25 Oct Episode 42 of The Block Highlights Budget Concerns That Affect All Renovators
About the author
Jane Slack-Smith has been named one of the Top 10 Property Experts in Australia by Money Magazine, one of the Top 4 Financial Influencers by Qantas and been awarded the Australia’s Mortgage Broker of the Year twice.
Episode 42 of The Block saw contestants grabbing a chance to check out each other’s master bedroom designs. Naturally, there was a little sniping, especially over Norm and Jess’ choice of tiny furniture.
But that’s not the drama that we want to talk about. In the previous week, Jess volunteered to take on the treasurer’s role for the project.
She soon saw that she may have bitten off more than she can chew. Alarm bells started ringing when Jess looked at the number of tradespeople Hayden and Sara brought in for their work.
“There’s no way on green Earth they could be under budget,” Jess lamented during the episode.
However, she eventually found that they’d actually come in at $8,000 below budget. But drama may be on the horizon, as even Sara thinks that doesn’t sound right.
Overcapitalising is a common problem in property investing. Going overboard with a property may not work out well if its location limits its value.
Your aim is to follow this golden rule:
You need to make $2 for every $1 that you spend on the renovation.
Bringing in too many tradespeople can definitely lead to you blowing your budget. Hayden and Sara may be in danger of that, even if their early figures suggest that it came in under budget.
Maybe there are some extra charges coming that no-one’s accounted for.
The contestants on The Block have the show’s money to work with. But in your case, you need to check for pricing disparity in your suburb.
Do renovated properties sell for more than properties that haven’t undergone renovation in your area?
Can you make a profit once you take the cost of renovation and the time you need to hold the property into account?
They’re important questions to ask yourself before you get to work!
Stay tuned for more coverage and analysis of what’s going in The Block and don’t forget to check out my website www.yourpropertysuccess.com.au for more reno tips!