Three smart renovators reveal their trade secrets:
The landlord-turned-reseller
Richard Mills has renovated a number of Auckland properties in his time, and speed is the key to success. “I aim for projects that don’t require building consent as that can eat up valuable time and makes the renovation more expensive,” he says.
“I’ve been caught out not realising that joinery has a five-week lead time, so now I’ll be thinking about that as I put in an offer.”
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Mills says that paint, landscaping, fittings and fixtures and staging probably offer the best value for money. If the property has a bathroom and kitchen in OK condition, he just tidies it up with some upgrades like a new bench top, splashback, and handles.
“I try to avoid properties that have unseen expenses, as in needing new wiring and plumbing, or a new roof, because buyers don’t see those things.”
He says he’s big on aesthetics and creates homes that are contemporary, but doesn’t always follow current fashions, because they tend to be expensive. However, if he sees something he really likes, he’ll make an exception. “I thought I had over-capitalised on my last project and I didn’t think I would make much money at all. But I had four offers the day after the first open home and sold it for top dollar the next day.”
Mills’ previous property sales benefited from market movements and capital gains, but changes in the the market have forced him to alter his strategy.
“Even a small dip in confidence for a month or two, when I need to sell, could destroy my profits. So for me at the moment it’s about maintaining.
Any business lowers profit forecasts through tough times so they can keep operating until the economy shifts,” he says.
The new(ish) kids on the block
The winners of The Block 2013, Caleb and Alice Pearson, went on to turn their passion for building and design into a thriving business, Pearson + Projects.
While they’ve bought and sold a number of properties since their television days, they’ve just finished what Caleb describes as their first “official flip” - a 100-year-old mudbrick house in Alexandra, 90 kilometres from Queenstown, which they bought for $365,000 and sold for a $40,000 gain after $40,000 in renovation costs.
“There’s a lot of thought that goes into each of our projects,” says Caleb. “Location is a primary consideration every time and we always aim to buy low. We think about who lives in this area, what kind of property they’d be looking for and we analyse what might work in terms of renovating.
“A family home should have at least three bedrooms and two bathrooms and we also need to look at whether the property is practical, in terms of warmth and comfort.”
He says that he and his wife are lucky that they can do a great deal of the work themselves and they’ve assembled a good team of tradespeople. “In a small town like this, reputations matter, so they tend to do a very good job,” he says.
The couple’s big tip is: avoid renovations that need council consent.
They budget spending $30,000-$40,000 per house, breaking it into three lists: the obvious (fixing broken windows, rot, and leaks); the standard (bringing the house up to the standard of similar properties); the extra (upgrades that will enhance the property, but aren’t necessary).
Alice says she tries not to apply her own taste to every room. “In the mudbrick home we put in a farmhouse kitchen, which is attractive and in keeping with the age of the house, but is not something I would choose for myself.”
The experienced trader
Anita Walker, from Auckland, has traded 13 homes since 2017, each of which she’s brought back to life for gains that have allowed her to leave her old job and renovate full time.
“Let’s just say that I’m making a great deal more than in my previous profession. But although it might seem that we’re making huge profits on our trades, there are expenses incurred and we pay tax on our profits, just like any other business,” she says.
“I always add outdoor living spaces where there are none, because that’s an important part of Kiwi life and people definitely look for it.
“I don’t follow fashions in design as such, because you want to create a pleasant, neutral space where buyers can imagine themselves living there. The fashion part is really the staging, and the company we use is very good at it.”
She says that neighbours of tired homes she’s worked on love seeing them being renovated.
HOW TO RENOVATE TO SELL
Here are our experts’ top tips:
1 Finding a bargain is the best strategy An under-valued property means profit potential.
2 Every day counts — and extra finance costs can kill gains. Once the sale has gone unconditional, ask to get into the house before settlement, to scope out every detail of what needs doing. That way you can programme the works, order materials and have sub-contractors ready to start.
3 Focus on the easiest wins first - paint, landscaping, fittings and fixtures and, when you come to sell, staging. If the kitchen and bathroom are tired, but otherwise okay, upgrade things like benches, taps and handles.
4 Allocate the budget to essentials. Get the house sound first, before splashing out on eye-catching details. If there are too many hidden jobs (fixing electricals, plumbing or piles), walk away. You’ll be spending money on stuff buyers don’t see.
5 Think what the market wants. Three beds, two baths for a family, maybe two beds for a rental landlord, and so on. Look hard at floor plans to find ways to carve off another bedroom.
6 Pay attention to the exterior, and look what you can do to create off-street parking.
