how to property investing guide - the property climb...the property market and the more likely that...

THE HOW TO PROPERTY INVESTING GUIDE

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Ellerslie. Auckland 2151

©2015 NZWM All Rights Reserved.

Notice

This publication and the accompanying materials are designed to provide educational information in regard to the subject matter covered in it. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional opinions. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Reproduction or translation of any part of the information contained herein, in any form or by any means, without the written permission of the owner is unlawful.


Copyright ©2015 NZWM All Rights Reserved

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CONTENTS PAGE Introduction 3 Time based and diary tips 4 Financial tips 15 Small business basics 17 Business administration 24 Refurbishment, and renovation 29 Refurbishment administration 38 Viewing tips 44 Presenting a property 50 Family friendly philosophy 55



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Introduction At Wealth Mentor we pride ourselves in providing high quality education so that you can be empowered to make better financial decisions. Our mentors and trainers are experienced in their field and have a wealth of knowledge that we decided to try to out together in this manual. Obviously not every piece of information made the cut but we believe this manual will give you a great head start in your investment journey. Our mentors & trainers are a diverse and interesting bunch, including all races, sexes, colours and creeds. They are, as a matter of principle, all active and professional property investors but added to that they all have their own particular skill or specialism. They have, as a group, countless degrees, including doctorates among them; there are business people, entrepreneurs, professionally trained accountants, lawyers, qualified teachers, finance specialists and property developers. Added to all this they are a very committed and exciting group and all bring many additional skills to the table. Obviously these people have gleaned many things during their learning and development as property investors, and this is a collection of their top tips, and includes some of their stories and tales that they have accumulated along their journey into financial freedom. They share them with you so that you can benefit from their many hundreds of years of collected experience in the field. Welcome to Wealth Mentor’s “How To Property Investing Guide.”



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Time based and diary tips Daily

1. Every day make a phone call to somebody who can help you move forward – an agent, a fellow investor, the Whitney help desk – anybody – but just keep on keeping on.

This helps you to stay focused, motivated and energised. Just by making the call you are taking action and you will increase your motivation (and theirs!) as a consequence. Call somebody to chat through your deals – they may be able to help to clarify your thoughts. Don’t let your enthusiasm drop too low and speak to somebody every day to keep yourself on track. There will always be somebody out there who can move you one step closer to your overall goal – all you have to do is make enough calls to find them.

2. Walk, talk and behave like the investor you want to be. If you believe that successful investors get up early, wear smart clothes and drink a cappuccino before 9 – then do that. Whatever you think successful investors look like, sound like and behave like; adopt those characteristics until you convince yourself you are that successful investor.

We are all better investors when we feel confident, which ensures that we make better decisions and feel less fearful. If this is hard - fake it till you make it!



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3. Everyday make a connection, look at a web site, read a relevant publication, and discover something about your field. None of us ever know everything and if we don’t keep developing we stagnate. You don’t have to pay huge amounts of money for this and many relevant publications can be had for a few pounds a month. Also get your local library to get copies of property magazines – and if desperate go to the dentist – where there will be countless back copies of Country Life! Remember even if you are on the right road, you will still get run over if you just sit there!

Three monthly

1. Make sure you up the stakes in the learning you do on a daily basis – so ensure that you meet somebody new and understand their approach to investing, they may give you a slightly different perspective on your thoughts and plans – or they may have a slightly different, or more successful strategy for you to try.

2. Go on another investment training to learn another skill. This

may add a different slant to your existing skills, or may replace them entirely. Please keep learning and developing.

3. When you go on that training make sure you meet some new

people to buddy up with and to provide mutual support for the next stage of your learning.

4. Take time to expand and nurture the group of people around

you, and you will increase your own power and success. Surround yourself with the people you most want to be like.



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Six monthly

1. Check your personal credit file again and see how your recent activity has affected that. Find it on:

www.mycreditfile.co.nz

If there are still items on your file since your first review that are not true or that can be managed better then take the appropriate action. Remember that your credit record is your responsibility so, manage it well. There are certain ways in which you can amend or limit information on your credit file, so contact the relevant credit agency to find out how to do that.

If you have been doing something over the last six months that has damaged your credit rating for some reason, take action IMMEDIATELY to rectify it – the longer you ignore the problem, the worse it will get and the credit agencies want to see that you have taken responsibility for the challenges in your financial life. If you are concerned phone them up and just ask “what do I have to do to repair or correct this”? Of if you see that what you have been doing over the last six months has improved your credit score, you then you know that you are on the right track and you can do the same thing again.



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2. If all is well then continue to work your credit score and credit

facilities to your advantage. It may well be time to get another credit card to give you another option on your investing or it may be time to phone the credit card company and move your credit limit up (or interest rate down) again.

If you want to get another card then go back and do your credit research all over again – the card terms and conditions and deals on offer vary from week to week, so what was a great deal last month or even last week, may not be available again. Find out the best current deals available by looking at the internet again –http://www.interest.co.nz/borrowing/credit-cards Always look around to see which credit card company has more than one special offer or marketing deal available – say a 0% balance transfer as one option, and a cash back offer as another option. The more deals the credit card company have on offer the more likely you will get a positive response purely because their high level of marketing activity suggests that they have money available for customers.

3. Go back and review your notes from each Wealth Mentor

training you have attended – you will learn something or remember something new every time! Add to your notes and mindmaps on a constant basis and after each separate training go back and review your notes and mindmaps from all the other trainings you have done because your new perspective will add another dimension to previous information.



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4. Review each area that you invest in – or want to invest in – and

check the basic criteria of take “A RIDE” all over again. It is important you do this as information and situations change rapidly and there could be some change that has occurred to one of the test criteria that would radically alter your investing decision. As a reminder the criteria of take “A RIDE” are:

A lternative investment opportunities – what choices are available in each area for our investment monies? Is property still the number 1 investment choice? Or is there a better local alternative – such as investment in a local project - that would change the supply and demand balance for the property market, and hence distort prices. As well as this consider the global or national alternatives. If suddenly interest rates were to plummet to 0% people with money in the bank or building societies would be desperately looking for somewhere to invest their money just to get any return at all on their funds. They would automatically look to the property market (and probably the equity markets) and this may be enough to disturb the supply and demand balance. All these additional investors in the market would push up prices if supply were constant. R atio: has the standard ratio moved, and if so has it got stronger or weaker? The ratio is the average salary for that area (or country) divided by the average property price in that same area. Always make sure that you do this by each separate investment area as the average house prices and the average salaries vary hugely just across New Zealand.



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Remember when you are reviewing the ratio, that the smaller the ratio number the stronger the support for prices in the property market, and the bigger the number the weaker the market.

A small number would be anything below 4 and a high number would be 9 or above.

I nterest rates. The lower the interest rate the stronger the property market and the more likely that prices will be rising. Consider if interest rates have moved since the last review of your property strategy and portfolio and if so how? If interest rates go down, more people believe that they can afford to buy property and hence demand goes up. As long as supply is constant property prices have to rise in these circumstances. As interest rates rise property prices tend to slow down and this is a major tactic of The Reserve Bank of New Zealalnd– and they attempt to control house prices by manipulation of the interest rates. Consider what impact interest rate movements have had on your particular investment area? Generally the lower the house price levels in an area the greater they are impacted by interest rate movements. D emand: has demand for housing changed? The higher the demand the higher the prices will go. Always remember to check this in conjunction with supply of housing stock. If supply is constant and demand increases – then prices will rise. If supply is constant and demand reduces then prices will fall. Also check demand for certain types of property as overall demand might by falling whilst demand for one and two bedroom units may be rising due to the changing nature of society.



