Summary: When you are renovating, you’ve got to make some choices. Do I sell this property? Or do I rent it at the end of my renovation? You’ve always got to keep in mind the goal & key to strategy is to make money, right? Here are some key tips to decide which direction is for you, do you sell? Or do you rent? The first strategy is called, the Buy, Renovate & Sell Strategy. Quite often, this is referred to as flipping. Flipping or selling is a great strategy if you don’t have much money behind you and in fact, what I say is that if you have just started out your property journey and you are starting to build your equity, you don’t have much behind you and by that I mean, if you have less than two or three hundred thousand equity behind you then you really should be a buy, renovate & sell renovator for your first couple of projects. What I did on my first few projects, I had to sell. I made a profit margin on my very first renovation, I did not spend one dollar of it, I tipped all of that money back to project number two so it became easier to finance the next deal. I got it renovated, again I sold that property, made a lump sum profit, I tipped that onto the next deal. And that is a great way to build your wealth if you are particularly starting out on a property ladder. The next strategy is the Buy, Renovate & Rent Strategy. Now let me tell you, this is the most lucrative strategy of all. Think about it, when you buy renovate & rent there are no agents commission, there are no selling or marketing cost, there are no capital gains tax until you sell down the property way down the track, we are also a nation that has massive rental shortages, so when you rent your property you have a queue of people waiting to rent that property form you. You’ll also get, typically a rental premium because tenants want a nice clean property to live in. But you can only be a buy renovate and rent renovator once you build up enough equity behind you. So my advice is, if it is your first starting out on your property journey, sell the first few properties that you need to do then actually get good equity cash flow behind you, so be sensible about what money you spend and what you don’t and as soon as you’ve got good cash flow behind you, switch strategies and move straight to the buy renovate and rent strategy. If you can do this, it will be a great way for you to build wealth. I’m Cherie, see you next time.
