Biz of Property Ep. 6 | Adding Value

Date

December 10, 2021

In the Biz of Property series finale for 2021, Mike and Brady are joined by Connie Mastroianni to discuss the crucial factors to consider when looking to add value to a property.

Buyers are needing to consider the long-term value of a property more than ever. Homes need to be versatile and flexible, and able to accommodate many different and changing family contexts. Construction and renovations continue at record highs but knowing how to maximise the value of a property without wasting money begins with finding the right property and knowing what to look for.

Transcript

Mike Loder: Hello and welcome back to Biz of Property presented by Brady Marcs Buyers Advisory where each week we will dive into the latest news and trends happening on the property market right now, and we’ll answer the questions you need to know for your property journey as well. And I’m very lucky to be joined today by Brady Yoshia and Connie Mastroianni from Brady Marcs Buyers Advisory. Welcome to the program, good to see you.

Brady Yoshia: Thank you.

ML: Brady Marcs Buyers Advisory are committed to putting buyers at the centre of what they do being highly experienced professionals in the property sector, they create a bespoke customer experience tailored to each individual’s needs. Whether bidding at auction negotiating or full service source-and-buy, Brady Marcs takes the stress out of finding your perfect property match. And you can of course, learn more over at bradymarcs.com.au. And remember, whilst Brady marks is the sponsor of the program, today’s opinions and statements that we make in the program are of course our own. I’d like to bring the guys back in to have a chat, and we’re talking about our topic for today. And in the current market, buyers are needing to consider the long term value of properties more than ever, homes need to be versatile and flexible, I understand and to accommodate many different and changing family contexts. Construction and renovations continue at record highs, but knowing how to maximize the value of a property without wasting money begins with finding the right property. And knowing what to look out for. Do you two agree with that statement that I’ve just made there?

BY: Yes, absolutely.

ML: Well, Brady, let’s start with you. And I’d like to get your insight into what we’re seeing on the market at the moment. With all of that in mind.

BY: Mike, what are we seeing our buyers looking to buy versatile properties. When I say versatile, either a home that they can move into, and then stay there for a while renovate longer term or buy a property renovated and move into it. The other thing that buyers are looking to do are to do a renovation project and then to sell the property for a profit. So they’ve got to really understand what their long term goal is. So they are also planning for different uses, and for different family stages. So in other words, you know, some people would buy a house where they could create a media room with an ensuite that long term it could become for, you know, elderly parents, their master bedroom, or even a property that they can add a teenager retreat to. So people are looking at the right property in the right location that will allow them to grow into their homes. They’re wanting to maximize value, and they’re aligning their lifestyle with the area that they’re buying into.

ML: Fantastic. It’s interesting there, I’m picturing a home cinema system. But Connie, I’m going to go to you in long term value is something that is surely to remain relevant to every single buyer. But what exactly are we talking about when we say maximizing value?

Connie Mastorianni: Well, when I look at maximizing value, the first thing I look at when I go into a property is what potential there is, and then also looking at the purpose of the property that’s in question. So potential and purpose would also mean that you look at the demographics and the geographical position of the home. Because there’s no point putting in certain things into home, where you don’t get that return back. So you’ve got to be very aware of what that price is going to be so you don’t over capitalize. And in order to get the right price, you know, I always say to use professionals to give you prices to do that. Because, you know, in the end, it’s the knowledge and experience that is actually going to be worth it. Because mistakes will be quite expensive. So you’re best off getting professionals to give you those, you know, builders and people that actually know, I mean, it’s great to have family, but you know, that could go pear-shape as well. But ultimately just you know, getting the professionals to give you those prices. So then you know that what you’re buying, and you know, knowing the purpose, why you’re doing it seeing the potential, and then ultimately then see, is it worth it or not to do the work?

ML: Yeah. And that’s why we talked to Brady and the rest of the team about talk about professionals. Can you give us some clients stories that you guys have had successful ones and maybe some things you’ve learned along the way as well through your clients?