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E mployment: In times of high employment demand for housing increases – so when employment in your investment area is high then property prices will be strong. If conversely employment is low and we have high UNemployment then demand for housing falls – because people feel that they can’t afford to buy property – and prices weaken.

Remember to look at this for each of your investment areas, and any potential area you want to look at – as well as the national picture – as all the information gathered will give you a better base for any investment decision.



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Annual

1. Review your whole portfolio again…… …… each and every year and drive up the returns on your investments to make your portfolio more and more productive for you. When you first start developing your portfolio, it is likely that you took on properties that had small profits or perhaps were either close to break even.

We are always striving to get a better portfolio. So ask yourself these questions every time you review your portfolio (each property):

• can I get a higher rent? • can I get a cheaper – perhaps a discounted - mortgage? • Can I get a better deal with the management company? • Can I manage it myself now? • Can I reduce my other costs by getting a group insurance

deal or a better maintenance contract?

And if we can make improvements then we test what difference those minor changes would make to the return.

By challenging and testing we can improve the return on property by 1 to 3% per year, which of course would generate a significant amount of extra cashflow. Another benefit of doing this is that once the portfolio is fully invested, you have the opportunity to ‘cherry pick’ investments and only go for the high producing ones – at that stage you have emotional and financial and bargaining strength.



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2. Do a tour of all your properties

Touring your properties does many things: firstly it reminds you of how much you have achieved – so have a look and celebrate your achievement! Secondly it forces you to review the locality again – there may have been changes – a new apartment block being built at the end of the road, or a major factory which may provide job opportunities for example – these are all factors which would change your opinion on the expected income or return of your investment. Whilst you are there take the time to go and say hello and thank you to all your local power team – the managing agent, the builder, and even the tenant. It might even be appropriate to take small gifts to your team to show your appreciation. Make sure you talk to them all – you never know what they may now know or what opportunities they are aware of that you would never spot living so far away. Use these people as your local eyes and ears – and make sure that they know you appreciate that. Then look at each property to confirm that it still fits within your investment criteria. Only by looking at it will you remember things that may be important. It could be that you have made a subtle change in your investment strategy over the past year – perhaps to go for professional tenants only rather than semi professionals. By looking at the property you will remember that you have blue collar workers in there – and then you can decide if that is important in terms of your new strategy. Look for new opportunities – perhaps a new managing agent has opened in the high street – go and meet them to see if they offer anything new or better for you. Look in the local estate agents window to see what is up for sale – if nothing else it should give you a decent guide price on your existing properties which you can then review accordingly.



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For example, if there has been a large jump in prices locally – this may now be the time to go for a re-mortgage on the properties. And finally, before you leave the area pick up a local newspaper to find out what’s going on that you may have missed on your tour – and remember to check the property pages for information on prices, rent levels, property availability, or prospects and any other piece of information that may help you complete your local picture. Happy touring!

3. Make sure that the strategy is still appropriate…… …. For you and your circumstances. We all go through different times in our life where our circumstances change. So keep reviewing your strategy to see if it’s right for you and the people close to you. It would certainly change if you had a baby, won the lottery, had to fund children through university, and so on. It would a total mistake – or a total miracle - to keep the same strategy throughout your investing career and that would suggest that you were not generating the best returns for you, or you were an incredible stable – but dull – person!

4. As well as driving up your investment returns remember to keep

driving yourself and set yourself tougher, higher, better targets for your life.

Research proves completely that people who set written objectives achieve more in their lives, so every year set yourself and your family a 5 year focus and drive your objectives, goals and planning from that.



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Property will only ever be one strand of your life and remember that you can drive up the returns, and the success, from every area of your life. As an example, you can use the success generated from property to help in other areas such as health and fitness as property can give you the time and money to join a health club.

Look at the bigger picture – and keep driving!



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Financial tips

1. Some trainers say that there are only 2 rules for financing for property investment:

o Rule 1 is to borrow a lot of money (to purchase appreciating assets that produce cashflow) and

o Rule 2 is to never forget rule 1!

They say this because the less of your own money you use, the higher the percentage return on your cash invested.

2. Set your overall strategy at the beginning of your investing career and start with the amount of income you need in order to live and support your family. Once you know how much you need per month – keep going until that amount is achieved – and THEN you are effectively financially free and can stop your day job to concentrate in your portfolio (if you want to).

5. Financially when people start, they often want to start with a renovation project because they go for the short term gain -.i.e they see the amount of money to be made on this one project – and they can’t see further than that. However, it is often better to start with income producing properties if you have the cashflow to maintain the lending– which are more difficult to get excited about because the money comes to you over a much longer period of time. Concentrate on the income first if your situation allows you to because income generation frees up your time so that you then have the time and money to concentrate on the capital projects. This does depend on your specific situation. Quite a few of our clients want to quit their job and do property investing full time and for that reason they decide to make trading their main priority as they can replace their income through buying and selling property.



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6. In order to keep yourself sane and safe start with achieving several smaller deals rather than one big one. This is like fishing – you can either fish for several small mackerel or one big whale. The great thing about the whale is that if you catch it, you have made a HUGE catch, but if you get it wrong the WHALE will wreck your boat and you can drown! So you are safer doing smaller property deals at the beginning, because if you get the big one wrong, you will take a long time to recover, both financially and emotionally. Once you have successfully transacted some smaller deals and you have a bit of capital and income to fall back on, then the bigger deals are less risky as they make up a smaller proportion of your portfolio – overall.

7. Be aware that you might struggle getting funding for smaller

apartments and cheaper properties in rural areas. You will need to find a good broker who is comfortable with more complex deals if that is to be a fundamental part of your strategy. Choose a broker who is a successful property investor. This will save you a lot of time and money in your investment journey. Look at our recommended service providers.

8. Consider partnering with a builder and remunerating that builder

in profits from the property rather than just in a fixed fee. Try to avoid paying any builder a standard day rate as you may keep paying just for their time – and generally people get slower the longer they are involved in a project. So pay per job rather than per day. But if you can suggest to the builder that you will pay when the property is sold – and that their pay will include a percentage of the eventual gain or profit, you will protect your cash flow and you may get a motivated builder. Do take into consideration tainting issues when partnering with a builder. Seek appropriate accounting advice before establishing this or any other partnership or joint venture agreement.

9. Set the level of borrowings in your business at a level you feel

comfortable with. At first this might be quite low but as your investment confidence increases then your comfort at borrowing money will probably increase.



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Small Business Basics

1. There are a few basic issues common to anyone setting up an enterprise which may or may not appeal depending whether you consider yourself a ‘go and get-em’ type or a ‘back-office boffin’ type. Some time spent setting up a good financial control system supported by a good administration system will pay dividends in the years to come as you will quickly have information at your finger-tips to answer queries or monitor the health of your portfolio.

If you are thinking to yourself, ‘but I am a Property Investor, and my raw material is bricks and mortar not double entry and cash flow forecasts’ then you should take a moment to consider what you need to know. However much you do or do not like numbers and money we cannot get away from the influence money has on our lives and therefore the need to carefully monitor and manage our present and future funds. As property investment is part of your path to wealth, understanding the basics for sound money management will put you on the fast-track to financial success.

2. Where should we begin? If you come out in a rash

when it comes to numbers and money, there are some simple steps you can take towards good financial control. If you are already comfortable or even experienced in managing financial affairs, you may want to skim this section to familiarise yourself with the sources of information.

