Hotspace Blog

Slash Costs, Reduce Risk and Still make a Profit from your Renovation

Tue, 20 Mar 2012 03:44:00 GMT

Did the title grab you? Slash Costs, Reduce Risk and Still make a Profit from your Renovation? You bet! This is the title of my new eBook - COMING SOON (April hopefully). Here's a Sneak Peek...

Welcome to the world of Renovating for a Profit.

If you’re interested in renovating your property to add value and increase equity, then what you’re about to learn is essential for your success.

Renovating for a profit has become a common way for everyday people to propel themselves ahead financially.

But it’s not always success all-round.

Have you ever wondered why so many people over-spend and don’t make the profit they want from their renovations?

Are you afraid of making mistakes and losing money when renovating your own property?

There are so many things that you must know how to do if you want to successfully renovate for a profit.

So buckle up for the ride, because I’m about to share with you the top 4 ways you can slash your costs, reduce your risks and still make a profit from your renovation!

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If you want to find out the 4 critical ingredients for a successful renovation, make sure you receive a copy of this new eBook by subscribing to our newsletter here.

5 Steps to Reducing Your Debt and Replacing it With Wealth

Fri, 10 Feb 2012 04:48:00 GMT

Thanks to David Wright from Simply Budgets for providing the following '5 Steps to Reducing your Debt' information. For a copy of his '7 Powerful Secrets to Unlock the Wealth in your Life' eBook, link here to his website (there's a pop up window where you can fill in your details to have one emailed to you).

Dreaming about getting into the property game - or expanding your current portfolio of investments is an exciting thought. We can easily be swept away with sprookers and seminar speakers talking of their wealthy lifestyle and finding ourselves scrambling to work out how to 'have what they have' one way or another.

A common theme I see is exactly this - people who just want to get ahead and start/continue investing in property - but are just too afraid to do it when it comes to the crunch.

Why? I don't think it's a lack of education - these people know what they need to do. I don't think it's necessarily a lack of funds either - there is money out there if you look (JV's etc.).

What I think the biggest stumbling block is - is the thought "How can I possibly make tens/hundreds of thousands of dollars on a property deal when I can't even manage my day to day finances?" I know this will strike a chord with a lot of you - and isn't it great to identify one of the barriers that's stopping you move forward and creating great wealth.

David Wright from Simply Budgets has put together a few reports which give you some real, proven, 'start today' strategies for getting yourself out of debt and get you started at successfully managing your finances every day, every week and every month of the year.

There's a condensed version of Davids report below - 'The 5 Essential Steps to Drastically Reduce Your Debt and Replace it With Wealth'. However, if you want the complete eBook, download your copy at the end of this article.

STEP 1
Establish your current position…
You need to make a list of your assets and liabilities. In doing this you will identify exactly where you are up to right now so you know how serious the problem really is. There are a number of ways you can do this. You could make a spreadsheet on your computer or you could simply write it down in a chart. It is not important how you do it but it is extremely important that you do it!
Assets - Write the value of all your assets and total them so you know the value of what you own.
Liabilities - Write the amount you owe for each of your debts. Use the Interest Rate% column to record the interest rate for each of your debts. Only list your debts (for example, house loan, car loan, credit cards, etc)

Your Net Worth - Transfer your totals for Assets and Liabilities from above to the spaces below and calculate your Net Worth by subtracting Liabilities from Assets. Hopefully you will not get a negative number but if you do at least it is good to know exactly what the score is.

STEP 2
One Step Backwards – Two Steps Forward.
Now you know your net worth. It is time to look at one simple strategy that may not look like a positive step. But I will show you the power this step can bring to your money management.
Cash up Your Non-Essential Possessions - Make list of the purchases that have contributed to your debt problem. It is almost certain that the ‘things’ you purchased are now worth a lot less than you paid for them. If you are suffering from debt stress it may well be time to cut your losses in order to expedite your recovery. Ask yourself how much ‘stuff’ you have got that you could do without if you had to. What do you really need? You may not like the thought of selling stuff at all let alone for less than you paid for it but if you are to get out of debt then this is an essential part of what you need to do. Give it some serious thought!
Cash Down Your Highest Interest Rate Debts - Selling 'stuff' for less than you paid for it may seem like an unacceptable option but you may be very surprised to find it could save you a lot of money. If you sell a $1,000 item for $500 and pay this off a high interest credit card you could be much better off than it first appears when you consider the interest you could save. When you think about it like that, selling a $1,000 item for half price ($500) in a garage sale and paying the money off the credit card, you actually make money on the deal! You get back $1,337 from selling an item that cost you $1,000. That’s a $337 bonus! Now can you see why selling ‘stuff is a good idea?
From what you have read above, it is clear that you should be selling whatever you can possibly do without. It will reduce your pain considerably!

STEP 3
Create a Recovery Plan
You may have heard people talk about how important it is to set goals and then focus on achieving them. Without officially calling it ‘Goal Setting’ this next step is all about making plans and then seeing them through!
‘Snowball’ the repayment of your debts - Repayment Snowballing is a strategy you will now use to dramatically speed up the process of paying off your debts. A snowball starts off the size of a golf-ball as it rolls down a snowy slope. From these humble beginnings it gathers more speed, snow, momentum and power as it rolls.

STEP 4
Credit Safeguards
Prior to the introduction of credit cards last century, nobody died because they did not have one. You can live without credit too. You are now going to use Electronic Funds Transfers or real money to make your purchases and pay your bills on time every time. Below are a number of basic ‘credit safeguards’. You should use all that are appropriate for your situation.

Use Cash
Use a Debit Card
Disengage your Credit Cards
Freeze your Credit Cards
Don’t Pay ‘Over Limit’ Fees
Close Store Accounts
Rid yourself of ‘Easy Access’ Money.

Once you have carried out all of the suggestions from above that are relevant to you, stop and consider if there is still a way you could sabotage yourself by spending money you do not have. Do whatever it takes to remove every possible way you could spend money you do not have.

STEP 5
Emotions and Debt.

Read the full version of David's eBook here.

Colours for your Renovation

Wed, 08 Feb 2012 19:54:00 GMT

I often get asked ‘how much will you charge to do my colours’. My answer? Nothing – because I won’t do it. There are so many other factors to consider and I for one find it impossible to ignore the things that I know NEED to change in order for a real transformation to be made possible. Colour is a very important factor, but it is only around 30% of what it takes to modernise and add value to any property.

