Timestamps:
1:11 | Ensuring a Profit
5:24 | Too Much DIY
6:54 | Pushing Through
10:17 | Putting Theory into Practice
17:12 | Help to Find Success
18:51 | Controversial Advice
20:30 | Looking to the Future

Resources and Links:

[14:08] People talk about renovating and they talk about property investing like it's a pain or a pest or there can be troublesome days. Yeah, there can but there can be troublesome days at work working for a boss you hate. There can be troublesome days everywhere and under all circumstances and I just see the opportunity and property it excites me.

 

This is Property Investory where we talk to successful property investors to find out more about their stories, mindset and strategies.

 

I’m Tyrone Shum and in this episode, we’re back with the director of Renovate and Real Estate, Belinda Smith. She will share her top tips for renovations, including her strategies on how to make a profit. As well as this, Smith will delve into both the mental and physical challenges of DIY and she will explain some controversial advice.

 

 

In our last conversation with Smith, we learned about the depth of her passion for renovations. Now, let’s break down her steps to ensuring a profit.

[2:44] I think that people aren't serious enough about renovating and I always just, I treat it like a business. Like I make sure [that] I do take notice of the numbers and when I'm looking for a property for whether it's for myself to live in or an investment property for me or I'm helping somebody else look for a property, I always just think of the numbers, I pull the emotion out of it and I get really serious. It sounds, even when I'm styling a property to sell, I'll just think okay every ounce of effort I put into this property is going to be worth it for me because I'm going to get substantially more for the property if I present it at its best. So, I treat it as a business. I'm not just like fluffing cushions because I like the colour.

 

[3:26] So, that's number one. Number two, I'm always looking for opportunity beyond just a straight renovation flip or I just think, okay, is there a possibility to subdivide? Can we possibly put a granny flat on something? It's just looking for opportunity beyond just buying a property. I like to keep moving. I think that even looking back I said to you, I had a couple of quiet years where I had some very lazy equity and should have been doing more. But I guess I had kids playing sport, state sport, you know, family, family, family. So, I had a bit of that going on. But yeah, keeping up the momentum.

 

[4:04] I think that everyone needs to understand that styling is so important and presenting a property at its best and that renovating is different now the bars been lifted. And that a boring bland cookie cutter, no heart style renovation just because you [are] replacing old with new doesn't necessarily result in a property where buyers are going to fight for it. So, I think we can do a little bit better than that nowadays and I think the market expects it — both buyers and people are renting.

 

[4:33] So, I think that really taking it up a notch matters and I think that being able to do it again and having a really good team around you of somewhere where you can learn exactly what to do but even beyond that, having a really good trade team makes it easier to go and repeat it. Once you've done one, the first ones the hardest like anything we do in life and then they get easier after that. So, being able to repeat the process, it becomes easy. It becomes easier.

 

Some major costs of renovations include the price of materials and hiring tradespeople. Smith shares her tips to keep costs to a minimum.

 

[5:41] Definitely allow more time now to get a renovation done because you just won't have trades at your fingertips depending on your location in Australia, for sure. But definitely allow a little bit more time. Therefore, a few more repayments to the bank, if you're taking out finance to do that renovation. And yeah, definitely allow time for a product to arrive or be prepared to go to your plan B product.

 

[6:08] Not be so fussy about having that one particular vanity or oh my god, if I don't get those taps, I'm going to die. You know, all of that kind of attitude, you just gotta move straight to your plan B because your buyers don't notice. They don't know. They never really know what you had in your head. They just see what they're presented with and they won't know that your vanity, which looks nice, was your plan B [and] was your second choice.

 

[6:31] So, being a little bit more flexible and this will pass. These times will pass. I mean, I've done property investing and renovation back in the day where the interest rates were 17.7%. So, that passed. Everything passes. It was easy to buy, we could put in low offers, we'd have low offers on multiple properties and then just pick the one that we wanted to in the end. We could get all of our conditions met.

 

[6:56] That passed and now buyers are still fighting for property and it's just starting to come off a little bit now but who knows where that will go. So, all of these things are temporary and we just have to ebb and flow and understand that it's part of the game without getting too tangled up and stressed about it all.