At every stage of growth of your property investment interests (or even think of it as a business, as that is what it will become as your skills, expertise and wealth develop) involve your team of experts such as the accountant, broker and lawyer.



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If you do not have an accountant, or you think your existing accountant is not well versed in investment property matters, interview several local accountants, or interview any of the ones we provide you in the list of preferred service providers. If you are really stuck for a local contact, try your local Property Investors Association.

3. You will want to make sure that your accountant understands your current financial and book-keeping skills and helps you create a system that works for you. If you feel that the system they devise is more for their benefit then remind them that the system should reflect your needs and skills. Don’t be daunted and make sure that you and they keep it simple!

An accountant will probably start by advising you to record the information required to calculate your income and expenses so that they may accurately complete your tax return. There are several ways to do this, ranging from pen and paper, to spreadsheet programs or dedicated cloud based accounting software like Xero. If your accountant asks you to use a computer program, make sure that he can recommend a suitable training programme so that you can use the program to the full effect. However it is better for them to provide you with potted guidelines and system to follow, and then you can rely on their expertise to sort out the detail. Work with your accountant to set up the categories of income and expense that they consider are most suitable and as always, this can become a complex area so take advice right from the start.



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So I went to the auction…. Many members of the Wealth Mentor group go to auctions regularly and many clients meet up for the social contact at auctions all around the country. If you are going to go to auctions and want to bid, don’t forget to take identification (passport or driving licence) and register to bid – otherwise you might miss your chance. When the gavel falls remember that there is a binding legal contract in place. Please look around at auctions for other members of the Wealth Mentor ‘family’ and go and say hello. Remember that quite a few auctions are filmed – so if you are camera shy you may want to wear your dark glasses.



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4. Staying on top of the day to day management of your properties, even if you use property managers, will require a small amount of your time on a monthly basis, and additional time as individual incidents arise. Typical activities could be:

• checking your bank statement for the rent

transferred by the letting agent or tenant • monitoring repairs and repair bills • checking off mortgage payments for each property • liaising with property managers on the re-rent of a

vacant property checking that property mangers have arranged a re-inspection of the property.

5. As a rule of thumb be prepared to spend 30-60

minutes per property per month on straightforward administration. This amount of time will go up and down according to whatever is happening in your portfolio at any given time and excludes the time spent progressing new purchases or sales. Some of the packages listed above include simple facilities covering the day to day management tasks, others simply ‘look after the numbers’.

6. As a rule you are advised to have a bank account

separate from your domestic account for all your property transactions. This means that you can easily separate your own personal income and expenditure from that of your portfolio; it is quicker for you and/or your accountant to tick off the items on the monthly statements against property income and expenditure, and that you can send copies to mortgage brokers or lenders if you are ever asked in support of a mortgage application.

When you are starting another golden rule is to keep everything (until you know for sure that you can throw it away), even if you get no further than the ‘shoebox’ principal – namely putting all your receipts, paid invoices and bank statements in a box and handing



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them to your accountant yearly (remember to give them lots of time to sort it all out ahead of the tax deadlines!). A further improvement on this system is to send the items to your accountant quarterly so that they get time to sift through the items, raise queries with you and do your accounts as you go. At least this way you will get feed back on your portfolio performance through the year, giving you time to make adjustments and improvements, rather than waiting for the end, when the problem may be difficult to rectify!

7. When interest rates change, be sure to keep track of

correspondence from your bank or lender telling you of new monthly payments. Then go back and re-calculate your margin for that property. If the interest rate has risen and your margin is getting slim, consider switching to a product with a more favourable rate or a discount from the lender’s standard rate. Be careful when you are making these types of decisions, to include all additional and one-off, cancellation fee(s) that could consume the difference between what you are paying now and what the new monthly payments would be. You will incur different one-off charges depending if you switch lender or stay with the same lender but switch product.



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8. To see whether the system you have set up is able to provide the right kind of information, try seeing if it will answer all these straightforward questions:

1. Have all my tenants paid their rent on time and in

full this month? 2. Have my property agents correctly deducted their

fees this month? 3. Have I paid all my mortgages on time and in full this

month? 4. Are there any routine checks that should have been

performed (quarterly property inspection, etc…) this month? What was their outcome?

5. Is there any outstanding maintenance this month? 6. Have the bills for last month or this month been paid

or deducted correctly by the property agent? 7. Which tenants are in arrears and what is being done

about it? 8. What is my vacancy rate (weeks empty per property

per year)? 9. Which properties are empty and how long for? 10. What has been done to get them filled since last

month?

A system that can quickly and easily provide you with this information will go a long way to answer most of the key questions that you need each month to effectively steer your portfolio to profitability and growth. If you start to fall behind in collecting and monitoring this information you will be much less able to respond to problems as the arise and once they have arisen they may go unattended for months before you take action and resolve them. This could give rise to lost rent, absconding tenants, unattended repairs or other detrimental events reducing your profit and often taking more time to resolve as each month goes by. Don’t forget, the quicker you deal with an issue as it arises, the lower your costs and the sooner your portfolio is back on top form again!



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9. If you find that you are an armchair investor by choice or circumstance and have insufficient time to put a working administrative or financial system in place, ensure that your property agents are providing the answers to all the relevant questions above in a timely fashion. Some property agents report four weekly while others report monthly. As your mortgage payments are usually made monthly it is easier to compare the performance of income and expense for each property if the information is provided to you monthly rather than four weekly.

10. Selling. When it comes to selling a property, be sure

to talk to your accountant so that he can start planning for structuring the sale in the most financially (and tax) efficient way.

11. Property Staging is essential to maximise the impact of your property when it comes to sell. A small budget spent on enhancing the presentation of your property when you put it on the market will pay dividends in getting an offer at or near asking price. Use our recommended service providers for a consultation on how to make your property look more desirable.



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Business Administration

1. As with all professions, truly efficient administration is an essential part of running a successful property business. You need to decide from the start how organising this will best suit your situation and you will most likely start from finding some spare desk space or a corner of a room at home.

The space available to you may determine some decisions but at the end you need easy access to all the paperwork for each property. If you try to work off the dining room table your effectiveness will diminish as the number of properties in your portfolio grows and a small dedicated area for filing and action will really help.

2. To begin with you are involved with a number of

professionals during a property purchase. An action file with a section for each expert such as estate agents, solicitors, mortgage brokers and valuers, means you have immediate access to all matters relating to a specific purchase.

You will probably find a 7 part multi-pocket tabbed organiser file is best for this purpose as you can pull papers in and out easily, whilst the purchase is an active issue, without the need to open ring binders to remove papers. Labelled sections with papers filed in rising date order will keep all the various activities easily to hand.



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3. If you are working on more than one property at a time it

is best to have a separate file for each. If a purchase is completed the contents can then be moved to a permanent folder and the file re-used. If a purchase falls through you may wish to archive the contents, for a time at least. This can be done in a manila, or a poly pocket folder labelled with the property name and dates of possible purchase. You can divide the contents into sections if you wish. This folder can then be stored in a box file labelled accordingly.

Once a property is your own it is surprising how quickly the amount of paper accumulates. A lever arch file per property is the ideal, giving you space to cover every aspect. The purchase paperwork is best filed at the back as it is largely of historical interest. Although keeping track of current values for each property held in your portfolio is an integral part of maximising your investments. This means that you may wish, at any time, to check back over your purchase costs. Later these can be transferred to a spreadsheet for easier access.