Let’s have a look at the different elements on the exterior of a house. You can paint some of these things – but what do you do with the rest?

Main exterior surfaces (brick, weatherboards fibro etc.)
Roof
Guttering
Gable
Bargeboards
Fascias
Soffits
Downpipes
Window frames
Sills
Window hardware
Awnings
Doors and door frames
Door hardware
Stair treads
Risers
Stringers
Balcony balustrade
handrail
Posts, beams etc
Garage door/carport
Metreboxes
Lighting
Landscaping
Driveway
Paths
Fences
Letterbox
Washing line

Oh and you’ve only got $35,000 to spend? How on earth are you going to transform your WHOLE house for that? (Hint: link to Renovation Action Plan page HERE).

Favourite Apps for Property and Renovations

Tue, 17 Jan 2012 05:34:00 GMT

Well I've finally stepped into the current century and got myself a smart phone. How did I ever live without it! Well, quite easily actually (sometimes its a pain being bombarded with emails AND texts everywhere you go!) - but I have discovered some excellent Apps for organising my life. When it comes to property and renovations, there are loads of fantastic Apps to choose from so I thought I'd share a few of my favs.

1) If you're short of renovating ideas and can't be bothered flipping through dozens of magazines or trawling the internet for hours, then try 'Houzz'. Houzz is a massive collection of design ideas with over 260,000 photos to get inspiration from. It's like having a digital scrapbook in your pocket - making ideas easier to find, file and refer back to. You can search categories such as bathrooms, kitchens, entries, exterior, office, landscaping and more (there are 21 categories to choose from). The biggest problem will be knowing which ideas will best suit your property, budget and purpose as 260,000 ideas can be pretty overwhelming! Here's a link for iPhone users. Android users will need to search their Appstore for this one. This App is Free.

2) 'My Measures & Dimensions PRO' is an app that helps with the getting done of your renovation. Take a photo of something and draw the dimensions directly onto the photo using your phone. You might need to remember the dimensions of a room so you can buy the correct number of tiles or the right amount of paint. You might need to remember the gap available for a particular appliance. Eliminate the need to sketch the item in order to record it's dimensions. Take the photo, measure the dimensions, add the dimensions to the photo and then take your phone and photo with you to the store. This app saves time (and frustration if you're not too good at drawing!) and is an excellent addition to any renovators tool kit. iPhone users get it here and Android users can get it here. This App is $4.49.

3) ‘My Colour’ is a great free app for working out what paint colour something is. This app was released by Dulux and so of course directs you to their paint colours. Take a photo of something and this App will automatically tell you which Dulux paint colour is the closest – great if you’ve spotted a colour you like and don’t have any colour charts to match it to. When I first downloaded this App, I took a photo of a red T-shirt to test it out – and Bingo the App told me the colour was ‘Dulux, Red Clown’. Make sure when you take your photo you have a good amount of natural light (but not direct sunlight) on the object otherwise the recommended colour won’t be accurate. Of course you won’t really need this App if Hotspace are doing a Renovation Action Plan for you, because we’ll tell you all the exact colours you’ll need anyway! I'm not sure if this one is available on Android, but the iPhone version is available on the Dulux website (http://www.dulux.com.au/specifier/colour/mycolour--iphone-app)

4) ‘Property Checklist’ is a basic, but very useful App designed to help you compare properties when researching to buy. It’s easy to go through a day of open homes and forget which property had what features. Property Checklist allows you to add properties, list their price, the agent and the agent's number. It also allows you to take a photo of the property so you can easily remember it. The App will list each property and rank it based on a score from how many items you checked off. Add as many checklist items as you like to tailor the App to suit your search. This App is initially free but then paid for once more than one property is added (which renders it useless until you pay for it really!). A great App! Apple users can find it here. Android has a slightly different App which is available here

What are your favourite renovation and property related Apps? Make a comment here (click below) or on our Facebook page - http://www.facebook.com/HotspaceRenovations

Get more helpful renovating hints and tips by subscribing to our newsletter here.

Renovating - hints and tips from an expert

Wed, 23 Nov 2011 01:40:00 GMT

Do the words 'opening a can of worms' sum up the way you feel about renovating? For your first few reno's it's very common to muck your way through and hope for the best result - whether for your own home or your investment property. When it comes to the 'what to do to my property' part, there's nothing better than a Renovation Action Plan or completing our DIY Renovating System course for a comprehensive, 'to-do' list to keep you on track. But...

For the 'getting my renovation done' bit, there are some key things you will need to do. It's all very well having a strict plan, but you also need to make sure that your strict plan is adhered to. Mark Trafford from Maintain To Profit suggests the following:

Choosing the best contractors for the job or project

When choosing a contractor you should look at each company specifically to match the type of work you require. You should be given each contractor's rates, areas in which they work and the hours they work. All contractors should clearly display their trade qualifications and be FULLY insured for public liability to keep you and your property safe at all times. Do they have a current health and safety policy? Always obtain more than one quote. All trade companies should provide written quotes. Check references thoroughly and make sure they are recent.

What should I expect from my contractor?

You should expect a response to any email, message or phone call promptly. You should expect the contractor to discuss your project with you, and to arrange to meet with you on site to review your requirements when it is convenient to you. In conjunction with a site visit, a Hotspace Renovation Action Plan is an excellent tool for contractors to quote from - to make sure they are quoting on (and ultimtely going to DO) exactly what you're wanting. Small jobs can usually be estimated by phone (subject to final pricing on site). Your contractor should be prompt, presentable, professional and able to help you understand the process that they will be undertaking for you in full.

Managing my contractor

Once you have engaged your contractor you should agree both the start and completion date of your project. You should also formalise the arrangement, including any quotes, in writing where necessary. You should ensure your contractor understands any special requirements you may have, such as ‘no weekend work', ‘access instructions', ‘parking', ‘materials delivery', ‘health and safety issues' such as ‘small children' or ‘elderly people' or ‘pets'. Make sure that every detail is covered and, if necessary, put it in writing for both parties.