CM: Yeah, well, I mean, every case is different. I mean, it’s not one size fits all. You know, you look at their budget and then once you’ve got the budget nice look at their brief and there was actually one couple that a young couple professional couples that they actually wanted a two bedroom ultimately and and then I looked at, you know, some things with their budget was really quite difficult to get and then I said, Well, what if we come below the budget and then we can maybe do something? There was a loft apartment but I saw. The loft apartments quite big, so bedroom is quite big, however, the wardrobe was quite small. So that is two people living in a loft apartment, but there’s room there to do something for a wardrobe. So that was something that I could see that could be done putting up a Gyproc wall making a walk in wardrobe, still space for a king sized bed. And we came under budget for that. And then underneath the stairs, open up under the stairs, knocked out a wall and get some Gyprocing and put a study in or get under there. This was actually before COVID. So it actually worked out quite well. So what was you know, a loft apartment, ultimately one bedroom because of the space in square meters, it was almost loads one bedroom plus a study and heaps of space. So we actually added that extra money into the property that we’ve worked out how much that would cost. And it was actually under their budget, and now they’ve capitalized on the property in more ways than one. So that was really good, because they got into the the area that they wanted, and it ticked all those boxes. There was another instance, just thinking of it, there was a family that we also engaged and that family has three children, and their budget could only allow them they asked us, you know, just something in the area so they could have their own property. And after listening to the brief, you know, they wanted – the husband rode his bike to work and three small children. Again, it was just as COVID started when it was just a flu, and introduced them to some different areas, again, looking at demographics, and having worked out their vision, like what do you see this property doing because the vision also with the young couple, it’s seeing what they want to achieve with the property and treating it like a business because it’s money that you’re putting into the property. And it’s money that you want to grow. Because at some stage, if you’re going to sell it, or if you’re even if it’s a superannuation, it doesn’t matter what you’re buying it in as an investment, it’s like putting the money in the bank, and you want to see that grow. So if you get the all that right demographics thing, we can add value, then actually, it all just works. Anyway, they were basically then introduced into another area that hadn’t heard of, gave them some places to go to with the pram and the baby, and we got a phone call saying we love it. Yes, let’s go ahead and find in that area. And instead of a unit, we ended up getting a three bedroom, two bathroom, two cars, for under their budget, they’ve actually renovated it as well, and they’ve also now done quite well out of that property as well. So and obviously blessed through COVID, because we have actually had a few text messages saying they couldn’t imagine being in a unit through COVID with three young kids.

ML: Brady and I have discussed, you know the issues that COVID have wrought on the property market before on the show. But Brady, I’ll just jump over to you for the moment, how to buy a start to plan that long term journey, hopefully into something like what Connie has just described? And what are some of the questions they need to be asking, do you think

BY: They need to be asking what their timeframe is – how long do they want to be in the property? Is it for 5 years? 10 year? 25 years? And then start looking, understanding their budget. So if they’re looking to renovate, they’ve got to make sure that they’ve got sufficient dollars for the property as well as for the renovations. And then you’ve got to also make sure that it’s not stressful. It can be particularly stressful when you are embarking on a renovation project. So you need to enjoy it, get a team of professionals in to help you. So I’ll give you an example we recently bought for a family that were upsizing and what they wanted was two things that either wanted a house with everything done, or they wanted something that they could add value to. But they wanted a ‘wow’ factor to it. So what we did was we embarked on this journey with them and we found them an off market opportunity on the Upper North Shore in Sydney. The bonus for them was it it actually had city views. So they got to renovate a property with gorgeous views and have a wow factor. One other very interesting scenario I’ve had with clients is that they wanted a project to make money. So we found a terrace in the eastern suburbs which they’ve transformed from four bedrooms to five bedrooms and have two car spaces, which is unusual in that area, renovated beautifully and made a substantial profit.

ML: Fantastic, adapt and evolve with Brady Marcs Buyers Advisory – I love it. Connie, I’ll go to you and what are some of the ways buyers can plan proactively for the future and we are running out of time. So can if you can give us a quick rundown that’d be great.

CM: Knowing what they want to achieve and what is their vision. So before they renovate, knowing that they have that mindset that they will sell it maybe one day and if they want to, you know do a renovation, then do it carefully. So if you’re a first time buyer and you want to knock out a door, for instance, make sure the door is a little bit wider that you’ve been opening up a market to a downsizer later on that might be in a wheelchair. So it doesn’t cost you much more, you know, instead of being 800 or 820, it’s 850. So it doesn’t really matter, but you then open up your market when you’re going to sell. So it’s doing a renovation, but doing it smart and thinking ahead, you know, how can you open up the market later on.

ML: there’s clearly so much more we could talk about. But Brady, I’ll give you a few seconds just to outline some of those takeaways that we’ll put up on screen there. I wanted to touch on those as well, just before we end the show.

BY: Yes, so making sure it’s the right property to begin with. Do not over capitalize, try and predict your profit, because it can become a very stressful scenario if you over capitalize and also if you want to sell the property, you want to make sure that you’re going to get a huge – well, I wouldn’t say huge – you’re going to get a good profit out of that. Cosmetic renovations versus deeper changes. What we mean by that is, you either want to just do some small renovations or understand whether it’s going to be a larger project. Quite often, what we see is that clients of ours start with a very basic cosmetic renovation and it evolves into a much larger project. Don’t make expensive decisions if you’re going to sell, so don’t go for the most expensive finishes. Always get an independent assessment and perform due diligence, such as going to the council to check on pending DAs, so that there’s no surprises you’re not going to buy this property and within six to 12 months there’s a massive apartment block that’s been built next door to you. Always bring your builder in before your purchase. It’s very important prior to exchanging contracts that you’re building comes in and assesses the property.

ML: Fantastic rundown from you there, Brady. And I’d like to thank you both for coming on the program today and chatting to me about the latest from the business of property. Thank you so much for your time.

BY: Thank you, Mike.

ML: And to all of you out there and ticker land. Don’t forget to head over to tickeroriginals.co For more discussions such as this one. I’m Mike loader and thank you so much for your time today. See you soon.

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