4. Ideally you then want to list all those responsible for

administering each property. A spreadsheet containing a summary of the information for all the properties is also worth compiling so you can update it, print a copy and have it conveniently displayed for ease of reference. Record the information for the managing agent, if any, and the maintenance companies, especially if you organise this yourself.

A list of these contact details inside the front cover means you can instantly access information when needed. Even if it is the same for a number of properties put it inside each file for quick referencing.



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5. After this a number of clearly labelled sections for the various areas of administration means you can break down the contents into sensible proportions. Unless you find it confusing it can be best to have papers within sections filed in rising date order, so that the most recent correspondence is at the beginning of a division.

The aim is to have every detail of a property, from the history through to the day-to-day management, filed in one place for ease and convenience of referencing and financial control.

6. It is great to have photos of each property on the front of

your files as it helps to fix it in the mind, and perhaps also some specific photographs through out the file.

Also have a section to track rising or falling local values, an assessment of the area and its potential for investment, and any specific problems associated with the property. You need these to make the decision to retain or sell or possibly to re-mortgage as time goes by.

If you have a number of properties in one area then a general folder for the area is sufficient, but any problems peculiar to a property still need to be in that individual file.

7. Keep a sharp eye on your property managers and track their performance ensuring that both you and your tenants are getting value for money. Give them a section in the file and note delay times between your instructions and a resolution. Also the promptness with which you receive rental payments and the speed with which repairs are carried out. They are your face to the tenant. Make sure it is the face you want them to see.



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8. If you own similar properties, for instance, several units in one block, it may be a good idea to file more than one in a lever arch file, as much of the information will be identical. If so divide the file into two or more main sections and then have identical sub-sections for each property within these. 9. Again for ease of identifying each file, Avery labels produce sheets, with four labels per page, specifically for lever arch files. There is space for a considerable amount of information, if desired, and the uniform labels do complete an organised set-up.

10. Aside from this you will want all the usual files for your financial affairs. For your accounts, tax etc., box files may be a better option especially if you have expense chits to file. They are easiest to store and access from clear Polyfiles with a snap fastener, stored in a box file. As you need to keep accounts information for six years (for legal and taxation purposes) these can then be stored in an archive box, with a printed report, until they are destroyed. It is a very good idea to have a single colour to differentiate these finance folders, even if you do not colour code over all.

11. If you undertake any refurbishments then suitable multi-pocket, organiser files are again ideal for use as site folders. The contents can then be moved into a lever arch file once the property is completed and rented, or into a box file once sold, if the property is to be a quick flip.



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12. Also box or magazine files for maps, street plans etc. Maybe a file for agents operating in the areas that may interest you, and any official publication of plans for new projects likely to bring a new area into prominence. A correspondence file for anything not directly relating to a specific property will also be useful.

Magazine files are ideal for supply catalogues you may consult regularly, as they offer easy access. It will also stop you from stock piling out of date stationery catalogues and furniture supplier’s lists as they are kept in clear view.

A row of files, tidily labelled, and looking like a terrace of front doors is a sight to gladden the property investor’s heart and may even encourage even the most paperwork averse investor to stay on top of filing!



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Refurbishment and renovations

1. Refurbishing property is exciting, and can be deeply satisfying, and for some it is the ultimate in property investment as it combines both creative and financial areas of expertise. It is also full of pitfalls and traps for the inexperienced or unwary, and there are a number of basic, golden rules that you may break at your peril.

If you love the challenge of restoring a tired or run down property to a good standard, it can be done to great effect. However you need to do so in a cost-effective manner and to create a suitable refurbishment for the demographic profile of the local area and your potential market.

Ultimately this is an exercise to generate money, either as rental income, proceeds from a quick sale, or capital growth for the future. It is a wealth creation area where it is essential to have all your facts at your disposal and make an informed decision in the light of them. You may need to know:

• What are the local contractor rates? • How long does it take to book a contractor? • Who is the most reliable local supplier of materials and

will they deliver to site? • How big should my contingency budget be? If you take on a project because you long to improve the property you must know that it is also viable. A huge stumbling block to your plans that arises along the way will not magically dissipate as the project progresses and it will stick stubbornly in your path, costing time, money and heartache. It could even mean an end to your hopes altogether.



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The tips and tricks come from real experience, so forwarded is forearmed! Take note and they will guide you into successfully undertaking one of the most absorbing, stimulating and fulfilling ways there are to make money whilst enjoying yourself and creating something worthwhile.

2. Do your homework first. Get to know the area you are

considering, study its strengths and weaknesses. It is a great buzz to find an apparently undervalued property but you should make sure you understand why it is undervalued. Decide from the type of property and its location, who it would best suit and then see if the figures work.

In deciding the level of expenditure the approach to the property must be a serious consideration. Never refurbish to a standard that is out of keeping with the general tone of the area unless you are fully confident that it will soon alter, in which case be sure that you can afford to possibly carry the extra financial burden if required until the area rises. This rule holds good for both setting too high, or too low a standard.

3. A house with no garden will not suit a young family but

might be ideal for first-time buyers who are both working. A smart apartment would be ideal for young professionals but in a sadly run down area it will only reach a certain level of return. It might, however, suit students if put into good, clean order and is well located near public transport and the campus. These questions help to indicate the limits to the level of expenditure by assessing the needs and aspirations of the prospective tenant or purchaser.

If you are buying to create a rental it is possible to do a simple, reasonably priced refurbishment for the present, with the option of additional work to raise the standard as an area begins to improve. Identifying such potential opportunities can be an excellent way to create a portfolio with prospects for increasing returns.



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4. Make a fundamental decision. Is it to be a quick sale or a rental? It will affect your choices of décor, materials and style further down the line.

Look at the potential and see if you can you create extra space possibly by dividing a larger room in to smaller more versatile areas. The additions and fittings of a room can raise the value automatically but it needs to be the best choice for your potential market. A young family would probably prefer a playroom rather than a study fitted out for computers and bookshelves.

Decide on the use of the property, and any extras you could create and get some sensible comparables with similar properties nearby that are finished to a good standard. Do not just ask the estate agent who is selling the property – he’s looking for a sale and is most likely to tell you what you may want to hear! Don’t forget to get the opinion of several agents who know the area well. An agent with no real knowledge of the locale may over generalise and under- or over-rate the price.

5. Get a rough budget of the costs to be incurred from a professional you can trust. Add in all the purchase costs and the cost of the mortgage for a realistic period whilst the work is carried out. Four to eight weeks for a sensible refurbishment of a six to eight room property are not unreasonable, depending on the amount of work required and the availability of trades-people. Do not convince yourself that it can be done in too short a time. It won’t.

Add in the mortgage costs required if the property does not sell or rent straight away. Be really hard-headed about this. If, after taking all these costs into consideration, there is the prospect of realising a sensible sum through the renovation it may well be worth doing. Different investors look for different sized returns on a flip. Some will only consider a quick sale if they can make a 20% margin on their total costs, others are willing to do a flip for 10% or even a fixed profit like $20,000 if they can turn



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it around quickly. Always over budget and under-estimate the net financial gain, that way when you come in under budget and at your target price, you will feel good about how well you have done!

