Original Herald Sun article on 1 June 2015: Melbourne is experiencing a house bubble and reality tv is party to blame official warns
Simple Property Investment Comments
I agree that reality TV has had an impact on these two things:
- People get inspired to buy properties that are in need of considerable improvement. They feel that they can make a lot of money by ‘adding value’ to these properties.
- Those wishing to sell their property in a ‘good area’ expect a sale price in line with what it will be once the improvements are made – but the property requires considerable work.
I am not saying that you can’t make money doing this but I am saying you need experience and the right contacts. Reality TV makes it look easy but it certainly is not.
If you would like to make this your business or a serious ongoing side-business then be prepared for the first few projects to make a loss or at best break even.
There are a lot of skills involved, including:
- identifying a good project
- negotiating a purchase price that will give you a chance of making a profit after the renovations
- making the appropriate changes to the property
- coordinating trades.
The question you need to ask yourself is “Why am I doing this?”
If you are looking to make some quick money then trust me, don’t do it.
If you are looking to improve your financial position and don’t want all of the headaches – then explore ‘property investing’ rather than ‘property trading’. Most people will have a better end result with smart investing than being a part-time developer.
I’d love to hear from you if who’ve tried renovating to make money in a good area – but are now thinking that there has to be an easier way…