To DIY Or Not To DIY?

It is a tried-and-tested failsafe investment formula every property investor will tell you: buy low, renovate, re-value, recycle your equity and do it over again.  Renovation is the part of the equation that gets many Kiwi investors excited.  Because, you know… what is it that the Mitre10 kid said?  DIY, it is in our DNA?

Before you bust out the sledgehammer and crank up Bon Jovi on the radio, take some time out to think through your renovation plan.  It is easy to slap on a coat of paint but renovating to add value is a lot more intellectual than you might think.  Remember, you are renovating for the purpose of maximising your equity and the level of profit realised is often determined during the decision making stage before any work has began. 

Renovation, when done correctly, can increase your equity by giving you capital growth in the short term.  This is particularly helpful if you have other properties that are struggling with their performance (i.e. negative cash-flow) or if the market, as well as your portfolio as a whole, has plateaued.  In the long term, you are minimising the ongoing maintenance costs of the property.  

Hard to say.  The level of impact a renovation job can have on your property is dependent on the property itself.  Sometimes a simple lick of paint and some new carpets can straight away increase the rentability of a property and increase your cash-flow return.  Other times you are not likely to see much difference in return until you completely gut and refurbish the property. 

First things first, shut off your...