Top Tips

Renovation Rescue – Day 10

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After a week and a half of going hard at this renovation, I’m really starting to feel for the contestants on The Block. Two weeks of this full-time is going to be pretty exhausting, eight weeks must be crazy but I’m sure I’d be finding it easier if I was being followed around by TV cameras every day. After having a few wet and cold days last week today it was almost 30 degrees so although the other extreme it was a great day to get a heap of things done. Fortunately for me the partner of one of the owners in this block of units is a plasterer, so calling in a favor I was able to get him to really tidy up a lot of the damaged plaster throughout the house as well as cover the brickwork in the kitchen. A lot of these style of units have exposed brickwork and although a hit in the 70’s now it’s not so much of a feature. I decided to go halfway and cover the kitchen brickwork and leave the lounge. It also helps to brighten up the kitchen and make it feel like a truly separate space. Unfortunately the plasterer won’t be back until Friday morning to sand it all down (and there’s a surprising amount to do) so that will delay the rest of my painting by a day but it won’t be a big issue as there are plenty of other jobs for tomorrow.

Whilst the plasterer was inside it put a hold on any work in there so I got back into the front garden. Some advice to gardeners of the 70’s – please don’t cover your garden beds in black plastic sheeting to try and keep the weeds down, it doesn’t work and it’s a nightmare to pull up 40 years later. Moaning over, I dug up the garden bed, made an edging out of the many volcanic rocks that I dug up and started planting out more of my long suffering agapanthus. I got half done before the combination of heat, the plasterer finishing up as well as it being lunchtime and I threw in the garden shovel for the day.

After lunch it was time to start hanging up some curtains that were purchased last week, these were for the bedroom and the lounge area (a venetian blind for the kitchen arrived by courier today but that will go up later). Coupled with a few sturdy but inexpensive curtain rods from Ikea they didn’t take too long to go up. One thing I must say though is although the Ikea rods are great their curtain rings are terrible. They do the job but in a not-quite-right and quirky Ikea way. I was eager to get these up so that the creases have a chance to start falling out of them. They are a touch too long but the rods can be raised up so that they will sit correctly.

Finally today it was time to do something special in the kitchen in order to prep it for my next fun activity that I’ve been busting to do for ages. As you’ll see by the photos it looks like I might be concerned that the oven had a case of ebola, don’t fret though, the oven is perfectly fine (if in need of a good clean). Stay tuned tomorrow to see one of the most fun activities that I’ve been up to so far!

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Renovation Rescue – Day 9

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Today really felt like a major turning point in the renovation. In what is quite a small property it seems that there are hundreds of tiny jobs to do all the time and you get to the end of the day and think what have I achieved? Even though you’ve been flat out since 8am you look back and think, well I spent 3 hours washing down walls or 2 hours digging up old roots out of the front garden…not exactly something to write home about. So after the success of the vinyl installation yesterday I was very excited to be finishing off the floors with the carpet being installed for the lounge and bedroom. I have been looking forward to a big ticket item and this was just the one! Yesterday the vinyl installer arrived right on 8am so I was there ready to go at the same time today. 8am…9am…10am…11am…and then a phone call. Wavering between glass half full and half empty as I sometimes do I was expecting a no-show but fortunately they were just confirming the address and would be there in 5 minutes. As promised they soon arrived and got straight to work.

Having already removed the carpets and underlay was a huge time saver and after a brief inspection (and confirming the carpet was the one I selected) things progressed really quickly. The carpet underlay was amazingly put down in less than 10 minutes. Rolled out, cut to size and stapled down in no time. My glass had suddenly turned to more than half full! The rolls of carpet were soon in and the two guys had it down in just over an hour, they even trimmed up a nice section to finish off the base of the bedroom wardrobe. I couldn’t be happier with the end result and it has made an enormous transformation to the place. I’m really starting to see what the end result is going to look like now.