Paying my contractor

Your contractor should discuss with you, and include in any quotes, payment for labour and materials and any other costs such as hiring of scaffolding and removal of rubbish. Never pay your contractor in full in advance for any project. Larger projects should have staged payments that both parties are comfortable with. Consult your solicitor if you feel you need to use a trust fund or security of payment Scheme Company in the process. The payment term should be included in any quotations and any changes to the schedule should be documented.

Problems, disputes and resolutions with my contractor

It's inevitable that on rare occasions, allowing for the best of intentions – and even after following the guidelines above -- disputes or misunderstandings may arise between parties. The best approach is to be up front and honest with your contractor. Talk to them calmly and in a reasonable manner, and you should expect the same treatment in return. It may be a simple misunderstanding that can be solved or negotiated to an amicable resolution between both parties. If you cannot reach a resolution, try using a mediator from the building industry. As a last resort, you can lodge a claim with the disputes tribunal who can settle the matter in a cost effective manner. Always keep full records and documentation (including emails) of contracts entered into. Make notes about any conversations you have had. Remember a win/win outcome is always best.

When you need your property renovated or maintained it is so important to use qualified trades people that do the job properly the first time around.

Maintain To Profit is an Auckland (NZ) based company. www.maintaintoprofit.co.nz

Getting Bang for your Buck from your Renovation

Fri, 11 Nov 2011 11:58:00 GMT

From a property ‘face-lift’ to a full-blown renovation overhaul, home improvements have varying degrees of success. Spending $50,000 on renovating your home won’t necessarily give you a better result than if you spend $10,000 - if you do the wrong things.

There is a school of thought that the more you spend, the better your renovation will be and the more value you will add. However, I’ve had plenty of clients spend no more than $20,000 with dramatic improvement to their properties. On the other hand, I’ve rescued people who’ve spent $80,000 and not added anything close to that in value.

The most successful renovations are ones that look great but don’t cost the earth. But how to achieve this critical balance – a designer look on a budget?

Firstly, its important to use the principles of good design on your renovation. This, together with a clearly defined budget and a system to help you stick to your renovation plan and financial limit (so you don't over-capitalise) is critical.

The Design Principles are a universal set of ‘design rules’ used by interior designers and architects to achieve that ‘designer’ look that you may often envy but are not sure how to achieve. Utilizing at least 2-3 of the design principles in your renovation is an excellent way to get a designer look from your property. And it doesn’t have to cost you a fortune.

There are as many as 10-15 ‘Design Principles’ but the main three I choose to work with are Cohesion, Focus and Balance.

Cohesion – This is where you create ‘flow’ through your property by using similar elements, colours and details. In the context of renovating the exterior of your home, this is about creating a connection between the fence and the house and then another connection between the exterior of the house and the interior of the house. In the context of the interior of the home, its about connecting each room to one another without every room looking the same.

Focus – A focal point is an essential element to good design. On the exterior, this will usually come in the form of the entry point (the front door) and on the interior it is likely to be the kitchen splash-back, a fireplace, a bathroom vanity and mirror or even a piece of furniture.

Balance – Balance in design is when something visually looks even and this is critical for a modern, aesthetically pleasing look. You can use colour, texture and mass to adjust the 'visual weight' of something - and therefore create a balanced look with every part of your renovation.

There are infinite ways to use the design principles when updating your property - a much over-looked way to get real bang-for-your buck from your renovation. Check out the photos on our Gallery page for ways the Design Principles can be used to weave renovation magic!

Renovating before you Sell your Property

Sat, 12 Nov 2011 02:51:00 GMT

If you own a property but thinking of selling, you might be wondering whether to renovate it first – or just sell it as is. This is a common dilemma - and one that I talk to people about almost every week.

There are a couple of pros and cons to renovating before you sell. Here's some food for thought, before you decide one way or another.

On the 'for' side of the renovation argument is the fact that it is better for you to add the value to the property, rather than leaving the potential profit for someone else to take advantage of. However, if you do renovate prior to selling, it does need to be a case of spending $1 to make $3 or $4 (or spend eg $20,000 to make $60,000 or $80,000 or more).

A well renovated property that is good value compared to other competing properties on the market at the same time, means you are less likely to be beaten down on price – and your property is more likely to be considered over others for sale in your suburb.

The last thing you want to do is spend too much money on your renovation and end up having to ask more for the property. If that were the case, you would have been better to leave it as it was and sell it un-renovated (and not have to go through the renovation process at all).

If you want to sell your renovated property asap, then you need to be realistic about your asking price and this is only possible when you have been smart with your renovation choices. A smart ‘sellers’ renovation is where the property:
o   Looks and functions better than competing properties in the same price bracket
o   Is renovated to meet to needs of the property’s target buyer audience
o   Is attractive to 95% + of the buying population
o   Offers excellent value in the eyes of the buyer

In many cases, a pre-sale reno will increase the value and sale price of your property significantly. Sometimes though, a reno is simply a necessity to bring it up to par with other properties on the market at the same time. Get your renovation right and it will be your property that draws buyers in as the best option for them at the time.

Buyers know they’re in a ‘buyers market’ at the moment and they will sniff out any reason to knock you down on price, so you need to offer them the sort of property they want to buy (see above bullet points). If you do this, then you will have more interest from more buyers and the price will become less and less of an issue. Research suggests that when purchasing anything, price actually comes about 5th or 6th on the list of what people consider. They are more interested in getting just what they want, than getting something cheaply.

If your property is located in an area likely to attract families and professionals, you may find that once renovated, it is more likely to sell. Professionals in particular are less inclined to want to worry about doing a renovation – and prefer to have it all done for them. This is the same with families – particularly those with younger children.

On the other hand; singles, empty nesters or families with older children may be happy to carry out a renovation of their own.

On the Con’s side of the renovation argument is the fact that in this market, people are out to hunt down a bargain. The less you spend on your property to prepare it for sale, the less you need to sell it for to recoup your costs.

If you leave your property as is, you are more in a position to sell it cheaply which is what many people are looking for. They would rather buy cheaply and then recreate the home that they want from a blank canvas. However, is it what you want? Will you get out of the sale the amount of money you need doing it this way?

The other thing to think about is that if you were to renovate, your renovation tastes may differ to that of your potential buyers. If you renovate in the wrong way (using the wrong colours, materials, fixtures and fittings), then your property may not be one that is attractive enough to have the offers flooding in. This is a big mistake and I see it often!