Although it can be expensive, sometimes hiring tradespeople is necessary when renovating. This is something that Smith saw when her father was renovating but it hasn’t held her back.

 

[14:49] Dad actually bought a house, it was in the 70s because I was little. God, it makes me sound old. And dad DIY renovated this old house about two suburbs away from where we lived. And mom and dad, we were just over there weekend after weekend I can remember. Now that was a case of doing too much DIY.

 

[16:12] Dad did everything himself. The tiling, replaced kitchens, carpet, the whole lot. But I remember he flipped that house and made some significant income and that was a really good thing for them. Like I saw it and I was over there and just became very real that it was something that I could do and that my handy willing, new man in my life, put down his surfboard for a little while and came and joined me on the tools and we were just really suited for it.

 

[16:42] But yeah, dad and mum, mum still at 84 has just came, she came home the other day with a whole bunch of new tiles for her bathroom. So, she's doing a renovation on a bathroom herself, no drama. She's organised the tilers and the plumbers and she's already chosen the tiles and gorgeous stuff by the way. Stuff that a 25 year old would choose or any family would be happy to have in their home. So, it's just in my blood. It's in my blood.

 

The process of DIY can pose both mental and physical challenges but for Smith, the rewards are worth the efforts.

 

[17:55] The reason why I like flipping a home is because you do go through periods where you just think I'm tired — I'm physically tired, I'm mentally tired. The beauty of styling a property and walking through it and just breathing it in — like breathing in what you were able to create, really enjoying the space, being really proud of what you've put together, looking at the styling and the hunt for shopping. I enjoy all that kind of stuff to you know, hunting for a bargain to put it all together. I think that means that the challenges seem to be more worthwhile, it makes it worthwhile.

 

[18:32] They're the rewards and those rewards come before the financial rewards. So, yeah, the challenges are just being tired and I find it really interesting when I speak to people and they say, oh, I've got kids so I couldn't possibly do a renovation. And I think well hang on a minute, I did night shift [and] so did my husband. We had three kids, we were back and forth to New Zealand, we were back and forth up the coast of these country towns to do our renos or just even search for property and look and get on the ground. Like we were busy and it was tiring but it's also very, very rewarding and I don't know what else can produce equity and income.

 

[19:11] Like if we had have just gone to work and every day and come home, we would have had nothing more than our own home right now, my husband and I. On my wage and his. It's only property that enables me to live in little richie rich street that I live in at the moment. It's only property and it's only by getting something old and adding value to it or building something new and holding it or selling something and doing something better with that money.

 

[19:37] It's always like, what's the best and highest use of what I've got sitting around? If a property is not performing, I really look at it and go okay, should I hold on to it? Or is it time for this one to go and can I inject those funds into something that will perform? So, all of that. I don't, I'm not one of these buy and never never sell. I think that if something's not working for you and your money can make you more money if it's tipped into something else, then have a crack.

When facing the challenges of renovation, Smith thinks that you just have to push through.

 

[20:34] When people talk to me about, you know, will I be able to do it? It's exhausting. I go, no we don't call it exhausting, we don't call it hard work, we call it periods of discomfort. You'll suffer periods of discomfort.

 

[20:53] Push through and that's the truth. You know, people can push through, they're capable of far more than they think they are. And they think of things so that they add up like a big mountain to climb. They really worry about things and they feel like there's this big mountain to climb. And I just like to break things into chunk.

 

[21:13] You look at the mountain, you assess the mountain and then you forget about the mountain and you chunk things down and just bite off chunks at a time. And until you're through it and by the time you've climbed the mountain, you're at the top. You are tired, then you get to do whatever you like or nothing for a little while.

 

 

Smith has generously shared some great tips about renovation with us now, so let’s hear how she puts them into practice.

 

[7:33] We bought this old house and we bought it a few years ago and we've just been sitting in it unrenovated. Another good point — I never renovate until I'm ready to sell. So, it's really current when it hits the market. But looking for opportunities, this is a great big old 70s match and it's worth about $3,700,000 right now.

