Skilled Migrant Professionals February 2015 | Page 24

Business Turning property renovation BUSINES M any people decide that they want to make money by renovating a property. As with any popular topic, there are countless tips and tricks related to this continually growing and evolving income stream. These tips are designed to give you a snapshot of the fundamentals related to renovating for profit and to help you make the best choices when embarking on the property renovation journey. Tip 1 - Education: Educating yourself about renovation is becoming easier and easier; there are books, DVDs, seminars, CDs, and websites that offer ready-made information. Even TV shows like Better Homes and Gardens give you helpful pointers. Talking to other people that have done this sort of thing before is recommended. Perhaps you can even find someone to mentor you through the process. Tip 2 - Build your team: Every renovator needs a team of people to help them through the process. People with these skills should make up the foundation of your team: a lawyer, an accountant, a building inspector, a real estate agent and the relevant tradespeople. With your lawyer and accountant, it is important to set up your tax/company structures before you begin. There is a lot to be said for maximising your potential profits and these two contributors can significantly impact those profits. It is important that you thoroughly interview the members of your team and make it clear that they are a part of a team – whether you do one project per year or five. It is also worthwhile to incentivise them with additional compensation for ontime or exceptional service. Imagine how much better the service might be from a real estate agent if you offered them a 5% commission for making a sale in less than two months, but only 2.5% if it took them over two months. Essentially, the theory is that it is better to reward the people in your team than pay much higher bank interest rates for bridging funds for projects that overrun. Tip 3 - Have a tight budget: Determine exactly what you can afford and allow yourself 10% of your total costs for contingencies This will cover you in the case of price rises, having to change suppliers and other unforeseen factors that may lead to an increase in costs. When determining your budget, you should also consider 24 www.smpmagazine.co K