To decide whether you will renovate – or not – ask yourself the following questions:

o   What do you want your property to sell for?
o   Can you leave your property as it is to achieve this price (tip: ask 3-4 respected Real Estate agents their opinions of the expected selling price for your property)
o   If you do need to upgrade your property to get the sale price you want, what do other properties around this asking price in your area look like (ie the traits of your competing properties)?
o   What exactly do you need to do to your property and how much can you get away with spending to bring it on par with these other properties? (tip: Hotspace Consultants – www.hotspaceconsultants.com - can help you with this one).
o   How much time have you got?
o   Do you have the confidence and motivation to carry out a renovation yourself?

Beware of Real Estate agents who say NOT to renovate your property. In many cases, this is because they want your listing right now – not in a few months time. On the other hand, they may be quite right in advising that selling an un-renovated property is the better option in their area.

Do your own research about whether a renovation on your property is worthwhile for the result you want.

If you’d like help working out exactly what to do to your property renovation-wise, before you sell, then think about a Renovation Action Plan (prepared by us especially for your property) or completing our DIY Renovation System course (where we guide you through creating your own DIY Renovation Action Plan).

Depreciation and your Investment Property

Wed, 20 Apr 2011 23:43:00 GMT

When you think of tax deductions for a residential property investment, you probably think of things like mortgage interest, maintenance & upkeep, property management fees, council rates, etc. But there's one other very big deduction you may have overlooked... depreciation.

Matt Stanley from Asset Economics shares his knowledge and the benefits of getting a Depreciation Schedule for your property...

What is depreciation?
As your investment property ages, the building itself actually depreciates in value, even as the overall value of your investment increases. This isn't as surprising as it first sounds; after all, your land may get more desirable with age, but most buildings certainly don't. In other words, your land is responsible for the increase in value – the house or unit on the land just gets old and tired.

Why is depreciation tax deductible?
Much of your property's depreciation is considered an investment expense, making it tax deductible. In other words, you can reduce your taxable income, and therefore pay less tax. Generally, this equates to a significant tax refund at the end of each financial year.

How much depreciation is tax deductible?
How do you know how much depreciation is tax deductible? Unfortunately, this is where it gets tricky. The Australian Taxation Office (ATO) has a lot of complicated rules and regulations governing what's deductible depreciation and what's not. Even your average tax accountant doesn't have the specialist expertise to ensure you claim all the depreciation you should and - just as importantly - nothing you shouldn't. In fact, these days most tax accountants simply advise you get a depreciation expert to prepare a detailed tax depreciation report for your investment property. Only then can you be sure that you're not missing out on depreciation-related deductions you're entitled to, and that you're not making illegal claims. (If the ATO catches you claiming deductions you're not legally entitled to, you'll have to pay them back and you can be fined.)

How do you choose a depreciation expert?
Just as you wouldn't choose any old tax accountant to do your annual return, you should pay very careful attention to who prepares your depreciation report. For maximum tax deductions and complete compliance with AIQS regulations, make sure:

• The person who prepares your report is a fully qualified quantity surveyor and that they are a member of the Australian Institute of Quantity Surveyors (AIQS).
• You know exactly what you'll be charged for your depreciation report - you should be able to get a free fixed-price quote with no obligation.
• You know the turnaround time for the preparation of your depreciation report.
• Your depreciation company provides a money-back guarantee if your deduction isn't at least twice as much as their depreciation report fee.

What is a Quantity Surveyor?
A Quantity Surveyor is an independent professional consultant to the construction and property industries. Typically, Quantity Surveyors provide construction cost advice to property owners, investors, and developers. However, Asset Economics offers investors specialist advice on property tax allowances relating to income producing properties.
Property tax allowances are a valuable aspect of any property investment due to their ability to enhance an investor's return and produce a better cashflow. However, a high level of expertise is required to ensure that investors obtain maximum allowable entitlements.

What are property tax allowances?
Property tax allowances form part of the Income Tax Assessment Act 1997 (hereafter called 'the Act') and provide an opportunity for owners of income producing property to reduce their assessable income. There are a number of property tax allowances available to property owners, investors, and developers, including allowances for building structure and depreciation on plant items. Property tax allowances are often simply referred to as property depreciation.

Can property tax allowances increase my investment return?
Property tax allowances can reduce an investor's assessable income, and by correctly claiming and maximising these deductions, investors can significantly enhance the after tax return from their investment and generate a healthier cashflow.

What allowances are available for my investment?
Depreciation Allowances (Division 42 ITAA 1997)
Depreciation allowances are available to owners of plant in both new and secondhand properties that produce assessable income. There is no definition of plant under the Act. However, attached to Income Tax Ruling 2000/18 there are over 850 items of plant that may be depreciable including carpets, air conditioning and light fittings. Depending on the property's specifications, furnishings and sale contract conditions, owners may be eligible to claim between 10% - 20% of the building's value as depreciable plant.
Building Allowances (Division 43 ITAA 1997)
Income producing buildings can be eligible for building allowances, provided construction commenced after 17 July 1985, or in the case of short term travellers accommodation after 20 August 1979. The rate of write-off is either 2.5% p.a. or 4% p.a. dependent upon construction commencement date. Building allowances apply to the overall qualifying component of the original or refurbishment construction cost. These are calculated from the date of completion of construction (excluding the cost of all plant and non-eligible items).
The following table shows an example of the property tax allowances available to property investors when claims are professionally prepared. Residential Property with a Purchase Price of $175,000 which includes a land value assessment of $45,000.

Renovations, extensions, repairs, and write-off of demolished works can provide additional opportunities for the investor to increase the deductions and return on their property.

When should I obtain a property tax schedule?
The best time is usually as soon as possible after settlement. Items included in the original purchase price can then be identified as distinct from any items and/or expenses incurred during the remaining period of the property ownership. The ability to analyse these costs allows for greater accuracy and maximum returns from the calculation of depreciation and building allowances.

Click here for your $50 voucher towards an Asset Economics depreciation schedule - www.asseteconomics.com.au

Renovating for Student Accommodation

Wed, 20 Apr 2011 07:15:00 GMT

Renovating property to suit students specifically is a task that if done expertly, will reap an investor real long term rewards. Different to renovating a property for sale, or even a property to rent to a ‘standard’ tenant or family, student accommodation design must be, more than anything – practical. Practicality does not have to be boring or plain however, and designed well, a student house or flat will reward you with a higher (and consistent) rental income.