 

[7:55] I'm going to cut it down the middle and I say I'm — me [and] my husband we are cutting it down the middle with a firewall. It already has two sets of stairs, what a blessing. One half is going to be townhouse one, one half is going to be townhouse two. So, it's going to cost us just over $1,000,000 to do the renovation it and I will DIY the second part because we can take our time in that. We will shuffle down one end and stay there.

 

[8:23] So, we'll do the other part. We want that done quite quickly. So, that's when we'll get all the tradies in just to do that to get it back on the market to rent. It should rent it around about $2,300 per week, which will be a nice income for us and then we can just take our time and do the second part depending on how it all goes.

 

[8:42] So, the value increase we will make probably $1,000,000 in profit from that renovation. But you know it's all relative. If you're down in $300,000 market, that's fine but you're not going to make $1,000,000 off a $300,000 property. So, it's all relative. Yeah, this I'm busting to get started with this one.

 

It sounds like Smith has taken on a huge and exciting project. But, how did she come up with the idea to split the house in half?

 

[9:26] It was, look honestly it was a property brought to me off market. I saw that no matter what, I just, I came home to my husband, he was at work and I said we're buying this house no matter what we do with it, we're going to make some money and we're going to enjoy living in the location. It's a beautiful street.

 

[9:41] So, I just thought I'm just gonna grab this one and figure out what to do second, knowing that it was so well built and had so much potential. It wasn't until I was in it living in it that I really had a concept of how huge it was. It's a huge house. And then my dad said to me, if you put that house, I talked about on the waterfront at Kornell that we built back in the 80s, late 80s. He said your house, the one you’re in, is two of those. And that was a four bedroom, two living, substantial house. And he said this shell is two of those, why don't you split it in half? I said you're a genius dad.

 

[10:25] So, yeah, it was after I was cleaning all day one day thinking, oh, I don't want to clean this house all the time, It's huge — I had a concept of how big it was and then we started to think about what we could do with the internal space. Which will save us a lot of money on the renovation because the roofs there, the slabs there, the floors there. We're just reconfiguring rooms and bringing it all back.

 

Smith couldn’t resist investing into this house because the build of it was exceptional.

 

[10:56] The block of land is 1000 square metres. The area of the house — I knew you were going to ask me that — 50 I don't know 54 squares or something like that. It's big. Picture a 70s house with the ceilings are 3.4 metres downstairs in one section, the lounge room upstairs is seven metres by 10. Like it's just empty, big empty space. Triple brick on the outside, double brick, some walls internally are double brick, others are single. But everything's if there's ever an explosion come to my place Tyrone. We're just not going to get blown up here. We'll be down in the basement. I'll take the coffee machine down there and we will last for ages.

 

[12:01] Okay, so when I was walking through it with a real estate agent, there's arches everywhere. So, we're thinking real Mediterranean 70s. That's what we're dealing with here. I just thought, my husband came through and he just, I could see his excitement. He's a wall tapper. So, he's tapping the walls to see how solid everything is. He was so excited. This was so well built, not a crack.

 

[12:25] So, we were buying that house. That's what, it's one of the first ones that I've ever proceeded with without doing a really detailed feasibility study because we just knew the condition of the house, if this hit the market, I'm pretty sure it would have gone for a couple of $100,000 more. So, we just jumped on it off market. Well, when it was brought to us.

 

Smith purchased this house in 2013 when it was worth $1,535,000…

 

[12:51] There's been a lot of natural growth to take it to $3,700,000 and all we did was we just painted it and put some new carpet in here and freshen it up a bit [and] didn't worry too much about it. I'm okay with living in an unrenovated house and so are the kids and yeah, so when we do it, we'll do it to rent out and yeah, we'll be in this one for a while.

 

 

Coming up after the break, Belinda Smith will share the resources that she used for her own property journey…

 

[25:04] It was a changing point really when I heard Robert Kiyosaki.

 

She explains some controversial advice…

 

[27:03] I actually think don't stick to one strategy.

