The Biggest Mistakes People Make When Building A Property: Part 2/4
The mistakes people make when building a property often lead them to go tens of thousands of dollars over budget. Here’s how you can avoid them.
Hey guys, Ryan here from onproperty.com.au, helping you find positive cash flow properties. This is video number 2 in our 4-part series on how to build a property. We’re talking with property expert Ben Everingham, who has a whole bunch of experience in the industry of new-build properties; built a few himself and is now helping people as a buyer’s agent to build new properties.
Ryan: Hey Ben, thanks for coming on today.
Ben: Good day Ryan. Hey guys, how’s it going?
Ryan: What we wanted to cover in this video was the biggest mistakes that people make when they’re building new-build properties. I don’t know a whole bunch about new-build properties. I haven’t built one myself, but I do know that it can be very confusing and there’s a lot of different things out there that you need to take into account. And I see a lot of people – I see friends of mine overpaying for properties and just making some big mistakes that’s setting them back years in terms of their investment strategy.
That’s what we want to avoid for you. We don’t want you to take years to re-make the money that you lost. So that’s why we’re going to go through these mistakes today.
So, Ben, let’s just quickly give people an overview – who haven’t watched video number 1. What is your experience in this industry and how is it that you know so much about new-build properties?
Ben: Beautiful. Yeah. So as I sort of said in video 1, I used to be the marketing manager at a very decent-sized building company – one of the top 10 builders in Australia. We sort of turned over about a billion dollars’ worth of construction.
Ryan: Just a billion, you know?
Ben: In the last year that I was there. We had 130-140 franchises globally. So, a very good company to learn from and work with. We built about 3,000 odd homes on the year that I left.
Ryan: And then you’ve also built some properties yourself, correct?
Ben: Yeah. Personally, I’ve also built a number of normal properties and also some dual occupancies and starting to move into duplexes now.
Ryan: Yup. And you’re working as a buyer’s agent helping people to build these properties. In all of that experience, what do you see as the biggest mistakes that people make when they’re purchasing property? And then we can go through those in more detail.
Ben: Beautiful. The sort of 6 major mistakes and I suppose anything from not getting a fixed-price contract, which was sort of summarised at the end of today’s conversation from buying a property marketer. Trying to find the next hotspot and buying in the next hotspot. Buying in an area that’s currently oversupplied or maybe will be over-supplied in the future. Building the wrong type of product, so, either over or under capitalising. And then, finally, not really knowing what you actually want to buy before you go in and speak to someone and then getting stitched up that way as well.
Ryan: Okay. So there’s a lot of mistakes that people can make. Let’s talk about hotspots first, because Sydney is obviously a hotspot at the moment. Things have been going crazy. We’ve seen mining towns that have been hotspots that have declined in the most recent years. What is it about a hotspot that people should avoid and what should we be looking at instead?
Ben: Okay. I suppose there’s 2 types of hotspots, as you just mentioned. One of those is the mining hotspot, which is an artificial hotspot created around a false sense of economy or false sense of potential future value. The underlying factors in those sorts of hotspots don’t really make sense to investors like myself that are looking for very set criteria before they move into a market. What I mean by that is there’s no long term indicator of population growth and there’s no long term indicator of jobs growth.
It’s just a short term boom, which is the result of one industry. It may be a casino being built in Cairns as a result of tourism or it may even be something like a mining boom in somewhere like WA or South Australia.
And then, the second, on the flip side of that is the Sydney and Melbourne, I suppose, what you call them mini booms right now. Where an average market or those markets will increase in value by 5%-5.5% per year but they’ve just gone through between 20% and 60% prior growth over the last 2-year period, which definitely isn’t sustainable.
Ryan: Let’s talk about mini hotspots first, for Sydney and stuff like that. Do you think avoiding those areas because you might overpay for a property or it might decrease in value? Or, do you think people have just missed out? Or, what is it about hotspots that you think maybe we should look elsewhere?
Ben: I think it all depends. A more sustainable long term market like a Sydney or a Melbourne that’s gone through what I would call a mini boom like it has recently is a perfectly fine market to invest in as long as you get in there at the right time. So the perfect time to buy in Sydney would have been 2 years to 18 months ago, obviously.