6. Look at the size of the problems – do you need to clean back to a shell and re-create the inside? Do you need to address serious faults such as subsidence, dampness, poor drainage or re-roofing? The purchase price may reflect the costs anticipated but you need to feel confident to tackle such fundamental tasks. Call in specialists for these tasks and rely on their expertise for any area that you feel under-skilled or under-equipped. Don’t worry that in the early days you may feed quite unknowing about refurbishments, as you progress your own skill levels will increase and you will be able to assess the quality of workmanship and the scale of problems (and their answers) you encounter.

7. Be realistic with your aims. Will a thorough clean, fresh décor and carpet, some new doors on the kitchen units, and a professional clean for the bathroom suite, be sufficient? If so it may be the best and most cost-effective way to turn the property around quickly.

Conversely if it has a hopelessly outmoded and scruffy bathroom, maybe in the dreaded “Pistachio”, left over from the seventies, don’t even think of leaving it in situ unless you plan for the most basic of cheap accommodation, of interest to only the least choosy tenants. If the kitchen is dreary, with units beginning to sag, and a cooker way past cleaning up, spend your money there. Kitchens and bathrooms are the key to maximising your profit.



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8. If you plan to add bedrooms make sure the kitchen and bathroom facilities are enough to service that many rooms. If they are not, you will need to find a way around this challenge and think carefully as if you need to start moving, changing or adding to plumbing.

9. Your purchase made, have clear in your mind just what it is you intend to achieve. If you propose to use it as a rental for years to come don’t skimp on the standard. You will only need repairs down the line, and probably loss of rent if the repairs cannot be done round an existing tenant.

10. One golden rule is ‘Keep it simple’. Don’t go for complex plans that will eat costs and over extend the work schedule. Most likely no one will know any different after it is finished.

Another vital lesson to keep in mind is ‘Do not consider your own taste and inclinations when planning the interior.’ You are not going to live there. It tends to be a sure way of spending money unnecessarily.

Be aware of current trends, fashions and expectations in basic matters. For example today even the smallest of new kitchens will usually have a one-and-a-half sink. Your target market will determine other basics. A family will be happy with a master bedroom and smaller rooms for the children. Sharers will expect rooms of a similar size and will be looking for at least 9m square meter of bedroom space. A family will want to find a decent kitchen with good storage space, a comfortable living area and adequate bathroom facilities. Sharers may create a private world in their rooms and need a less generous living space and simpler kitchen, although they too will want to be able to wash!

11.The style of the existing property may also dictate some of your choices. In a street with a distinct character it is not a good idea to create a look that jars with its surrounding



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neighbours. Work with the building, not against it or else you might lose out in attracting a suitable buyer or tenant.

12. Something to keep always in mind is that most people make up their minds in the first few seconds when they view a property. That means that the approach should be as inviting and smart as you can make it. If there is a garden it should be tidy. The doorstep must be clean, and a bright front door should lead to an uncluttered, welcoming hallway. This way your prospective client will be ready to be pleased with the rest of what they see.

With an apartment you will probably have little choice as to the main hallways so the impact needs to start as soon as they stand in front of the door to your flat.

13. Remember that at the root of all this activity is the intention to generate a financial return. That is why you are doing it and all decisions should be taken in the light of this. Gouging out the walls and putting an illuminated plaster niche each side of the living room fireplace might create an elegant effect and it might fulfil a wish you may not have achieved at home, however this is unlikely to increase your profits.

14. When budgeting, bear in mind that after factoring in the large expenses such as labour, kitchen and bathroom fittings, creating extra rooms, plastering, decorating and floorings, you have still a long way to go. All the finishing detail can amount to a substantial chunk of the money spent. It is easy to forget door handles, curtain poles, and all the things we take for granted until they aren’t there.

When a project is nearing completion and you begin to think of ‘bits’ you need to get - beware – that is when often the expenses suddenly begin to mount. Do remember where the property is targeted, if the property is aimed at the mid to lower ends of the market do you really need chrome sockets and switches to finish off the re-wiring?



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15. In all of this activity, your best allies are one or two trusted and experienced estate agents and/or property agents. They will be happy to come and see what you are doing, and will give you seasoned advice from their knowledge of the local market. Initially invite them to view the property before you finally decide on the purchase and again when the refurbishments are progressing so they can get a feel for the actual improvements, floor plan and fixtures before it becomes too late to make changes. Their advice is as good as it gets, as they are the ones who have to make it work when you have done your part.

They may not always give you the answer you hoped for but they will not be following a whim and they’ll have a cogent reason for the advice they give. Remember that this too is going to translate into a financial reward if you get it right.

16. Keep your chosen agents in the loop. If they are good they will have your property poised ready to market as soon as they have final details and photos and those more switched on may even start marketing it before you finish, to line up prospects. This alone is a good reason to complete the appearance of the exterior front of the property early – people will see that a property is being refurbished and may start making enquiries, so don’t be surprised if you receive enquiries from your tradesmen about prospective tenants or buyers, everyone likes to be nosy and see what is being done inside a property.



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17. The watchword here is to achieve a professional standard. If the paintwork needs another coat, to give an even finish, you should do it. You might well regret assuming no one will notice. Not everyone will be aware of detail when viewing a property, but everyone will get an overall impression, and any skimped or poorly executed workmanship will register.

So, if you plan to do any of the work yourself stick to what you know and use professionals for everything else. The quality of the final finish will determine the level of return or will at least set a maximum you could achieve. To achieve this, your budget needs to include sufficient funds for the basics. When walls are smoothly plastered, with skirtings and architraves well fitted, and with a good finish to the paintwork, the room will ensure the best foil for fixtures and fittings. Skimp on this and no amount of glamorous, smart fixtures will rescue the result as uneven walls or skirting in poor condition will be quite evident to even the most inexperienced prospect.

18. If necessary you can save on the details without sacrificing the final effect. A bathroom suite doesn’t have to be ‘high tech’ and expensive to look good. Similarly there are keenly priced kitchens and utilities available. Ultimately it is how these things are presented that is effective, and the most expensive of fittings will look poor against shoddy décor and finishing.



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19. In planning electrical and water/waste services have some idea of how a room could be furnished, even if the property is actually going to be left unfurnished. This is especially important if the rooms are rather small. You don’t want a double power point on the only stretch of wall where there is room to place a wardrobe.

If you plan to do other refurbishments then keep a rough diary of how long different parts of the work actually took. If any aspects overran note down why. It will give you invaluable, practical information to apply to the next project. There are other tips that cover keeping tabs on the project.

20. Finally be sure that the property is sparkling clean, that any garden or exterior space is finished to an equally high standard and the windows are spotless. Remember too that good property staging, however simply done, will always attract a better prospect, at a better price in the shortest time.



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Refurbishment Administration

1. The key to a successful refurbishment (i.e. a profitable one) is tight budgetary control. This can only be achieved through efficient administration and it may sound like a boring chore but it is vital! Seen as a challenge to ‘win’ by staying in budget makes it more absorbing.

However if the budget goes astray the administration is actually even more vital to a successful outcome. Don’t get into a situation where you are afraid to tot up the figures as you go along. The day of reckoning will come, and you have a better chance of minimising the damage if you know where you stand.

2. Also if things start to go awry you can adjust your planning to offset the overspend as far as possible. This may involve cancelling some cherished ideas but it makes complete financial sense and while making the decision to cut something out can be a very difficult, dealing with the consequence of overspending is far harder. If in doubt as to the balance between overspending and making changes, ask yourself, and/or your refurbishment team, for their input. If the cost savings reduce the potential profits you can expect at the end, then it may be best to adjust the budget upwards if you can afford to, but you should know why you are doing so, and what the overall impact will be. Remember that this refurbishment is probably intended to both bring in income and to go towards financing the next investment.