Think about renting each room out individually rather than as a whole house. You can often get an additional 10-20% income from doing it this way. However, there is a down-side - managing the individual students and ensuring each persons rent is paid on time every week.

The ultimate goal is to provide your tenants with a good ‘living experience’ so that they stay (and pay) long term - and this can be achieved by following some simple guidelines. It may sound an easy thing to do once you've read the following pointers, but every property is different, so take guidance from fellow investors and professional renovators (such as Hotspace Consultants) to give you expert, independent advice that will, in the end, make you more money from your property.

Exterior:
•   Create a completely hassle free, low maintenance garden and include the maintenance of it in the rent. Avoid feature gardens, bark and flowers if possible and remove any existing plants that cause excessive untidiness as they lose their leaves.
•   If possible, provide several spaces for bicycles to be locked up - under cover is preferable – and somewhere easy enough to carry to. Providing such spaces will help avoid bikes being stored in hallways and balcony areas which can prove unsightly and detract from the appearance of the property.
•   Extra off-street parking is a bonus but can be expensive. Consider this as important as long as it fits within your budget.
•   Provide an under cover smoking area where possible to discourage tenants from smoking inside the house. This should ideally be at the back of the property where the sight and smell of these activities does not impact on the aesthetic quality of the property. Providing large ‘butt bins’ will help eliminate the lawn becoming littered.
•   A suitable washing line in direct sunlight will help avoid tenants drying their clothes over balcony handrails and out windows – relocate the existing if necessary or provide new to avoid this potential negative visual impact on the property.
•   Provide good quality entry mats to save the flooring from inconsiderate wearers of dirty footwear.

Bedrooms:
•   Ensure each student has a private personal space – not only to sleep but also to study.
•   Bedrooms that are large enough to fit a bed (double preferably), desk, chair, bookcase, wardrobe space and a pin-board are ideal.
•   Fitting insulation within the wall cavities will reduce the sound transfer from one bedroom to the next, so consider this a priority.
•   Think about fitting locks to each of the bedroom doors too, as this is a very inexpensive ‘bonus’ - especially for female students.
•   Paint walls a neutral colour to create a blank canvas for your tenants to add their own personality.
•   Carpet should be hard wearing and reasonably dark in colour. Consider an inexpensive commercial grade carpet especially if your accommodation houses three people or more.

Bathrooms:
•   Hard wearing, practical bathroom fixtures and fittings will ensure a space that will last for a longer period.
•   Create a fresh look by cleaning or replacing dirty grout around existing tiles and clear coat to prevent further penetration of mould.
•   Shower door glass can be clear coated to make it easier to clean and prevent unsightly discolouration.
•   Joinery should have robust fixtures and hinges to further increase life-span of the property
•   Replace shower or bath curtains in between tenants and remove any window coverings in the bathroom areas.
•   If necessary, fit textured glass or frosted film to the inside of exterior clear glass windows.
•   Always install extractor fans to eliminate dampness and eventual deterioration of the interior finishes.

Kitchen:
•   Cabinetry made of a low pressure laminate (Laminex etc) is an ideal finish for high wear kitchens. Steer away from 2-pac/lacquered style kitchens which can damage more easily and are expensive to repair.
•   Be sure to install good quality hinges and handles.
•   Bench tops in a high pressure laminate (such as Formica) are as good as any – and reasonably inexpensive.
•   Remove the waste disposal unit if there is one as these cause more maintenance issues than they’re worth.
•   A dishwasher is a bonus – and again buy the best one you can afford (with a good warranty) if there is space.
•   Avoid tiled flooring if possible and instead install timber/vinyl/linoleum instead. Tiles when damaged, are expensive to repair and often impossible to match. Vinyl and timber are warmer under foot and vinyl in particular is inexpensive and quick to install. Cove it up the cabinetry kick strip to allow more effective cleaning of the floor.

General:
•   Provide adequate power-points and data outlets to all areas to avoid and ‘over-load’ situation – and arrange a broadband internet connection in all cases.
•   Ensure lighting is adequate in all areas – particularly study spaces. Sufficient light levels can be achieved using energy efficient fluorescent light bulbs and have the bonus effect of being cost effective for the tenants long term. These however can be harsh and bright, so consider a softer lighting option in communal living areas. ‘Bug rings’ (for suitable fittings) are an additional cost but worth the extra expensive to help maintain a fresh, bright emittance of light.
•   Fitting door stops to all doors will help with eliminating damage to walls caused by knobs and levers from careless closing and opening.
•   Install good quality curtains (ready made selections are ideal) rather than budget versions which are cheap to buy but difficult and usually expensive to have commercially cleaned.
•   Consider supplying a good sized fridge, a large washing machine and a clothes dryer. These are items students are less likely to own and will increase the demand and rental income on your property. Ensure they are serviced regularly. Tip: laminate a small note on the dryer to remind the tenant to clear the filter after each use.
•   Repair and paint any holes in walls caused by picture hooks and insist (and include in the contract) that any artwork etc.. be hung using removable adhesive hooks.

What’s important is that you don’t let the ‘practicality’ aspect of your renovation to over-shadow your opportunity to create a property with a more modern edge – with a distinct advantage over other rentals in the area.

You can easily combine the two (modern looks and practicality) to create a fantastic property that will help you harvest some great gains. For minimal cost you can create a ‘custom’ designed dwelling that suits students to a tee and adds a valuable piece of real estate to your portfolio. Create one that your student tenants will respect and stay in long term – even over holiday breaks!

Choosing a Property to Renovate

Wed, 30 Mar 2011 01:17:00 GMT

The current state of the economy has stopped a lot of people in their tracks. Many are of the view that they will ‘tread water’ for a few years until the economy improves. Others are taking this opportunity to pick up a bargain, often helping a distressed seller in the process and making a profit from their efforts.

Though profits might not be as easily sought than in previous years, they’re still there I can assure you. In addition to buying well (at least 20% under market value), a well thought out, budget conscious renovation is a great way to turn a property into a money earner.

Since capital growth cannot be relied on for at least another few years (5 years according to some property commentators!), now is not the time to necessary buy and hold expecting a passive profit.

