In a day and age where many of us would like that get-rich-quick scheme, many still wonder about the prospect of a bargain buy, quick renovation and on-selling at a tidy profit. But in a market of high house prices, interest rate rises and LVR restrictions, how realistic is it really? (More information on gaining finance for renovations.)
Anyos Gonczy believes it is possible and has been dealing in property for the best part of 12 years specialising in do-ups and quick on-sells. Like any other business, he says, much depends on being thorough when doing the ground work.
“You need to have your own strategy just as with shares or any other type of investment. This type of property investment, you have got to pick a niche in the market and once this is identified, it’s hugely important that you really get to know it very well.”
The 32-year-old who owns a property management company, Inspire Property Management, relies on a well-honed instinct and says the key considerations for him are the purchase price, understanding what needs to be done and the cost of doing that.
“I can’t emphasise the price enough,” he said. “The purchase price is more important than whether its brick, got a bad paint job outside, or it is a dump. It doesn’t matter, providing you do your research to ensure you are not paying too much and that what you’re factoring in to renovate is good.”
Anyos usually looks for houses that are road front, with as much land as possible and something that would appeal to future first home buyers.
One rule he sticks by is never purchasing a property unless he can afford to hold onto it.
“That is very important to me, because if you have to sell the house because you’re too stretched financially, you shouldn’t be doing it.”
Once purchased, Anyos’ team of contractors go to work and it’s about speed and efficiency.
“I look at each specific house and figure out how I can get it into a shape where I’d be prepared to show people through. I tend to always do stuff that will protect the integrity of what’s there, and then work back in order of priority.
“In a real in-and-out job with new carpet, interior paint, kitchen, bathroom, I can renovate a standard 3-bedroom 90-100sqm home for around $30,000 - $35,000. This will increase the value of the property but by how much comes back to what you originally paid for the property.
“Markets are always changing and you have to look at what’s happening in the wider economy and spend that renovation money wisely.
“It’s a good way to build equity providing it’s done in a well thought out manner.”