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3. There is always the possibility when refurbishing that you

will hit an unforeseen snag. Not necessarily due to anyone’s fault. You may be dealing with older properties and even with a building report not all problems are obvious until you have the keys to the property and begin to dig beneath the surface. This is where a realistic contingency is a vital part of the planning.

4. All refurbishment projects need to be co-ordinated, either

by yourself or someone you appoint. They are responsible for time keeping, ordering, budgetary control and record keeping. So, preparation is the key - have everything planned on paper before the first time that the refurbishment team arrive on site.

Then keep accurate, up-to-date records of progress with notes regarding savings or overruns. Remember that you are not just planning for now but for later projects. If you are using a draughtsman or architect then he will have given you floor plans. Make sure you have your own copy to follow every detail. If not then they can be easily drawn up by measuring and creating a scale drawing on squared paper.

5. Measure everything. You will need to know the size of the

windows, both height and width, and where they fit along the walls, this should include the height from the floor. Remember curtain poles, blinds, curtains etc. Place doors accurately with the correct width, and put in any ‘nooks and crannies’.



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You will need to know how the plumbing runs and where the electric feeds are placed. This is where it can be useful to have a feel for how, ideally, the rooms would furnish. If you buy a new build off-plan from a developer the floor plans supplied will be marked with lights, switches, heating, water supply etc., and furniture. They have vast experience and it can be useful to copy their planned positioning.

6. Mark on the walls where new services are going and

which ones are being removed. In a simple re-decoration and freshen up this is less important, as nothing will basically be changing. However if you are making changes, and re-fitting the kitchen and bathroom it is a good idea to see how these changes will work on paper.

7. If plans are amended - issue another copy. Date drawings

and file older versions – as varying drafts are only confusing and may lead to a disaster.

8. Have a place for all your costs in the budget. Those

involved in the purchase, the building work, fitments, materials etc., so that you can track all your costs and most importantly check the end result against the projected figure. If you make amendments then re-work the budget accordingly. Never lose track of how costs are running up against expectations. The time to take action is straight away.

Your budget will have a projected figure for labour. If you plan to do any of the work yourself then there are some considerations. If in later projects you will not be available to do this, then factor in an amount by which the budget would have been enlarged, even if you do not pay yourself. This will be a guide to realistic figures for later projects.



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9. Have a work diary with tasks realistically listed in order of completion made up in collaboration with your builders. One approach is to have a first column for the month/day/date, with a break at the end of each week. This makes it easier to follow. A second column is for the room(s) involved, with sub headings or a third column for the particular tasks. The last column then has the initials of the workman/men concerned.

Allocating the individual jobs to the number of days estimated immediately allows you to see how actual progress is keeping pace with the projected timings. Keep the schedule updated on a weekly basis to monitor progress. This schedule is then used to make sure that adequate materials are on-site when required, to plan deliveries of fixtures and fittings, and rubbish collection, to schedule the fitting of floorings, etc. It also can be used to slot in any stage payments, wages etc...



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Excuses from the tenants…… We hear some interesting excuses from tenants about non payment of rent, some of the more unusual ones are: * my husband has left me * my dog has just had kittens * my dog ate it * I’m not going to pay the rent because the man downstairs keeps chatting up my daughter oh and, * I spent it



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10. Have a site folder containing drawings, schedules,

details of fixtures and fittings on order, delivery dates. All the names, addresses and phone numbers of anyone involved. In fact any and every detail of the work in hand. With everything in one easily accessible place you are ready to answer queries, spot potential problems and keep track of the project. You want to know day by day how things are progressing, and having everything to hand on site visits means some issues can be resolved on the spot.

11. Progress photographs are both fascinating and

exciting. You never quite remember how things were at the start, and probably no one else will believe you! However bad a state the property is in at the start it will, inevitably, get even worse before it gets better, and the preparation stage can seem to last forever. Photos to show all the stages are a great record of the work and may prove an invaluable insight on another occasion.

12. If the project is being done at a distance, and is in

someone else’s hands, make sure that you still keep yourself closely informed. Even if it is the simplest and most basic of refurbishments. Ask for stage photographs and progress reports. No one has your interests at heart as you do yourself, so visit if you can but at least insist on regular check ups.

Much of the secret to a successful refurbishment is efficient planning and administration, to ensure the best results both aesthetically and financially.



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Viewing Tips

1. When you are planning a buying trip to a new city or village, buy a street map of the area in advance and spend a moment familiarising yourself with the main streets.

2. When you plan several viewings in an area, particularly one that

is new to you, be realistic about the number of viewings that you can accommodate in an hour and factor in travel time, getting lost time and loosing the street on the map time. Better to plan to accommodate a few viewings per hour and be able to spend a considered amount of time at each property rather than have to rush from one to another risking upsetting the viewing representative or missing an important factor at a property.

3. Have all your property viewings listed on a single worksheet or

use a day per page diary with hourly time dividers. At a minimum record the street address, property style and selling price, postcode, agent’s company name and contact number, viewing representative name if known and street map grid reference. By having the agent’s contact details conveniently to hand, if you are lost or running late, you can easily call the agent to explain your circumstances.

4. Make a viewing summary sheet for each property and record

basic details such as property type and condition, location, neighbourhood and amenities, asking price and the contact details of other agents with similar properties in the area. Even if you do not purchase the property, attach the viewing summary sheet to the sales particulars then file them when you get home in a viewings archive – you will be surprised at how valuable this record will be over time to look back at the market when you revisit that area later as your portfolio develops.

5. If you are planning a viewing day, be practical about what you

need for the types of property you will be viewing. Be prepared for properties being more run down than the sales blurb, so dress accordingly and don’t be surprised by what you will find in the front garden. You may encounter the traditional garden features such as cars in various states of disrepair, broken



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prams and bedsteads. Or more surprising features such as trip hazards left by begrudging occupants, needles left by unwelcome guests or mess left by the local feral cats. Practical shoes, an unbrella, torch, damp meter, clipboard and digital camera are the accessories of the earnest property investor.

6. If you are travelling away from home to spend a day or two

viewing be sure that you book your viewings in advance. Many estate agents have full viewing books and if you turn up unannounced to do look at some properties you see in the window, they may not be able to provide you with a viewing space in the diary for a day or two. Also be aware that some agents only conduct viewings on certain days of the week and that you will need to be in the town on that day and booked with an appointment if you want to view at all. In such a situation it is very likely that a heartfelt plea to view on another day will fall on deaf ears.

7. Think about the type of accommodation you need to book in the

town where you will be viewing. You may prefer farmhouse B&B or an out of town location, however if you are likely to be arranging out of hours meetings with property agents or local finders, a centrally located hotel with a practical lounge may be more suitable.

8. If you have not done your pre-trip preparation in advance, the Tourist Information office is a valuable resource as a first stop in a new town for research. Many will provide a compiled list of property agents and estate agents and a free map which they can mark up for you so that you can plan your trips around the agents in the most time efficient fashion moving from area to area.

9. In conjunction with a copy of the local paper or a listing of

estate agents and property agents from google maps or similar, mark the locations of their offices on the street map you ordered in advance before you leave home – it will save time in the field and means that you can travel straight to agents on your arrival without having to stop to ask for directions.



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10. Before you leave home order a copy of the local

newspaper of the area that you visit so that familiarise yourself with prices and agents. When you place an order over the phone with the sales desk of the local paper be sure to check which day the property section is published.