You’ll need to be the judge of what a ‘good deal’ consists of in your suburb of choice when hunting out properties to purchase.

Regardless of whether it’s a property you already own or one you’re planning to buy; If your plan is to then renovate the property, you’ll need to make sure it has a good foundation for a profitable reno. What I mean by that is:
a) That you have the scope to make significant improvements to the property (the property is not too new/tidy/already renovated)
b) That the changes you do need to make to the property will not cost too much (the property is not too damaged/old/in need of lots of repair work)

So it’s all about buying the right property – at the right price. But how do you know the property you’re looking to renovate is a good one or not?

There are a number of criteria to look for (including the area, demand etc…), but as a renovation expert, I’m focussing here on the criteria of the property itself. And as a ‘quick reno/quick flick’ lover (max 2 month reno’s), my advice again may be different to someone who is happy to go to the extent of adding rooms or subdividing a property for example.

One of the key things I look for is the ability to either a) add interest or b) minimise interest (or detail).

Choose properties with a combination of simple, plain, ‘flat’ and uninteresting areas and components AND over-detailed, busy areas or components.

Here are a couple of guidelines to get you started:

Minimal or no landscaping: If there are minimal plants and landscaping around the property, add simple, low maintenance plants around the base of the house. Also consider simple landscaping up the driveway or along the fence line to ‘soften’.

A plain looking kitchen (with good ‘bones’): If the existing kitchen is plain, add interest to it with a new bench top and/or splash back. New lighting will give it sparkle. Jazz it up with new handles and fixtures and fittings as your budget permits.

Carpet or vinyl flooring that is the same colour as the walls (or near to): A darker colour on the floor will ‘stabilise’ the look and feel of a space and linear patterned flooring will add interest. Where walls and floors are too plain and similar, replace or renovate existing flooring to suit.

Unpainted areas – fence, pergola etc…: Especially in a suburb where all other fences are unpainted, add uniqueness to your property by painting yours. This not only creates a point of difference, it will connect the fence to the house and create a larger area of perceived ownership. It also adds depth and interest – but only if you don’t paint your fence the same colour as the house!

A plain bathroom with basic fittings: You may find that you need to replace a vanity or toilet, but as long as the bones of the bathroom are ok, add interest to it with a coloured splash-back, new tap-ware, and a new shower curtain or screen. Replace the lighting with fittings that emit a warm, flattering light to reflect off the walls

A trained renovation expert or interior designer will show you how to create a property that looks fantastic and is ultimately worth more. Good renovation advice is an investment in your end result and should be considered as important as your real estate agent, valuer, mortgage broker and trades-people.

Feel free to send us a ‘Preliminary Enquiry’ to discuss the potential of your own forthcoming renovation.

Exterior Reno’s – maximising the first impression of your property

Sun, 13 Mar 2011 07:29:00 GMT

The exterior of your property is the first thing your buyer, your tenant or your valuer sees, so it’s critical to get it looking spot on. Will you create a property exterior that is so-so and risk potential buyers and renters to just drive on past? Or will you make it stand out from the crowd so that the valuer, prospective buyer or renter sees instant value in what you have created?

Think about it – there’s no point in having a beautiful new bathroom and a top of the range kitchen inside the house if a potential purchaser or renter is not even going to make it through the front door. Or if the valuer makes their lasting impression before seeing what else the property has to offer.
If it’s a property you’ve owned for a while, then before deciding what you’ll do to the exterior, try to remember what you thought the first time you saw the property. In other words, step back and see the property with fresh eyes and a new perspective.

If it’s a new property to you, you have the advantage of seeing it the same way as your valuer, tenant or buyer.

Rather than thinking about what you’re going to do and then gathering pricing to do it, I suggest working the other way around.

Start by working out what percentage of your overall budget you can afford to spend on the exterior (more rather than less, simply because it is such a crucial part of the property in terms of value adding).

Now you have a dollar figure to work to, you can begin to figure out what you can afford to actually do.

Sometimes, you’ll need a complete top-to-toe renovation. Other times – and generally on lower value properties - you need to make do with some clever tweaks to impress your valuer or potential buyer or tenant.

Here are 4 Top Tips to get your juices flowing…

Create a focal point: Make sure the focal point is the front entry. Whether you enhance the entry using contrasting colours or materials or add a new portico, porch and landscaping, a simple and modern effect can usually be created without too much effort or cost. There are plenty of resources out there to get ideas from. Jump on Google Images and search ‘entry porch’ or ‘portico’ or ‘front doors’ or whatever it is you’re looking for ideas about.

Make the property feel inviting: You want to create an inviting feeling about the property. Avoid a fence that is too high or spikey plants (such as Yukka’s) or large trees that block the house too much. The Japanese do ‘inviting’ very well in their architecture; they create intrigue which draws a person further and further in. If you can’t see the front door from the road, then you at least see something that intrigues you to move towards the house. And when you get there, you see something else that inspires you to move forward – and so on. Avoid any sort of big block or barrier as this will deem the house uninviting and therefore unattractive and unappealing.

Give the property visual ‘substance’: Create a visual weight at the base of the house to anchor and stabilise it. There are several ways to do this, but an easy one is to use landscaping. Another way is to use a darker material or colour at the base of the house (if that is the style of the house). This is particularly important when the house is elevated from the road.
Create a flow around the property: If there is a fence, make sure it is ‘tied in’ to the house in some way (using similar colours or materials in some way). Connect your colours and finishes to each other (and to the interior if possible). Use similar plants right around the property so you have a continuation of colours and shapes.

Improve the ‘crispness’ of the exterior: The types of properties you’ll be buying (Nanny and Poppys house) are often faded and lack definition. Compare this to new, modern homes. What’s the difference? Crisp, sharp lines and neutral dense colours. Use this knowledge when deciding what you will do outside – create sharp garden edges, use neutral fresh colours. Strip the gardens of anything fussy and give it a lean look with a few key structured plants. Water-blasting dirty driveways, paths and decks will instantly help achieve a crisp, clean effect too. Make sure the letterbox is in tip-top shape. A letterbox is like a book cover; it’s only a small element but it speaks volumes about what’s inside. If the house is not visible from the road, the letterbox is the first introduction someone has – make sure it’s a good one even if the property is low value.

