Reno Kings - 15 Pieces of Property Trivia
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15 Pieces of Property Trivia

Inspired by the 15 case studies we’ll be visiting on our October “On the Buses” mobile property workshop; here are 15 pieces of property trivia to get you thinking about your next purchase or perhaps revisiting an old property:

1. Freehold dwellings are worth more than those on a body corporate. It isn’t just the savings that can be made from body corporate fees that makes them more highly valued, but the freedom that comes with it. If you are freehold you can have pets without permission, and you can paint your front door any colour you wish!

2. To maximise value you need to maximise appeal to a broader market. Sure, you can do things to your taste, or do things ‘just that little bit different’, but make sure that in doing so you aren’t reducing your target market. In most cases it is better to do what 95% of other developers are doing to appeal to 95% of the market, than to do what 5% are doing and only appeal to 5% of the market.

3. The design of your product and the finishes you select need to reflect the end user. If building to rent, then design to rent, landscape to rent and furnish to rent.

4. Many people don’t try to have more than just a basic understanding of the development rules, relying instead on their town planner to ensure it ticks the boxes, but how can you assess what a property is worth if you don’t know what can fit on it? You can’t rely on your town planner each and every single time you come across a listing. For a start they’ll get sick of you very quickly, and secondly the delays in having them check things out will mean you will miss out on the good buys. To maximise your success and your profits, you need to do the hard yards and learn the rules for your chosen product.

5. Get out from behind your desk or smart phone and inspect some property! People seem to have forgotten how valuable a site inspection is, even if the property turns out to be a dud. Read Reno King, Justin Eslick’s article “The desktop Inspection” featuring in the September Australian Property Investor Newsletter.

6. Sometimes things don’t go as planned. We allow for this in three ways. The first is by having an ‘A-Team’ around us... these are your consultants and advisors, in other words the people who should for the most part avoid the hurdles but who can also guide you if you do hit a speed bump. The second is by aiming for an appropriate profit margin for the project. The truth is, we aim for 20% to make 15%. The third is by having appropriate contingencies in our numbers, but be aware, you can also allow too many and walk away from a good deal as a result.

7. Recognise the various selling techniques (i.e. auction, private sale, tender, etc) and their appropriateness for the product. Some product simply should not be sold at auction and others could achieve record prices by doing so. You might be in a position to buy well if you know this, or conversely pay too much or continually miss out by not understanding this.

8. Having a team behind you that are up to speed with new rules and new ‘directives’ within council can allow you to massage your numbers and timeframes. You may know the rules pretty well, but unless you are immersed in property every day it is difficult to know when things change.

9. We like to make profit where others can’t see it. We also like solving problems to turn difficult sites into profitable ones (after all, there is usually less competition for the difficult sites and more chance of buying well as a result). We find the properties that ticks every positive box imaginable are very difficult to find and even harder to get at the right price. That said, if you manage to snuggle one then happy days!

10. A selling agent is a wealth of information, sometimes in regards to value, other times in gaining an understanding of the seller’s mindset, and in some cases they don’t even need to be accurate! We’ve bought development sites off agents that think they are only selling renovators, and once we bought an approved site off an agent who thought they only had rough sketches drawn up! Make the most of your time spent with a selling agent by asking plenty of questions.

11. Remember the three R’s. Revisit, review and reveal. You should revisit (inspect and analyse) all of your portfolio at least every 12 months and review what you discover. Is there potential for more rent? Does it need renovating? Has the zoning changed? As a consequence you might reveal some added value!

12. One problem with consultants (and in particular council), is they are very good at telling you what you can’t do, rather than telling you what you can do. If you receive a ‘no’, ask why, then find a solution. For Geoff it resulted in 3 new townhouses!

13. When you are starting out for the first time, or are buying in a new location, our biggest tip is to not buy for a minimum 3 months, possibly 6 months. The thinking behind this being that how are you to know what a bargain looks like if you have only just started looking? Immerse yourself in the market and attend every auction and every open home. Also, you’ll do better to focus on just one or two suburbs and do those well, than to focus on too many and do them poorly. You want to get yourself into a position where you can immediately recognise a bargain when it comes across your desk.

14. Joint Ventures, if it contains the right mix of people, can be extremely fruitful. Everyone in a JV should have a strength that compliments the others in the group. Perhaps one may have the financial position, and another the time to devote to it.

15. RDC – the ‘Reno Development Combo’ is a great way to make money! Generally it is cheaper to renovate than to replace and the combo can turn good numbers into terrific numbers. If you are knocking down, for the most part you don’t want to knock down one to build one – that rarely works. Knock down one to build two, or three, or four...

Our “On the Buses” mobile property workshop is the last remaining opportunity in 2016 to invest in a day with the Reno Kings and learn how to turbo charge your property portfolio.

Get on board and personally experience the most significant lessons we have learnt from researching, buying, renovating, developing and renting property.

Click here to book your seat and grab our Early Bird Bonus!

 

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