11. However confident you are of your powers of memory,

after a full day of viewing similar properties when you come to review them when you get back to your hotel or home you may be surprised how they all merge in to one and distinguishing the one with the serious subsidence from the one that needed new gutters becomes a real challenge. With your digital camera (or smart phone) take pictures of problem items, the outside of the house and the neighbourhood to jog your memory. Most sophisticated cameras and specially smart phones have a voice memo facility and you can record the property address along with your pictures. We personally use “Evernote”. If your camera or smart phone has a short movie-clip facility consider doing a steady pan shot from the front door either side, up and down the street to act as a record of the environs. If you decide to buy the house this clip will act as a valuable historical record of how the area changes over the years of your ownership.

12. Create a viewing checklist summary sheet to keep on

your clipboard where you record key property details – address, agent, asking price, defects, area appraisal, number of and description of rooms and their condition. The form needs to be sufficiently detailed to act as an aide memoir when you do your property reviews back at base but not so detailed that all you time in the property is spent slavishly completing the form and not enough time is spent considering the property overall.

No more than one or two sides of A4 is sufficient. Even for the properties that you pass over, staple the summary sheet to the sales particulars and file them in your viewings history box file. You may get offered the property a year or two later and the defect that you originally spotted may be covered or patched over. Your diligence in reviewing your original appraisal will



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pay-off, firstly by appearing clued up when you question the vendor about the matter in the first place and secondly by ensuring that the defect has been suitably rectified. Also consider adding to your checklist an area where you can jot down personal details about the current owner and how they use the house. It may come in handy later if you have to contact the owner if you know that they have dogs and a piano, as it gives you a topic of conversation that you can use to get started to establish rapport with them. This is particularly useful if you are at a distance and can not get to see them face to face.

13. Compile a list of approximate costings for standard

refurbishment requirements appropriate to the area and type of property you look at regularly. Aim to roughly cost potential refurbishments while you are walking around the property (add in a good pinch of spare budget for the unforeseen) so that you can put in an offer promptly. The offer can always be made ‘subject to second viewing’ or ‘subject to builder’s estimates’ to safeguard your position while you are investigating the remedial work more thoroughly. The minimum items to cost up in advance should include:

a. New kitchen b. New bathroom/WC c. Rewire d. Internal and external decoration e. Re-carpet f. Garden/yard clearance g. Flat/tiled roof replacement

14. From the local paper phone several tradesmen from the

classified and display advert section at the back to get an idea of typical labour rates and some budget costs. Don’t be put off by people being unwilling to commit until they have seen the job, emphasise that the enquiry is for budgetary purposes only and that they the will be invited to quote when the job becomes live. Remember to follow through on this when you need more detailed refurbishment costings.



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15. Bear in mind the needs of the other parties in the viewing. Your estate agent or key-holder will typically have a busy viewing schedule to accommodate and will not be able to wait for ever if you are running late. Most viewing agents will wait 10 minutes for you to arrive to allow for traffic and delays but after that they move on to their next appointment. Even if you call ahead to notify them of your late running, don’t be surprised if they say that they cannot wait and request that you re-book. If the vendor is doing the viewing and it is their own home you may have more flexibility if you are running late, however if the vendor is not living in the property and is also travelling to the premises to meet you there, the same consideration applies as if a viewing agent were doing the viewing.

16. When you get back to base, prepare three piles of

viewing sheets – they are your ‘Yes’, ‘No’ and ‘Maybe’ piles – focus your immediate attention on you ‘Yes’ and then your ‘Maybe’ piles. Your ‘Yes’ pile should contain those properties that you have identified as clearly offering the potential for a deal. You may like to create a set of criteria that properties in the ‘Yes’ pile have to pass, for example:

• there is clear evidence for a discounted or well-structured

purchase • there is evidence of scope for improvement that will add

measurable value to the property • the property is in an area of firm demand • the property will be of demand when the time for sale comes • any refurbishments that are required are within the scope of

my present team and budget • comparables from at least three estate agents and property

agents stack up

Your ‘Maybe’ pile could contain properties that only pass four of the six tests, or have another feature that requires further investigation.



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For those properties in your ‘Yes’ pile, carefully run the numbers with a conservative view on the market, your transaction costs, refurbishment if required and rental figures. Satisfy yourself that you can stand the property being refurbished or empty for longer than expected.

17. Prepare your offer and present it to the agent or the vendor having carefully checked all the numbers – at least twice! Also factor in seasonal aspects of the market – if your property is going on the market in the traditionally slower period of November to February, consider that you may have to wait longer for a taker or that your price may need to be lower than in the more buoyant periods of the year.

18. Once your offer is accepted and before you go

unconditional, don’t be afraid of requesting a second (or maybe third) viewing. It is absolutely essential that you are fully acquainted with your prospective purchase, it’s defects and neighbourhood and immediate neighbours. Re-do your sums in the light of builder’s quotes that you may have received since the first viewing and use them as a negotiating tactic if mandatory work is required such as damp, roofing or remedial wood treatments.



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Presenting a property

1. When dealing with redecorating and presenting a property to attract either a new tenant or potential buyer use a standard colour paint from a major supplier. Use our amazing discount with Wattyl paint as a starting place.

This is for several reasons. Firstly, if you use different colour paints for different walls or different rooms, you will have to maintain stocks of every colour you use to cope with small repairs. If you use the same colour paint throughout each and every property you can keep one central stock of paint for all. Then if you use paint like this you can buy in larger quantities and hence get discounts and reduce your costs. Thirdly, if you have a very small area to re-decorate – say in a kitchen where coffee has been thrown up the wall – you then have to redecorate only that small area rather than the whole wall. Finally, use paint from a major supplier as you can then be sure that the colour you buy this year is going to be the same when you want to replenish supplies in the future. Paint sold by cheaper outlets may change from year to year as they change paint manufacturers in order to keep prices low.

2. When decorating a property in its entirety try to keep the flooring the same – or at least the same colour, throughout as this creates flow through the property. The same floor will also make the floor space, and hence the property, look bigger.



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3. Think about the impact of the property when it is being viewed. We know that properties are bought from the outside and they need to have kerb appeal so that you ensure people go into the property to view. Concentrate on making the front door and front garden presentable. Ideally the door should be a bold colour such as red or blue with a neat and tidy front garden. It is essential that the hall or initial part of the house makes people feel welcome to the property – these areas MUST be clutter free – the worst place to put your coat stands or coat hooks and the table for the post (and circulars) are in the hall as this immediately makes the hallways look cluttered and small.

You may only have a few minutes, or even seconds, to clinch the sale of your property so make sure the first few minutes of any viewing are as perfect as you can make it for any viewer.

4. Decorate the properties in neutral and light colours such as

Spanish or Black White or pastel shades such as primrose yellow as these colours make rooms look light, bright, large and airy. People will not appreciate any property that looks cramped and dark. High end properties will require a high end designer’s colour scheme.

5. Make sure every property is clean and de-cluttered, and not

overloaded with personal items – the property has be like a clean canvas onto which they can put their life style and their belongings. If the property has too much personality and character, it makes it difficult for any potential tenant or buyer to see where they and their belongings can fit.

6. When showing people around any property always put all the

lights on, whatever the time of day as it helps to make the house look light, bright and spacious.

7. Make sure that every thing you do in any property is done

without emotional connection as emotion reduces the objectivity and clarity of your decision making. This is why investors are often better at presenting properties than owners – because owners live there and have their emotional life there. A house is



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a home and a nest and emotional security for people and they can be emotionally involved when they sell that nest!