The wrong time to buy in certain places in Sydney or Melbourne might be now. Even though those markets are continuing to perform really well – and I actually found out this morning that Melbourne is now the fastest growing marketplace in Australia, it has outstripped Sydney in the last 3 months – is to make sure you really do your research and become very strategic and you definitely don’t buy in those areas that have capped out and where the average household income is anything less than what you call [inaudible 5:29] the rent in that area. An area with a million dollar price or home where the average household income is $100,000 per year doesn’t make sense because there’s going to be a glass ceiling in terms of who can buy into that suburb in the future and also who can rent that house of yours if it becomes an investment.
Ryan: Yeah. I think a lot of people think, “Oh, the market can never go backwards.” But I remember, I think it was back in 2003 or around that time, the place next to us sold for $725,000 at the peak of a boom. And then a year later, the people found a property that they like better in a colder sack. Because we lived on quite a busy street, and so they wanted to move there. So they sold to move and ended up selling their property for just over $600,000. So they lost $100,000 in a year because they bought at the peak of the market. So, it is definitely possible.
When it comes to mining booms and things like that, there was an area called Port Headland and South Headland that a lot people were talking about in terms of positive cash flow because you could buy a property for $800,000 in the middle of nowhere – we’re talking like a 3-bedroom shack for $800,000 – and it was renting for $2,200 per week. So, massive, massive rental income in the area. A lot of people put their money in there because, obviously, you’re getting huge cash flow back. And then I’ve just looked recently in the last 12 months, that area has actually gone down like 25% in terms of sale prices of the area.
So you do definitely need to be careful with the hotspots. I guess the reason we’re trying to avoid is we’re talking about building new-build properties for long term growth and long term financial wealth. Is that what you’re kind of on the same [inaudible 7:09]?
Ben: Absolutely. I talk to probably between 60 and 100 property investors at various stages, from first time to very, very established, like 20-30 properties in their portfolio every month. I can’t tell you one of those people outside of the first home buyers that hasn’t made a mistake where they’ve lost money on a property. It happens to everybody. Even those that do the best of the best research.
Ryan: I think one of the things people love hotspots because making $100,000 in 3 months or 6 months, as your property grows is obviously very desirable for people. But so is putting $100,000 on red at the casino and hoping that it comes up and that you double your money.
There’s definitely other ways to invest where you’re not betting on the top of the market and hoping that it keeps going up. That’s kind of what we’re trying to get at you guys. It’s better to look at indicators of a suburb, like population growth, economic growth and things like that, rather than just looking at hotspots that have grown significantly over the last 12 months or 2 years.
So, hotspots, we probably want to avoid because we might be overpaying for a property. We also want to avoid, you mentioned, over-supplied properties. Which I could imagine would be a big issue in certain areas where developers are just releasing too many properties on to the market. Is that what we’re trying to avoid?
Ben: Definitely. A really good question that we sort of talked about before today’s meeting was, “How do you identify an over-supplied area if there’s no new product yet to hit market?” So, what we’re saying is, we know that there’s a development that’s coming that’s going to bring on 500 additional properties over the next 5 years, but at that moment, the rental vacancy rate in the area is 1%. What effect is that new property going to have on the marketplace? So, I suppose, that’s the question that is going to be hardest to answer and that needs to be answered.
The way that you can answer that question is by talking with local real estate agents and really understanding the underlying drivers or demand in the marketplace and property managers that are in the game day to day.
The other one is to identify where vacancy rates are right now. A really low vacancy rate is a suburb would be anything below 2%, which means that for every 100 properties, 2 of those properties are currently available for rent in a suburb. Anything above 2%, especially over 3%, means that there’s a current over-supply in the market. And unfortunately, if you’re the owner of a property that gets vacant, it may take you longer to find a new tenant to come in. Unless, you want to drop the price below market value, which none of us want to do.
Ryan: No. We want to see our properties grow. We want to see our rental incomes grow. What Ben is saying is that before you invest in a suburb, go and look at the vacancy rate of that suburb, look at the trend. You can check that out, just go to Google and type in “SQM research” followed by the words “vacancy rates”.
They’ve got a great tool that’s really up to date in terms of vacancy rates. But, as well, you are going to have to speculate a bit because in areas where they’re selling you developments now, obviously, they haven’t been released yet. They’re going to take a year or 2 years or however many years it takes to release all of those developments, which is going to affect the vacancy rates in the future.
