Renovating for profit can be stressful. A lot of things can and do go wrong. Lucy is one of our rising stars whose renovating journey started by accident. She renovated her own home, fell in love with renovating, and sold her home in order to start building up a property portfolio. Lucy said:
Renovating your own home is an awesome way to start because it’s safe and you can take your time with it.
Lucy’s Renovation Journey
Lucy is one of our Wonder Women rising stars. From the moment I met her I got the sense that she is destined for greatness in the renovation business. She is the kind of person who decides she wants something and then really goes for it. I invited her to chat with me on a live broadcast of She Renovates about how she started renovating for profit.
Lucy is a remedial therapist by profession and worked as one for nineteen years. She fell into the business of renovation by accident. Hers is a familiar story: she bought a family home, renovated it, fell in love with renovation and felt driven to see where it would take her.
The Mistakes People Make When They Renovate Their Own Home
Lucy says that doing renovation on your own home is a great place to start. There is no pressure to get everything perfect. You can make mistakes without knowing that it is going to make a dent in your profits. Lucy said:
I made pretty much all of the mistakes I was going to make in that home. Well, hopefully it’s all the mistakes it’s going to make.
When Lucy started renovating her own home, she approached the project with the mindset that she was going to be living there forever. She wanted to have the best of everything. She didn’t care about the costs and ended up overcapitalising on the property. It was not all money down the drain though. Lucy views the renovation of her own home as her apprenticeship in the business of renovating.
Why Lucy Developed A Love For Renovation
Renovation offers Lucy a creative outlet; a way to express herself. She finds it particularly satisfying to turn a dilapidated house into something amazing.
When looking for a new project, Lucy chooses houses that are set for demolition, especially if they have good bones. She saves them from going to the junk site and gives them a makeover to breathe new life into them. It’s all about sustainability and doing her part in preventing waste.
Lucy’s home was advertised as a demo home, but Lucy recognised the potential in the property. It had good bones. Lucy saved the house and turned it into something really beautiful.
It is a different story when you are renovating for a profit. You always have to keep your budget in mind in order to maximise your profit. Rather than it being an obstacle for Lucy, she sees it as an extension of the creative process. You have to find creative ways to solve any problems that arise.
The only thing that Lucy holds back on is aspects of the renovation that she finds appealing, but her market may not. For example, Lucy loves bright colours, but she knows that others may not enjoy a brightly coloured home as much as she does. She has to pull back on the reins a bit to make sure she doesn’t go overboard. I liken it to delivering champagne on a prosecco budget.
Lucy’s Biggest Hurdle With Renovation For Profit
Lucy’s biggest hurdle in getting into the business of renovation is one that many people can relate to. Finance. It can be a challenge to raise the funds required to purchase and renovate a property.
Lucy fell in love with renovation when she worked on her own home. She wanted to progress in the renovation game but had no means to be able to do that. The only way Lucy was able to raise the funds to start her next project was to sell her house. Luckily she has a supportive husband who agreed and Lucy’s renovation for profit journey began.
Lucy purchased two blocks in a micro development site in regional Victoria. The plan is to keep one of them, which they have renovated for Airbnb. They are going to subdivide the other block, build on the back property and sell the front one.
I believe that investing in micro development is a smart move. It takes away the risk of straight flipping. The additional land component acts as an insurance policy with the cost of the land being spread over two properties instead of one. It reduces the cost of your land. You end up with a new investment property that has very high equity in it.
Lucy gets an enormous amount of satisfaction from renovation. She absolutely loves breathing new life into a property. Transforming a demo house into something beautiful so that it can live up to its potential brings Lucy great joy.
Something Lucy loves doing is showing people like her Dad through the house before the renovation. The uglier the house the better. Seeing their amazement when she takes them back after the renovation is extremely rewarding. Lucy says that the most satisfying thing about renovating is comparing the house before the renovation and after it is complete.
Secure your Financial Future Through Renovation For Profit
The other great thing about renovating a property is the profit you make when you sell it. I asked Lucy if she feels that she is in control of her financial future? She doesn’t feel that she is there yet, but she is getting there.
She doesn’t have enough sales histories under her belt yet. She says she is good at the buying part but is lacking in the sales department. She only has two sales under her belt but wants to develop a good track record. She feels that having at least five sales go well will make her feel like she has control of her financial future.
When Lucy finished the renovation and sold her first property, her own home, they decided to free up their capital and rent before buying a new home. That made it possible for them to purchase two properties to work on and make a profit on. They crunched the numbers and found that doing it this way made the most sense.
Building Confidence With Joint Ventures
Lucy has put aside money to build in the back of her subdivided property. She didn’t want the cash to sit idle while they wait for the approval. She wanted it to work for her. So, she joined forces with another Wonder Woman. They are working together on an apartment in Hawthorn. If it goes well, they plan to use the profits from the sale to keep going. Lucy sees it as a side gig to her main projects.
The great thing about joint ventures is that it helps to build confidence in your renovation business skills. There is a little added accountability because you are not only managing your money, you are responsible for someone else’s as well. Your partner needs to be able to trust you as much as you need to trust your partner.
Solving Problems With A Renovation Business
Lucy has her sights set on a certain high school for her daughter that is heavily zoned and in an expensive area of Melbourne. They plan to purchase a property with renovation potential and renovate it to increase the value.
It just goes to show that renovation is something you can do to help solve problems in your life. Lucy has been able to build up sufficient wealth to have the life she wants in retirement. They will also have a principal place of residence when they get there.
I congratulate Lucy for believing in herself. She formulated her goal and went with it, knowing that she had to be flexible along the way.
We have a wonderful group of savvy renovators in our She Renovates Facebook group. Join the group to benefit from the ideas and support from people who are working hard to achieve their renovation for profit goals.