The other interesting achievement today was something that ‘the foreman’ had been thinking about for a few days. There is a cupboard in the lounge that has 4 shelves in it and on the top shelf gracefully sits the old hot water heater. Now I have no idea how it would have been put in there in the first place but even less of an idea how we could ever get it out (without some sort of helicopter and cable setup) so we needed to cover it whilst still allowing the cupboard door to close. Along comes the foreman with a tailor made piece of plywood with two holes with string through them. Liquid nails goes around the outside and it’s inserted into the cupboard, pulled tight and fastened to a nail either side (see the pictures for this to make sense). Once the liquid nails has dried the string is cut and the holes filled. The end result once painted is a neatly covered up old hot water service that no one will need to ever know about! Very impressed.

Tomorrow I’m going to be in the mood to get plastered!   

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Renovation Rescue – Day 8

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Now that things are on the home stretch and I have a maximum of 6 days left before I have to go back to the delights of my full time job, I’m starting to get a bit nervous about the amount of stuff I have left to do. Probably not so much that there is a lot, more so that what is remaining is fairly time consuming and not necessarily things that I have done before. Whilst I feel pretty confident with a paintbrush, screwdriver or garden shovel in my hand this week will test my skills with some fun activities planned for the remainder of the kitchen and bathroom!

Today though saw two exciting things happen in the property. First was the removal of the hideous brown veneer bench extension that sat between the kitchen and the lounge and secondly, the first of the new floor coverings was delivered and installed…a momentous occasion! From the day I saw the pictures of this place for sale on the internet I immediately disliked the bench extension. Not only was it dated, it looked out of place with the rest of the kitchen being both a different colour and a different height to the other benches (it felt like more of a breakfast table). The other thing was that I felt it made the place feel smaller (it’s small enough as it is) and anything to make it feel larger and more spacious I think is a good thing. So out it came in about 5 minutes. I was so thrilled once it was gone and you can see from the photos below that it instantly made a great difference in the space.

A quick clean of the floor (which was soon rendered pointless anyhow) and Errol the vinyl installer arrived ready to go. Initially it was discussed that when installing the vinyl they would simply go over the top of the old stuff but upon further inspection it was decided that it should go. Most of it was loose-layed anyhow so it was removed pretty easily. The preparation seemed to take the longest amount of time here and Errol was pretty busy for a good hour or two making sure the surface was prepped and ready to lay the new vinyl. The selection of the vinyl is something that I don’t think I’ll be certain about until I see the place completed at the end of this week. Initially I was eager to go for a wood look but was convinced otherwise by the flooring supplier to go for something that would not as clearly show any damage over the years, this design I was told is easier to repair if you have to and not be noticed rather than something with a distinct pattern in it. I took the advice and whilst I’m 90% happy with the end result I’m keeping the other 10% up my sleeve until the end of this week. The great thing was that there was also a lot of large off-cuts so I’ll be putting them to use later in the week. I’ve got to admit though, it mad a HUGE difference in the kitchen and once I paint around the kick-boards under the cupboards that’s pretty much all of the hideous brown skirting gone…hooray!

Tomorrow will be the last day we need to look at the stained floorboards.

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Renovation Rescue – Day 7

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It’s finally the half way point!

After one busy week I’m really pleased with the progress that has been made and the renovation is pretty much going to plan and is on schedule. Considering that it’s been 7 full days of 8am starts and 5pm finishes (just like being at work really) I thought that to keep myself motivated and to top up my energy I needed to take a short break. Finishing up early at 3pm yesterday I got in the car and headed back to Melbourne for a night in my own bed and a glass or two of wine. Waking up refreshed it was a good opportunity to do some shopping in the big smoke prior to heading back to the property so off I went to Ikea. After and hour or two out I walked with armfuls of purchases including curtain rods, roller blinds, towel rails and some other great (and inexpensive) bits and pieces. The other thing I did prior to heading back to the reno was to raid our garden at home in preparation for planting out the gardens beds at the property.