For one-on-one advice for your own external renovation, check out our Renovation Action Plan service. Just $990 (for an 'Exterior Only' Renovation Action Plan'.

Renovate and Profit Seminar (Brisbane, March 19th, 2011)

Wed, 16 Mar 2011 05:39:00 GMT

Renovate and Profit Seminar (March 19th 2011). Are you located in Brisbane and looking for more info about how to renovate for profit? This course is designed to show you how to go through the whole process of finding, analysing, buying and then actually renovating your investment properties PROFITABLY.

I am really excited to be a part of this seminar and teaming up with such a fantastic group of property professionals. My talk is just one of 7, so I know it will be an informative, educational day well worth attending. Here's more info...

RenovateAndProfit.com brings you an information day in conjunction with Kevin Turner's RealEstateTalk program from 4BC Radio. We will take investors through the whole process, techniques and tools involved in successfully renovating for profit. Hosted by respected renovation expert Ana Stankovic (frequently contributes to publications such as Australian Property Investor magazine, Wealth Creator, Renovating and Decorating magazine, Handyman, Property Review Weekly, Herald Sun, The Age, Courier Mail, 4BC radio, 2UE radio, etc). Ana will go over a number of current case studies (including her own projects).

We are very proud to announce Kevin Turner, Sally Healey, Robert Balanda, Lee Dittmer, Jane Eyles-Bennett and Susan Milicevic as guest speakers at this event!

- Kevin Turner who's radio program on 4BC radio, http://www.realestatetalk.com.au/ is a great source of information for investors.
- Sally Healey who holds a post-graduate qualification in counseling, is a qualified NLP coach and is also a member of the Australian Institute of Management.
- Robert Balanda (MBA-Lawers) is also author of 'Clauses Made Simple' and a columnist for Australian Property Investor magazine.
- Lee Dittmer who's runs an award winning Mortgage Broking business and works closely with the MFAA.
- Jane Eyles-Bennett interior designer who specialises in getting the designer look on a shoestring
- And Susan Milicevic, owner of Aspire Consulting - who not only assist investors with their accounting needs but also continually educates about accounting through government initiatives.

Each of these brilliant individuals will be sharing their vast knowledge with our Brisbane audience as well as the nationaly recognised renovating for profit specialist - Ana Stankovic.

Focusing largely on the analytics around what adds the most value, renovation costing and profitability analysis, it will also feature guest speakers and a panel of experts to answer all your questions as well as some fantastic gifts. If you want to learn from active property investors who are currently walking the talk and see tools such as Renovation Costing Template and Property Analysis Tool in action, you have to attend this exceptional event!

To book your ticket for this event on March 19th 2011 event from (9am to 5pm), go to: http://www.renovateandprofit.com/Brisbane or call the office on: (07) 3040 1990

How To Feel That You Truly Deserve To Achieve Your Goals

Fri, 18 Feb 2011 05:06:00 GMT

My friend Jason Marionoff has been investing in property for many years and has a unique take on how our mindset affects our success. He is one of the contributers in a new book called Property Millionaire and has kindly agreed to share the following article with me and all the friends of Hotspace.

How To Feel That You Truly Deserve To Achieve Your Goals - Jason Marionoff

Up until my early-mid 20’s, my focus on wealth creation was actually quite selfish… Back then, it was all about what the money could do for ME personally. Whilst I found this motivating at the time, it also carried many limitations. Over time, I gradually concluded that a person’s financial progress has a tendency to slow down (and may even reverse), if their focus remains solely on themselves for too long.

Before I explain my reasoning behind this, I’d like you to consider how you would react if four different people each knocked on your door, explaining they wanted your support towards the following causes:

   1. The first is collecting money to buy a convertible sports car, which he’s been wanting all his life!
   2. The second is collecting money to help buy her husband a car as a gift for their wedding anniversary.
   3. The third is collecting money to buy a replacement car for the young family in the next street, whose uninsured car was recently written-off in an accident that wasn’t their fault.
   4. The fourth is collecting money to buy a car which will be used daily to transport special needs and elderly people, so they can access ongoing medical treatment as a free community service.

If you were to pick any one of these to donate to, which would it be? My guess is that you’d be unlikely to give to the first person. How about the second one? Or, would you feel most open to donating to the third or fourth, assuming the situation they described was completely genuine?

In each case, I have included a progressively bigger “why” (i.e. reason outside of the person asking) as the cause behind the donation. I believe it is fair to say that most people would naturally feel more supportive of a cause that goes beyond the needs of one individual (especially if that individual appears undeserving of what they seek). Would you tend to agree?

Interestingly, our opinion of others can also reflect our view towards our self. Therefore, if our goals are solely for our own personal satisfaction, then at some level I believe there is a part of us which isn’t as motivated (i.e. when compared to goals that benefit our family/friends, or the community at large).

Now it’s not my place to judge whether a particular goal is right or wrong, good or bad; nor am I saying that we shouldn’t indulge in extravagances on a personal level… However, what I am saying is this:

Our natural tendency is to want to give our money (and/or time) to those we feel are deserving (and withhold it from those whom we feel are not deserving). If this is true, then perhaps a hidden part of us may assess whether WE are deserving of what we are seeking? This could then go a long way towards us subconsciously making decisions which lead us closer to, or further from, achieving our own goals.

Now whether this is true or not, a logical observation is that we will become a more deserving person if the choices we make (and actions we take) assist others in addition to ourselves. It might be our own internal level of deservingness, or the perception of others outside of us; however either way when we feel we deserve something, this will naturally give us a better foundation to allow it into our life… Why? Quite simply, because we deserve it – and we like it when people get what they deserve! :)

I appreciate that this article may come across a bit deep/heavy, but please allow me to summarise the whole intent of the article by including a relevant quote from my chapter in the Property Millionaire book:
"I feel the best way to achieve lasting success is to build the success of others along the way."

So next time you have an opportunity to set a goal, how about considering it from a bigger perspective? How can achieving this goal help you make a positive difference to your family, friends and community? If you can associate a big enough benefit (i.e. reason “why”) to achieving the goal, then I believe you are much more likely to achieve it! Why? Because we’ll all want you to have it – because you deserve it!!!