8. When you are selling a property, after you have freshened up the décor, think about dressing the interior to give it a ‘lived-in’ feel.

Buyers can better appreciate the potential of your property when it contains furniture and decorative items that reflect how a home might look, or even how they might furnish the property themselves. It immediately creates a connection between your property and the buyer and can often tip the balance in favour of your property over someone else’s. You do not need to spend a great deal of money on items that dress your property and they can be used over again in other properties that you sell. If you shop carefully, a few durable pieces of furniture for each room with some prints for the walls, scatter cushions, home décor nick-nacks and creative lighting will go along way to remove the stark look of an unfurnished property. If you choose to add items to the property that come from your own home make sure that they are of the same calibre of the items that you have bought otherwise your own items may be shown up as jaded or more worn against the newer items. As with the décor, choose neutral colours for the main items of furniture and add splashes of colour with smaller items and soft fabrics, such as a throw or cushions, bold colourful prints, vases and candles (unlit). Match the dressing items to the target profile of your buyer. Avoid high fashion items or a minimalist look if your prospective buyer is likely to be a family. Likewise do not over dress a room that would be a child’s bedroom as you have no way of knowing the age range of the children who may ultimately reside there.



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9. Create a good relationship with a property staging company in your target area. This way you will get a larger number of weeks staged for the same $$$. Property is all about creating profitable and durable relationships.

Does that include fixtures and fittings……. When viewing properties obviously it is important to see if the fixtures and fittings are included in the price, but in some cases you need to check the contents very carefully. Make sure you include them all in your Sales and Purchase agreement. There are the normal cases of missing curtains, carpets, light fittings (where bare wires were left hanging from the ceiling), cookers and fitted kitchen units having been ripped off the wall. However one mentor walked into a property to find that all the floorboards had been stolen and they viewed the property by walking on the soil in between the floor frame. 10. Ideas for property dressing - if you are really stumped for ideas on how to make your property impress your prospective buyer, then take time to visit show homes of the larger developers in your area, after all they are in the business of selling homes every day and a careful inspection of a representative range of new homes will give you some useful ideas about how best to show off your own. Look to see if how they stage an apartment for sale compared to a 3 bed home. You may see several items of furniture using toughened glass in the kitchen/diner or lounge. Using a dining table and coffee table with toughed glass tops makes the pieces of furniture ‘disappear’ in to the room as you can see through the item.



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Some of the larger department stores feature room sets where they combine several items to simulate how a room could be dressed. Using the ideas they present, copy the appropriate scheme or layout for your own use. Buy one or two good quality home design magazines from your newsagent. Treat the ever-popular TV make-over programmes with a degree of caution, bear in mind they often have been commissioned with an element of entertainment in mind and the timescales they present in the programme often omit the time required for preparing the room. Furthermore the make over is only needed to last for the duration of the filming of the programme - and it may not be practical (or durable enough) for ongoing or heavy usage.



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Friendly family philosophy

1. Never borrow to spend, only borrow to invest in your future – in education for you and in assets which support you.

2. Remind yourself always to be grateful for the joys you currently

have.

3. The loved ones rule – only buy properties that you would be happy to let your loved ones live in. Unless you have a specific strategy in play, which would mean that the properties are unsuitable for your loved ones.

4. The one third rule – this recommends that we remove one third

of our furniture and possessions when selling or letting a property for better presentation or staging of the property. So put one third of the furniture in storage, take one third of your clothes out of the wardrobes and put them into a suitcase in the attic, clear out one third of each cupboard, drawer and one third of the clutter from each room. This ensures that the property looks as clutter free and as spacious as possible.

5. Keep focussed on the long term goals otherwise you will get

overwhelmed by the two blockages known as “I can’t do it” and “I can’t afford it”.

6. Make sure to keep giving in some way - share some

information, support somebody else to get closer to their goals. This giving doesn’t have to be money, it could be knowledge or experience or some contact details.

7. Never buy the most expensive house in the street – it will never

increase in value as much as other houses in the street. To get access to the highest percentage growth buy the low to mid range properties in each street or category as this ensures that the amount of potential growth is maximised.

8. Love people and use money to you advantage – not the other

way around.



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9. Become a master at using the standard Sales and Purchase

Agreement. Make offers and the perfect deal will come to you in due time.

10. The more I practice, the luckier I get, so keep practising

and taking action – eventually the luck you generate will ensure that deals will fall into your path.

11. Chinese proverb: “man wait for long time with mouth open

for roast duck to fly in” – in other words it won’t happen! If you want something to happen, you need to take action – just sitting there will only ensure that you sit there – nothing else.

12. The harder I play the game, the more ‘they’ pay so if I

take control and responsibility for my financial life then I will get the best deals

13. Snooze and you lose. So if you fall asleep and stop

learning, or growing and managing your investments you will stagnate and your financial returns will diminish.

14. The impact of refurbishment must be to create a light,

bright comfortable living space into which people can fit their own personalities. This is why white woodwork and magnolia walls work so well – you are providing the canvas and the tenant or buyer provides their own lifestyle. This maximises your opportunities and the number of potential customers for your product.

15. Property Investing is a two pronged business. The two

prongs are: people and property. By combining experience in both people and property, you can maximise the other ‘p’ – profits.

16. “Money isn’t everything, but it sure keeps you in touch

with your children”. John Paul Getty II.



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17. Don’t determine your investment strategy from a specific location, even if that location is emotionally important to you – determine the strategy FIRST and then chose where it works best.

18. You can make excuses or you can make money but you

can’t make both.

19. The deal of the century comes along about once a week.

20. Don’t forget that even with planning and experience many investments will still be a WOMBAT, which is a:

W aste O f M oney, B rains A nd T ime.

21. What’s to be is up to me! You are the only person

responsible for your financial success, because nobody else cares a hoot! So take that responsibility NOW.

22. Always remember when you need something or want to

know or understand anything that all you have to do is JUST ASK!

23. You become like the people you surround yourself with –

so think about your friends and family and how they help you or hold you back. You may need to take the difficult decision to change some of your friendships.

24. Ask everybody you contact “are you a professional

property investor”? If not how can they understand what you want or need. Ask everybody that you want to associate with in your property investing life – your accountant, lawyer, estate agent, every body!



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25. Make sure that you don’t retire as one of the 99%! When we retire, on average only 1% of our population is financially free, meaning that 99% are not – which will you be? Please don’t work for your entire life to have nothing when you retire.

26. Remember that there are unfortunately a majority of

people who are negatively driven and will constantly tell you what you can’t do. Be aware that those people are there and there’s nothing you can do about them – the best you can do is to accept them and protect yourself by not hearing or accepting their comments.

27. If anybody that you are dealing with makes you feel

personally uncomfortable or pressured in any way, make sure that you learn a simple technique – of just walking away from them.

28. You will never go bust leaving some profit on the table for

the next person, so you don’t need to extract every penny for every deal, and if you do you might find that you don’t do too many deals.

Conclusion So this collection of tips and tales may have sparked some interest for you in the whole property investing arena – and if anything you have read lit that spark then go and research that particular area further to see if that could lead to your personal and particular path to financial freedom. Dip into this manual from time to time to see if any of the tips are useful for you at each stage of your investing career – and whatever you do please keep reading, learning and developing, and please share some of your tips and tales with us as Wealth Mentor’s clients for our future readers. Thank you.

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