It’s great to have a well maintained garden but in a rental property you have to be fortunate to get a tenant that is eager to look after a garden, so if you can include greenery but also low maintenance then it’s win-win. We have a garden full of agapanthus at our home that I was eager to get rid of and they were still very healthy…problem solved. These would be perfect to split up and plant out in the garden beds at the property. They’ll fill out the garden beds, keep the weeds down, survive dry environments and require minimal care. Within a short time not only did I have my Ikea purchases but also a car full of plants and along the freeway I went back to the property!

Although it was only a short break away I felt refreshed and was eager to get back to the work. Once back it was time to dig up the smaller of the garden beds and get some of the plants in. Instantly the outside of the place looked much better. Although wilted at the moment, I’m sure the plants will take off after a good drink of water and fill out well. I can’t wait to also plant out the larger garden bed (maybe in a few days time). As you’ll see in the pictures I also installed some sheer blinds in the new veranda window, thanks Ikea, they are just what I was after! 

Tomorrow I’ll be removing something from the property that I’ve hated from day one…

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Renovation Rescue – Day 6

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Day 6 of the renovation was shaping up to be a big one from the beginning. I overlooked mentioning yesterday that I decided to put the carpet up for sale online and actually had a bite. Unfortunately I had only pulled up the carpet in the bedroom so still had the lounge carpet to tear up. As an interlude before I continue, it reminded me of this video…

https://www.youtube.com/watch?v=UJGksvSzXzs

At 8:30 am I had a call from the purchaser and I still hadn’t torn it up so within about 3 minutes it was pulled up, rolled up and out the front of the house just as the man was walking down the driveway…phew! $20 and 10 minutes later he was driving off with a truck full of 30 year old carpet, there’s obviously a buyer for everything out there.

Today’s other major activity was to have the front windows on the veranda replaced. Although a somewhat unusual arrangement (and probably not original) this glassed in area creates a nice entrance to the house and somewhat of a small sun room at the front. It’s also consistent with all of the other units in the block. Unfortunately although the glass was ok the frame had seen better days and was ready to fall out (check out the photos to see how bad it was). A new window had been measured and ordered a few weeks prior so it was timed to be installed whilst all of the works were being completed. Fortunately the installers were right into it and in no time the old window was out. I gave them a hand to put the new window in (like I know what I’m doing) and they finished it off nicely with some neat flashing around the framework. Whilst I was initially unsure about having this replaced (I thought we’d just get rid of it completely) I’m glad that we did as it looks really good and gives the impression of an additional space attached to the unit. It’s also good as the winters here get pretty cold. I still have a few finishing touches to do here which I’ll complete over the next week and will finish it off nicely.

Finally, it was a really pleasant surprise to get a visit from my long-time friend Ryan who is a much more accomplished renovator than I am (check out he’s work here…yes, I’ve pinched his blogging idea). I greatly appreciated his encouragement and I cannot wait for him to see the finished product next week. The picture of us below shows us highlighting the mystery stains all over the internal brick wall…we have some theories but it may forever remain a mystery.

Tomorrow it’s time to finally put my green thumb to work!

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12 low-cost security ideas for your investment property

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Tip 4 – Get Intimate With Money

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769867-australian-moneyOne of the great things about starting the journey of property investing is that you don’t necessarily need to be on an enormous pay packet to do it. Many people assume that to invest in property you need to have a lot of money to start off with. I’m sure that many of us know of people who are making big bucks in their jobs but are still struggling come the end of the month to pay the bills and are sometimes heard saying ‘If only I had more money/got a pay rise/won the lotto’ etc… One of the key things to realise when considering investing is that it’s not how much money you have it’s how you manage the money that you do have that matters. Look at the examples that we hear about of people that do win the lotto. There are numerous unfortunate stories of people winning millions of dollars but just a few short years later they have gone through the lot and have nothing to show for it. Just simply having money doesn’t equal knowing what to do with it. Learning how to manage money (and not just in relation to property investing) is one of the key skills that I’d suggest is essential before embarking on any property investments.