Jason Marianoff

Queensland Floods - Impact on Real Estate

Mon, 24 Jan 2011 04:03:00 GMT

Jason Whitton and Sam Saggers from Positive Real Estate have put together the following - their take on how the Queensland floods are likely to hit the real estate market. Thanks guys - I know a lot of people are wondering what is in store so they can make plans for the next few years...

"The recovery efforts have begun, economic impacts will be felt! Tourism, the Coal Industry and small business are all affected. It is always a sensitive discuss economics as people still lie effected by the 5000sqm of flooding in QLD.

In these unfortunate times and circumstances people have formally asked Positive Real Estate, what our opinions are in relation to real estate movements in Brisbane are? We feel that it would be remissive of Positive Real Estate not to answer your questions.

So what is likely to happen?

We believe that the Brisbane property cycle will now slow marginally.

According to many publically listed property funds, fund’s managers have estimated and reduced profit expectations from 12% to 9% for the year ahead.

The property market will be effected immediately and will be slow for up to six months. The owner occupier market will reach very low sales volumes. Auction clearance rates will dip below 20% as home buyers refrain from entering the market.

In 2010, QLD was one of the lowest performing property markets in the country. This poor performance led a lot of speculative investors looking for value property deals to enter the market.

Most investors still see the QLD market and in particular Brisbane’s inner suburbs as a real value buying and investors in 2010 bought well positioned investments. Brisbane has pockets of property that investors can buy well now knowing that in the future, the stock will be very tightly held.

Brisbane has been a strong speculative market for investors, and these investors will see little affects from the current floods as their properties are not yet built. They will gain more time in the market as constructions sites are stalled to ensure foundation work is solid.

The major side effects that investors will see are listed below.

Rents will grow as displaced home owner rent during transition

Re-construction will begin and create a building renaissance in QLD
The Coal Mining Industry will stall for weeks as they safeguard mines that have been flooded
Tourism markets will struggle in QLD
Supply of new homes will slow as Town Planners stall approvals
Insurance premiums will be much higher as flood probabilities in areas will change.
The Brisbane market, recently featured in the top 10 best valued cities worldwide to invest in real estate in! Brisbane featured as it has great value buying propositions.

This week Channel 9's Today Show discussed the value of QLD Real Estate after the floods with Dan Molloy from Real Estate Institute QLD; who touches on many of the issues mentioned above including property value pressure, what to do now, what you can expect to happen and the value of your real estate to the flood affected areas. Click here to view this interview.

Kind Regards

Jason Whitton & Sam Saggers - Founders of Positive Real Estate"

The Value of Window Coverings - Guest Blog

Fri, 14 Jan 2011 01:49:00 GMT

Thanks to Tom Vatury for the follow insights into window coverings!... "There are many ways to improve a home that will help make a better impression on hesitant buyers. Everyone should do the basics like re-paint the walls and clean the floors before showing their property, but what about the window treatments?

There are a few things you can check and improve to spruce up these very important, but frequently overlooked home features. The first thing to do is review the current conditions of your window coverings and determine whether they need cleaning, repairing, or replacement.

The majority of window coverings will probably be found in fair conditions, and will simply need a light cleaning to be presentable, unless the home has been abandoned or abused by bad tenants. For most blinds and shades this simply means some feather dusting and light vacuuming. If drapes are more heavily sullied and can be easily taken down, they should be more thoroughly washed. Check the fabric and follow instructions if the tag is still attached for home washing. You can also search online for specific fabric care if the tag is missing. Hang to air dry and avoid using a drying machine or iron, which will likely ruin or warp the fabric. Most drapes can also be sent for special dry cleaning, but this can be costly for larger pieces.

The most common problem with window treatments is a jammed window shade cord or chain. This can usually be repaired easily. Ask your local window treatment dealer if they do repair work or have replacement parts for your shade. You can also try ordering the replacement part directly from the manufacturer. If the window covering was purchased in the last 5 years it may also still be under some warranty.

Some rooms might benefit from having uncovered windows to highlight a nice view or to let natural lighting flow in, but even in these cases, it will be preferable to have some sort of window covering in place, so that it doesn’t turn into a burdening item on a buyer’s move in list. Simply use tiebacks for curtains or draw up the shades and blinds for these spaces that will look better with open windows. Remember that opening the window coverings can also make a smaller room feel larger and more spacious. The opposite usually works to create a cozier feeling and lets you show off lighting fixtures or block a less appealing view.

Cleaning and repairing existing window coverings is the basic step that should be taken to prepare a home for sale, but if you really want to get the most out of your home staging, replacing and upgrading to an attractive new and more effective window covering could be a more rewarding move.

Energy Efficiency:
Any improvement in home energy efficiency or “green” living is very attractive right now to help cut utility bills and change towards environmentally conscious living. You can impress both frugal and conservationist groups by adding cellular shades, which use their unique insulating honeycomb design to control heat exchange and reduce energy usage. Choose double celled shades and install closely to window glass with side tracks for a tight seal to obtain maximum energy savings.

Child Safety:
Ensuring that the window treatments you install are safe for children is more than a lure for families and expecting parents, it’s a responsible decision to ensure any children visiting the home you sell will be safe. It’s very simple to check and modify existing window treatments to reduce the risk of small children getting strangled in cords. It makes an even stronger impression to have cordless window coverings installed. Switching to motorized shades will also eliminate the need for dangerous cords.

Motorization:
Another attractive home upgrade, though requiring more investment and time for installation is switching manual window coverings to a motorized and remote controlled shade system. This can be combined with a full home automation solution or integrated with one later and installed as a stand alone component. The benefits of ease and convenience are great, especially when controlling multiple or large hard to reach windows. These electric window treatments can be operated by remote control or wireless wall panel in low and high voltage configurations. This sort of luxury home improvement should be considered if you’re selling or renting in a very competitive market and you’re willing to invest more into the value of your home.

Any of these upgrades will help your home stand out with a more impressive image. Since you can’t know what individual tastes in style will be, it’s always safer to let the features show off and not get too flashy with color choices or patterns. Use more subtle and neutral colors that are more widely accepted. This will make it a less expensive addition, too, and if a buyer wishes to change to a more stylish fabric, they can always do this later. The important thing is to highlight the distinct advantages of your home’s windows treatments, and demonstrate the care and attention to your home’s details. This will increase any homebuyer’s interest and confidence in your home’s quality and value."