The best lessons you can learn are those that come out of your mistakes.

We learnt a valuable lesson recently from one of our properties that, while it cost us several thousand dollars, the experience and lesson will stay with us forever.

There were two lessons in fact.

Lesson 1 was ‘never overcapitalise’. No matter if you are renovating to keep or renovating to sell on, you should always have the property ready for sale because you don’t know what isaround the corner.

Lets look at a property you are renovating with a plan to keep it inyour portfolio. You want to make it presentable enough to attracta good class of tenant but it doesn’t have to have all the bells andwhistles. Tenants want a safe and comfortable place to live.
The property we had the experience with, was one we worked onas if we were going to move in. What would we want? A newroof, new kitchen, painted in and out and so on, when we shouldhave just repaired the roof, partly painted in and out and wewould have had a very presentable property. As it turned out we needed to sell the property in a year and all the extra expenditure was lost.
That brings me to lesson number 2 – ‘look at the property through buyers eyes’ especially if it is a property you are going to ‘flip’ orsell on as soon as it is renovated.

In a market where buyers are very demanding and hard onnegotiations, your property has to have the wow factor. Butat what cost? I have seen many renovators come unstuck because they had fixed ideas about the renovation only to findout that while the bathroom looked fantastic, the property wasunderwhelming from the moment you entered. That moneywould have been better spent opening up the kitchen and lounge areas to give a big open living space. A nicely remodelled (dare I say cheaper) bathroom would not have mattered because the sale would be made as soon as they entered.

Those ‘lessons’ are only mistakes if you don’t learn from them.

What lessons have you learnt and what would you do differently inthis market?