For a lot of people talking about money is simply not something that is done. It could be for many reasons be it cultural, historical or just something ‘not done in our household’. For some people discussing money might be seen as rude or obnoxious (and I’m sure in some cases it is) but think about the reasons why it’s worth discussing. I’ve read comments by several authors on personal finance regarding the lack of money management that is taught in schools. Maths, science and english are staples in many a school curriculum but what about finances, budgeting and investment? For many adults we need to either choose to learn about these things or (as unfortunately many people do) cross our fingers and hope that the lotto win comes though. Whilst I still get the occasional lotto ticket I’m not relying on the one in several million odds to get me to where I want to be. The choice to learn about managing your own money should be a simple one (and I hope for you it is) but unfortunately for a lot of people it still falls into the too-hard basket. If you’re still reading, let’s assume that it is something that you are keen to learn more about. Remember, there is a big difference between someone talking (and learning) about how to manage money in order to do it well versus someone simply talking about how much money they have!

saving-money-piggy-bankWhilst the title of this post is about becoming ‘intimate’ with money, what I mean by that is that it’s important to know as much as you can about your own finances and to learn to manage them rather than sit back and hope for the best. This isn’t about learning how to become a millionaire, it’s about knowing what you have, what you are doing with it and how you can start to make it work for you…hopefully the millionaire part comes later! For many people this step can be challenging, particularly if money is not something that you are used to discussing or learning about. For some, simply getting over the mental hurdle of ‘but I don’t earn enough to have to worry about it’ is the first step. My thought is that whether you’re a 10 year old putting pocket money in a piggy bank or an executive on a 6 figure salary you can always learn something new when it comes to managing your money. It’s also an ongoing process that you need to commit to as the way you manage your finances changes as you go through life.  One thing that I’ve found (and I can feel eyebrows being raised in skepticism now) is that as you get better at it you will start to see the benefits of managing your money and it can change from what may have felt like a chore into something that can be enjoyable…you’ll have to trust me on that.

I have learnt a lot about managing money over many years but I’m the first to say that I still have plenty to learn. Let me finish this post with a few of the most important financial management lessons that I learnt that have really stood out to me.

  • Start learning to save. This seems like a simple lesson to learn but it’s one of the hardest to start putting into practice. Whatever pay packet you receive there is always scope to start saving but in a world where we all want the newest  things yesterday holding onto that money can be difficult. This link to the Moneysmart website will provide some useful tips as well as a nifty savings goal calculator.
  • The difference between good and bad debt. This is an important lesson when it comes to investing in property as debt is a key part of it. The difference between the two is significant though. Basically, one is debt for an asset that goes up in value and one is dept for an asset that loses value. Think a house vs. a new car. See what Oprah has to say about it here, although I don’t think she needs to worry too much about money…
  • Beware of credit cards. We all have one (or several) and they are a part of life but its amazing how credit card debt can have a huge influence on an individua’ls personal finance. Learning to live and manage credit cards is crucial for everyone with some plastic in their wallet. Check out this credit card calculator and see how long it takes to pay it off. The example below could apply to a lot of peole.

http://youtu.be/_OXu-Ew48jY

There are innumerable financial lessons to learn when it comes to managing your own money. If you’ve got some that you found beneficial share them below!

Tip 3 – What do you want to achieve?

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thinkingWhen considering investing in property it’s essential to think carefully about why you are doing it and why you are choosing to invest in property over any other options. There is a lot of media coverage in many countries about the process and benefits of property investing and it’s certainly encouraging to a lot of people, however there are many questions that you should be asking yourself before heading down that path. One of the things I talk to people a lot about is to be ‘cautiously receptive’ of other people’s advice (including mine as well) and when you start telling people that you are thinking about buying an investment property you’ll be surprised at how many people have an opinion on it and plenty of advice to go along with it.

Ultimately, you are the only one that can decide if it’s the right option for you and your circumstances and this requires every potential investor to hold up a mirror and ask themselves some questions. Here are a few prompts that I found (and still continue) to find useful when considering buying a property for investment.