 

We’ll learn what she’s planning for the future…

 

[29:57] Well, not retiring because that's boring.

And that’s next. I’m Tyrone Shum and you’re listening to Property Investory.

 

 

 

 

We’ve heard about the success of Smith’s journey. Now, let’s take a look at what resources she used to help achieve this success.

 

[25:04] It was a changing point really when I heard Robert Kiyosaki because I'm like, I saw mum do what they did. I knew what I wanted in life. We'd already done a couple of renovations at that point and then I thought put your foot on the accelerator, sweetheart. That was a moment.

 

[25:20] So, I read so many books. I went to free seminars and then we started to pay for seminars back in the day.

 

[25:29] Probably the first couple, recursion was one of the first ones we went to. We learnt all about vendor financing. We also learnt loads about how to negotiate on property and how to buy and how to negotiate on real estate commissions. We just started to learn the tricks of the trade. Then we started to do things better. So, our results were better and our profit margins were more.

 

[25:50] Steve McKnight, Margaret Lomas and Jan Somers. Like they're the oldies but it's continued. And even now, I've just joined in another property development group. So, I just I love to learn. I feel like I'm just an average girl but I think I'm bright but not smart if that makes sense.

 

[26:15] So, I don't know. How do I explain that. I just feel so average and ordinary but I try hard and I'm interested and I love it and I'm passionate. And I just want to keep growing and learning because staying still bores me. It actually frightens me. [It] frightens me to stay still and do nothing. My poor husband, God bless.

 

Smith loves to soak up as much information as possible, which leads us into some controversial advice that she’s been told…

 

[26:57] It's advice that some people say, you know, it's a bit controversial. I actually think don't stick to one strategy. I actually think that that's really been great for us. Renovation is one of our strategies but we also like buy and hold [and] I love commercial property because of the returns. I just think don't stick to one strategy. Don't limit yourself to one thing. Get good at stuff and then expand your repertoire.

 

Here’s some advice Smith would give herself 10 years ago.

 

[27:51] It's going to be okay. Don't worry so much. Don't hesitate. Just go flat out. I would have done probably more, a few more deals.

 

[28:10] I've seen how we've done with the deals that we have done and I've seen other people do really, really well, too. And you know what it's like. You wish you had that crystal ball. Well, I'm kind of looking back going, wow, I should have bought that property. Or, you know, we should have just moved ahead.

 

[28:27] There was one that came up the other day, a townhouse in Alexandria. My husband and I had the opportunity to buy it for $225,000 amongst others. But $225,000. It was a big renovation and he went, ah, God, have we got the energy for it? I went, oh, we'll be really stretched doing this. But it's one of those properties that would be worth $2,400,000 or something now. So, we've had plenty of those moments along the way and had I've had the crystal ball, yes sure, I would have moved faster at some of those moments and not done kind of one at a time. So, yeah.

 

Looking towards the opposite side of things, let’s hear what Smith is planning for the future.

 

[29:57] Well, not retiring because that's boring. Um, I'm more, I'm probably already at the point [or] I am at the point where we feel very secure financially, which is really nice. I will, I'm a having grandbaby in July. So, I'm going to be nan. Granny Smith, just like the Apple all the kids say all the time, you're gonna be Granny Smith. So, I'm excited about that and I think that I probably should wind it back just a little bit to spend a bit more time with family and mom and yeah. So, yeah, I'm just looking forward to life. Life is good.

[30:46] So, Belinda, you said [an] amazing story. You've achieved so much great success. How much of it is due to intelligence, hard work and skill? And how much of it do you think has been due to luck?

 

[30:57] I just, I think some of its luck about 10%. I think skill, I don't know whether I'm many more skill. I only use the tools that are available to me which are available to everyone. I've just got a big engine. I'll just go. Like, I'll just keep going and going and going and going. Whether I'm renovating, whether I'm doing my business now where I'm coaching students. Like whatever I'm doing, I just go. I just get stuff done bit by bit. Not in any great style or fashion. I don't think I'm very organised in particular, but I just keep going and going.

 

 

Thank you to Belinda Smith, our guest on this episode of Property Investory.