Again, I guess it’s coming back to what we talked about in video number 1 where we said look at the baseline of the area. Is it consistently growing in population? Is there job growth in the area? Because when there’s job growth, people want to move into the area. More people move into the area means there’s more demand for housing.
So, rather than just looking at the development itself and saying, “Well, is this a good development?” Look at the area and say, “Well, is this area growing? Is there going to continue to be demand for this area?” I really liked what you said in video number 1 was try and imagine what’s this area going to be like in 20 years’ time. By looking around and you see all of these developments happening and it’s a mining town. In 20 years’ time, is this still going to be an area that people live in? Well, maybe not. So, definitely, I guess, try and project forward and consider that because if it’s over-supplied, then it’s just going to be so hard to rent.
Ben: Yup. And I’d like to add something to that. I suppose the types of developments that I’ve personally bought in and built in are the ones where it’s in an established existing suburb with a small tract of land for new developments to come on board in. As opposed to something in a small area with a town of 5,000 people, for example, that’s got endless farms and green space and privately-owned land around that town. Which means that developers can go until people stop buying it, basically. And they will, they’ll keep supplying product until people stop buying it.
Ryan: I guess that’s one of the things people say about Sydney. Like, Sydney is trapped in because you’ve got the national park in the South. You’ve got the mountains in the West and then you’ve got a big rivers and stuff dividing it in the North.
Ryan: So it’s kind of like stuck in its pocket, which is maybe why part of the reason it’s performed so well.
So, definitely, do your research into an area. Try not to buy into an area that is going to be over-supplied in the future.
The next thing we wanted to talk about was purchasing the wrong product or building the wrong product. We talked a little bit about this in the last video, what kind of design you want for the area, but what do you mean by “wrong product” and what kind of mistakes do people make in building or buying the wrong product?
Ben: Yeah. So, there’s 2 common mistakes that people generally make. That’s either getting too emotionally attached to the build and completely over capitalising. Or, on the flip side, not understanding the market and the type of product the market wants well enough and under capitalising.
So, a good example of under capitalisation would be – let’s just pretend we’re in Melbourne and we’ve just bought a piece of land for $400,000 and the average price of another build in the area is $300,000 to build the sort of product that everyone else is building. Under capitalisation would be going tight on the build and only spending $200,000 and getting a sub-prime product for that particular market.
So, if everybody else has got stone bench tops and quality lighting and oversized rooms and quality finishes and fixtures and you go in with an investor level product that is completely under capitalising and you’ll actually put yourself in a worse position.
Ryan: Yeah. Like, if everyone’s got a 4-bedroom, spacious home and you build a little pokey 3-bedroom with no external deck and just the door from the laundry out into the backyard. Then, people are going to look into the area and say, “Well, what’s in the area?” They’re going to look at your house and be like, “There’s something down the road that’s better.”
Ben: And everyone’s grown up in that street where there’s that person just with the amazing, absolutely pimped house and everything around it is absolutely rubbish and that’s the flip side of over capitalising. Because at the end of the day, they’re not going to get the valuation that they need or the re-sale price and they’re just going to have to naturally wait for the market to increase in value to ever get money back.
Ryan: Yeah. I remember seeing a development where they went in; they were doing a big renovation on a duplex, like a house that was split in two. But their plan was to do one, sell it, so they will have enough funds to do the other. What they ended up having to do was they actually renovated the exterior of the second dwelling so they both looked like they’d been renovated before they sold the first one. And the real estate agent was saying, because they did that, they got $50,000 more.
And so, you need to realise that the street and what everyone else’s like in the street will definitely influence the growth potential of your property and will influence the sale price of your property. If you built a $2-million house in an area where most people earn $70,000 a year, the chance of you selling that for a premium is not going to be very high.
Ryan: So, you definitely want to be around the middle.
Ben: Definitely. A really good example of this was a property that I built for myself, a spec home. So, this is one of the biggest mistakes I think I’ve ever personally made. I didn’t do enough research on this particular area. I didn’t realise that the product that I was building was at the upper, upper echelon of what people actually pay for in that area. So, only 6% of properties in the last 5 years had been sold above that price point that I’d built for just to get my money back. Had I known what I know now, I’d be definitely building for the middle of the market so you’ve got the most potential re-sale or re-valuation value.