  • What do I want to get out of investing in property? Am I approaching this as a long term investment that I’m happy to maintain for years to come, or am I dong this for some fast returns?
  • Am I aiming to establish a portfolio of properties or am I going to buy one property for investment? If I’m aiming for multiples, how do I do that?
  • Do I want my investments to eventually be my primary income? Am I aiming to have it as a ‘retirement fund’ or eventually extra spending money?
  • Will I be disappointed if it takes a long time for me to see some positive cash flow from my investment? What if it starts off losing money?
  • Examining my finances, am I in a position to invest in property…realistically? Have I been putting off investing because I think I may not be able to do it financially?
  • Do I want a ‘set and forget’ investment or am I prepared to put time and energy into my investments? I think this question is very important to be able to answer as property can end up being either of those things.
  • How much do I know about being a landlord and how much time am I prepared to put into the process of learning about it?
  • Am I realistic about how I would manage if something goes wrong? What about if my income drops, if my family circumstances change, if I need to pay for major repairs or if I have issues with a tenant?

These questions are just a starting point for things to think about and all before you have been to an open for inspection. Often the first thing people will do when thinking about property investment is to go looking at properties and quickly fall in love with their dream investment. My view is that this can often be the first mistake in a long line of potentially costly steps. Remember, this is an investment and you need to be clear about what you want to achieve before you find yourself signing a contract of sale! Yes, it’s not the exciting part but it is essential. Being clear about your goals through investment will be one of the best first steps you can take and will certainly help pave the way for a successful journey. Try not to be put off by it, sometimes it’s challenging to put the brakes on and ask yourself such questions and you also need to be prepared to deal with your answers. If you don’t like what the answers are then it means that you need to do some more work before you get out there buying a property. It’s entirely worth it though so persevere!

If you are starting to think about investing or already are, what are the questions that you would recommend? What have you found useful to consider? Add them below!

Tip 2 – Become a Student!

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learnOne of the things that you will find when you start investigating property investment is that there is a huge amount of information out there for you to digest. A lot of it is good and it’s great to know that there really are people willing to share their own knowledge to help you learn, alternatively there are also people willing to put out information that can unfortunately be misleading or are trying to make a quick dollar from the uninformed. The only way to know what to do is to learn it and frustratingly this takes patience. I’m a big believer that property investment is a journey and that it takes time, a lot of time. If you’re expecting to make big money quickly through buying and selling property for a profit then you’re heading more along the lines of property speculating rather than property investing. Some people may argue with me and that’s OK, I certainly won’t disagree that some people have made their fortunes out of speculating, but it’s not what this blog is about. This blog is about discussing the elements that you need to invest for the long term and to set yourself up for a prosperous future. The first step for most of us will be to accept that to do it we’ll need to ‘become a student’ again and go back to the books.

When I started out thinking about buying a property for investment I can freely admit that I knew absolutely nothing about what to do or how to go about it. Years later I’d like to think that I know a whole lot more and that this knowledge has put me in a much better position to manage and continue to improve my portfolio. That being said I’ve also come to understand that I will never know it all nor should I expect to. The property investor that thinks they know everything that there is to know is entering dangerous territory. So I guess you could say that the first lesson I learnt is that to do it well I needed to learn how to do it. If you are starting the journey then you’ll also need to figure out how to learn more about the ins and outs of investing. Being well informed is the best tool that you can have when starting out and you need to commit to developing this knowledge. As they say – A fool and his money are soon parted – becoming informed will make property investing an enjoyable and much less stressful pursuit and will hopefully help you avoid becoming the proverbial ‘fool’.

Once you start on your path to learning all about it you’ll quickly realise that there are huge amount of resources out there to digest and that it can be confusing. You’ll come across books, magazines, websites, blogs, conferences, seminars, clubs and organisations just to name a few. One of the ways I tend to approach all of this information is to sift it out by asking myself “What’s in it for the person giving me this advice?”. I started off by reading books, lots of books. Whilst some of the information was confusing and contradictory, I felt that for the most part, all the author of the book had to gain was the money from me buying the book. On the other hand, it takes a lot to get me to sign up for a seminar being run by a business spruiking the wonders of property investing. yes I’m cynical but I think a healthy dose of it in investing is a good thing. Also realise that you’ll be learning a new language. It took me a long time to start to understand the words and phrases used in property and I’m still learning. Try not to be put off by this however, it comes with time.

