Guest Post from Russ Egan of www.russegan.com.au
Learn from My Mistakes
I purchased my first property when I was 24 years old. I did huge amounts of DIY renovations and was able to increase the value of that property by 17%.
This enabled me to purchase my second property at 25 years old. This property made absolutely zero in terms of market growth but did teach me a lot about property economics.
I scrimped and saved and purchased my third property at 26 years old, leading the way to a successful real estate portfolio.
Along this path I made a lot of mistakes – all of which taught me very important lessons.
Hopefully I will be able to share two of these mistakes with you so that you can avoid them all completely.
As a practical kind of person I decided for my first renovation that I wanted to do everything myself.
It took me two days of sanding, preparation, cutting in, rolling, and waiting to dry just to paint the master bedroom.
After that I went after the professionals and hired a painter – who completed the rest of the house in half the time, and at a much better quality.
The most valuable lesson out of this experience was the different in quality between an enthusiastic DIY’er and a professional tradesman.
Yes, it can be much cheaper to complete the job yourself but at the end of the renovation if there is a distinct lack of quality then the outcome in terms of market value and profit may be at risk.
Investigate The Whole Market Not Just The Property
When looking to purchase my second property I did not do sufficient investigation into the market.
I saw the yearly growth values looked good and checked locally for shops, schools, etc.
I also wanted the property to be close enough that I could conduct any repairs or renovations myself if required, which significantly limited my options.
Unfortunately for me there has been an enormous amount of construction of new developments nearby.
I figured that these were far enough away that they wouldn’t have a significant impact on my new investment, but I was very wrong.
The impact on values of supply and demand cannot be ignored, and a lot more investigation and analysis should be conducted if you want to be successful as an investor.
Real estate is a great investment tool and it is remarkable fun as well, but it can be very complicated with a lot to learn. Thankfully there is a lot of information available to help you avoid making the same mistakes that others have already made.
Russ Egan is an enthusiastic property investor. Born in country Queensland and an engineer by profession he has been successful in building wealth through real estate investment, cosmetic renovations, and small scale developments.