Ryan: Yeah. And again, it comes back to giving people what they want and trying to appeal to the most amount of people. If you’re saying you built a property where you’d need to be in the top 6% of the market just to get your money back, you’re dealing with a very small portion of the market that you can sell to. Whereas if you’re in the middle of the market and 40% or 50% of people would be interested around your price range, it’s going to be so much easier to rent.
It’s going to be so much easier to sell. And hopefully, when you sell, as well, there’s going to be multiple people interested that could create a bidding war and to push the price of your property up.
So, try and avoid under capitalising because no one will be interested because it’s so cheap. Well, try and avoid over capitalising where no one’s going to be interested because it’s so expensive. Do your research, look into the area and make sure you’re building one that’s suitable for the area.
Alright. Next mistake that we had was not knowing what you want. What do you mean by this? What are you talking about?
Ben: What am I talking about?
Ryan: I want to make money! Okay? That’s what I want.
Ben: What I mean by this is, so many people walk into a builder and go, “I want to build a house.” And this is from my experience of selling 3,000 homes per year. They come in not knowing what they want and they’re going to walk out of there knowing what the builder wants them to buy, if you know what I mean.
Ryan: Yeah. If you don’t know what to buy, they’re going to know what to sell you and they’ll sell you the thing that’s best for their bottom line.
Ben: Exactly. Most people want to help other people, but in reality, if I can sell you a $300,000 home or a $200,000 home and you don’t know what you want. I’m going to set your expectations so high that this is the type of product that you need and you want. And you may end up completely overpaying.
What I’m saying there is, start with what you want in mind before you even go and speak to builders. The easiest way to do this is to just look at Google, you know, “Top 10 home builders in Australia”. Every one of those builders has every one of their standard designs online, which you can go and look at what it looks like on the outside. You can look at the floor plan.
I say go and find 5 or 6 floor plans that you really like, that you think will fit in with the local marketplace and the type of land that you’ve got. And then, walk into a builder with these as an example and go, “This is a starting point. This is what I like. This is what I don’t like. Let’s create something based on that. What have you got that’s similar that suits?”
And then from there, the builder’s not going to take you off on their own tangent. You’re going to be the one in control of the conversation and even getting more specific than just design. Like, understanding what level inclusions you want. Like do you want a laminate bench top in the kitchen or a stone bench top? Do you want European appliances or do you just want something out of Harvey Norman Australia? There’s so many different options. The more specific, the quicker you’ll get to a fixed price and the quicker or the easier it will be to save money.
Ryan: Yeah. I think it’s – I’m going to use a metaphor. It’s like if you go bowling, if you don’t know what you want, then those gutters are going to be open and the builder’s just going to push you into the most expensive gutter [inaudible 19:03]. Whereas, if you know what you want, it’s like having those railings on the bowling. You know the ones that the kids use that push out that block off the gutters. And when the builder tries to push you into the gutter, you can go, “No, no. I want this.” And then you can hopefully go down and get a strike.
Ben: I want to play bumper bowling with the lightest ball possible so I can just knock those pins over.
Ryan: So, yeah. So that’s what we want to do. We want to have some structure to what we want. I guess, again, it comes back to doing your research to the area. Understand we don’t want to over capitalise, we don’t want to under capitalise. So, what does the area want? And then, go to the builder with that expectation of we want something within this price range with a floor plan similar to this and the spec level to this point. Is that correct?
Ben: Correct. The simplest way is to just physically ask the builder what they’ve recently built, what the market’s buying and then get them to physically go drive you around and show you. And then you’re going to know very quickly what they build as standard and premium inclusions level is. One hot tip that I literally just found out about yesterday is that sometimes a builder’s standard and premium price, they’re buying it for exactly the same but one physically looks better. That just break my heart when I heard that.
Ryan: What do you mean they’re buying it for the same?
Ben: A good example is a builder will have a standard brick range and a standard colour bond roof colour range. But then they’ll have a premium product as well. Exact same product, they’re buying from their supplier at the same price, but because one looks a little bit nicer, they’re selling it to you for an extra X-amount of money. Which is horrible to hear that sort of stuff is happening.