So if you’re just starting out, start out by becoming informed. Commit yourself to learning as much as you can and you’ll be giving yourself a great footing for a rewarding journey in property investing. If you are not willing to put in the time to learn about the ‘how to’ then I’d suggest that you might consider something else, as I’m sure that for every successful and well informed investor there are as many, if not more, that went into things uninformed and have come off second best. One useful place to start is to investigate the resources page where I’ll highlight some of the things that helped me start my journey. Whilst I found many of them useful you may not, keep looking and you’ll be sure to find the information that works for you.

Tip 1 – Speak to people!

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speaking

One of the reasons that I started this blog is because a lot of people have approached me over the years to talk about getting started in property investing. How do I do it? What steps do I take? Where on earth do I begin? When I purchased my first investment at the ripe old age of 23 I can’t recall anyone that I knew who was investing in property. I look back now and realise that I made my first purchase without really having any knowledge about real estate and certainly not about how to go about investing in it. I knew that I wanted to do it and had some idea in my mind about what I wanted the end product to be but no idea about the other 99% of things that went into getting to that point. What I have come to realise now though is that when you are thinking about starting out there are two key elements that you cannot get anywhere without – Information and Motivation.

Information is essential throughout the entire process of investing in property but particularly as you are starting out. The right information can set you out on an exciting path into the world of buying your own property and becoming a successful landlord and investor. Connecting with the right people, particularly those that have already done it (and done it well) can save you immeasurable time in learning how to get started. You will hear me talk in future posts about the benefits of learning through experience, I’ve done this and absolutely believe in the benefits of it…however…property can involve big bucks and it’s a major commitment for you, so why not learn from other’s experiences (and their mistakes). The other realisation I’ve had is that the people that have done it well also like to share their experience and knowledge with others. They are keen to talk about what works and share their knowledge about success with others. This valuable resource is also generally a person who is also humble enough to share their mistakes which is often the most valuable information you can get. Beware the advisor who doesn’t admit to ever making a mistake!

Motivation is the other critical factor to becoming successful when starting the journey as a property investor. I know it sounds incredibly simple but you have to want to do it. I would imagine that many investors would agree with me that the biggest hindrance to getting started (and becoming successful in the future) is developing and maintaining the motivation to actually do it. I refer to property investing as a journey for a very good reason, it simply does not happen overnight. It takes time, energy and commitment to get the process started and it requires you to maintain all of those traits to ensure that you do it well. So many of the people that I have spoken to have said how interested they are in investing in property but only a limited amount of them have gone ahead and done it. I’m hoping that it wasn’t the discussion they had with me that put them off (I’m always very passionate talking property investing) and I’m fairly sure it wasn’t. I’d confidently say that it usually comes back to motivation. As with all successful people, they know that it’s not always smooth sailing and that you actually need to put something in to a plan to get something good out of it. We live in a society where so much of our day-to-day life is instant, whether it’s instant information, instant rewards or instant coffee. If you want instant outcomes, then I’d suggest you think carefully about property investing. If you are motivated and prepared to start a journey to get to your goal knowing there will be a few ‘bumps in the road’ then read on!

A word from the wise – Whilst speaking with others is a great way to get useful information and also to develop and sustain motivation, it can also work against you if you are not careful. In my experience, for every supportive person that I spoke to when I was starting out there were another 10 that vigorously warned me about the pitfalls of investing and supported their concern largely with incorrect information. Don’t completely ignore advice (even if it seems negative) but also make sure that you check out the information for yourself. Whilst detractors can bring you down, supporters raise you up so make the most of them. I’ll talk more about this in some of the later tips.