you may find yourself justifying the decision with the the belief that it will. You won’t have to go far to find a pool company that will back you up and encourage you to spend on lavish landscaping that will leave you with the mother of all mortgages.
Make no mistake, a swimming pool is a lifestyle decision. There is nothing wrong with that if it is important to you.
Just be aware, it’s like taking a holiday. It adds significantly to your quality of life but not to your bottom line.
Actually the quality of life bit is just until the kids leave home. Then you’re the bunny spending your weekends cleaning it!!
Other renovations that can tempt you to go overboard on are new kitchens, hardwood timber floors, doors and windows. Others are extensions, expensive landscaping, technology systems, appliances etc, etc…
Before you start glazing over, it doesn’t mean you can’t renovate, but be smart about it. Get educated and research what will add value. Then execute your renovation in a cost effective way.

Look for hidden cash flow.

When you get to the point of refinancing your home to start building a portfolio, you will need both equity and cash flow. Often the cash flow trips people up, they will have oodles of equity but don’t earn enough to get the loan they want. Finding hidden cash flow in the family home is like hitting the jackpot.
Whether it is a room your can rent on the short term market, space for a granny flat or the capacity to rent storage . Some people run a business from home and save the cost of renting a premises. Others rent their homes out as film sets. I once had a business partner who was always looking for terraces with a side wall to rent out for advertising.
The possibilities are only limited to your imagination.  
There is a saying that “Charity begins at home.”
Well “Financial freedom begins at home” too.
The cheapest investment is the one you find in your own backyard.
Many people are making the most of the airbnb windfall by renting out a room or a granny flat.  Before you go down this path, check with your council and get advice from your accountant as it can impact the capital gains tax exemption of your family home. Try to make the airbnb room independent of the rest of the house.  If you can give your guest access to a bedroom and ensuite with a private entrance, you will earn more. Your guests will love you for it and it will have minimal impact on your family life.

 

Tap Into the Equity to Build that Portfolio.

Okay, so you have jacked up the value of your family home and you have extracted the hidden cash flow.  Next step is to start planting the seeds for your portfolio. You need to make sure that you structure the finance in such a way that you don’t expose your family home to unnecessary risk. Build a virtual moat around your family home to quarantine it from anything unfortunate that might happen with the investment properties.  Like it or not, investing is like business. The last thing you want to do is to expose your family home to any investment risk.
There are two ways to do this.
Firstly, work with your accountant to use a legal structure to put a wall between your investments and your family home. 
Avoid cross collateralising the loans. Work with your broker to ensure that the loan for the investment property is sourced from a separate institutions to your mortgage.

 

Wrapping up

The family home can be either a liability or an asset depending on your mindset. If you want it to be an asset so you can harness the available equity there are a few things to keep in mind.
Firstly, create your master plan for improving the property to needs, but to build solid equity, then tap into that equity to build your portfolio and long term wealth
Keep your emotions in check when making renovations, learn to produce champagne on a beer budget so that you not only have the house of your dreams but you also get leverage to build long term wealth.
Look for the hidden cash flow in the property to help scale up your borrowing capacity.
Then when you get to tap into the equity in your home, make sure you build a virtual moat to protect your family home using legal structure and avoiding cross collateralisation.
If you put a plan in place and  take action you will join an elite group of investors who have leveraged the equity that they have built in their family home to secure a bright financial future.
Case study:  Lucy came into our bootcamp with plans to extend her family home in Blackburn.  She wanted to add a bedroom, a bigger laundry and an outdoor entertainment area.
The home had an under utilised dining room and had the capacity to achieve the outcome she wanted without the extension. With a little reorganising Lucy was able to get the improvements her growing family needed on a fraction of the budget.
She went ahead with the hardwood deck the new plan now allows for a double carport rather than a single which is also a valuable addition in an area where most families have 2 cars. So, the change in tactics not only saved her $80,000 but it also added significantly more value.
Lucy’s renovation made a separate bedroom and bathroom with independent access  available to list on Airbnb. When you have children, you need to be mindful of the impact of your decisions on their well being. Lucy is able to set up her Airbnb suite so it is well removed from her family.

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