Ryan: Yeah. That’s sucks. You don’t want to overpay for something that’s basically you can get for the same cost. So, definitely, go in with your research.
The next mistake that we had was buying from a property marketer. I have had friends with this experience. Property marketer – let’s just explain. Can you explain to us what a property marketer is, how that differs from a buyer’s agent or how it differs from going directly to the developer?
Ben: Yeah. So, there’s 3 types of ways to really buy. It’s buying yourself – and that’s about going to the developer, getting a piece of land, going to the builder, getting a builder and bringing it together. There’s a property marketer, which comes to you with a completed investor product. Which might be your 400-sqm piece of land with the 4-bedroom, 2-bathroom home in suburb anywhere in Australia.
Ryan: So we’re talking about house and land packages here?
Ben: Exactly. Turn-key house and land packages is pretty much the easiest way to spot a property marketer. Sometimes a builder and developer will partner to help sell their product. But he simplest way to identify, suppose if you’re dealing with the builder or the developer is to just go direct. Knowing that they’re an employee of that company supporting you.
The third option is a buyer’s agent, which will generally have strong established relationships in the industry and be able to buy a product for you at wholesale price direct from the builder. And then pass those savings directly on to you as the customer.
Ryan: Yeah. I guess what people need to know about property marketers is they often disguise themselves as “property advisors” or “investment advisors” and they’re offering you a free service to help you purchase the property. We’re going to help you get a mortgage and a valuation and everything. What you don’t realise is that behind the scenes, usually from the builder but maybe also the developer, they’re getting a commission on top of that. So, this commission can be quite large. You know, 4-6%, anywhere from $5,000 up to $70,000.
So, you just have to think, if they’re making extreme commissions of $40,000, $50,000, $70,000 to give you this free service, what’s that going to do to affect the price of the property? And then you also need to consider the fact that they’re getting paid by the builders to sell a product. But they’re saying to you, “Well, we’re your investment advisor.” But they’re getting paid by someone else. Their best interest is to sell a property to anyone. Their best interest isn’t necessarily to help you get the best result.
I think that’s what people need to understand about “free” property advisors or “marketers” versus a buyer’s agent is a buyer’s agent, you them a fee and they do work for you for that fee. A property marketer gets paid a commission to sell a property and they need to find people to sell it to.
I had a friend who purchased property from a property marketer. They were told this area – we’ve got Residx data it’s likely to grow by 10% or more every year for the next 5 years. But what they didn’t know was there was these big in-built commissions and even though the area was set to grow and be a hotspot, they were actually overpaying for that property already.
They overpaid tens of thousands of dollars more than what the property was. To the point where 5 years later, they got that property looked at by a real estate agent and said, “Can we sell this property?” And it was $10,000 to $15,000 less than what they paid for it because they had just overpaid for it.
So, I guess, the whole thing with property marketers is they go to you and they say, “We’re going to help you do this. It’s just going to be super easy for you. It’s just free, goodness of our hearts.” And you can end up overpaying for the property. So, it’s just really important, whoever you go to, understand how they get paid and then be able to do the research yourself to understand, “Is this area going to grow? What are properties in this area actually worth? If I went direct and I bought the land and got the builder myself, how much would I be paying?”
Is there anything that you would add to that, Ben?
Ben: No. I think you’ve absolutely hit the nail on the head there, that’s it.
Ryan: Yeah. I just think people need to be careful. I’ve just seen multiple friends of mine get stung by this and just frustrates me. It’s different when a real estate agent is selling a house to a homeowner and selling it on the features of the house. But when you’re selling it as an “investment” and people are overpaying for it, I don’t want to see you guys make that mistake. I don’t want to see you overpay for a property. So, yeah, just be very careful.
So, last mistake that you had was not paying a fixed price for a build. Let’s talk through that. What are the different options and why is fixed price better?
Ben: Yeah. I suppose there’s 2 ways you can buy a property. One of those is a fixed price, which means you’ve got certainty around the product that you’re getting, the inclusions you’re getting, the design you’re getting, the colours you’re getting for a certain dollar figure. That enables you to plan and run your numbers as an investor and make sure there’s the right return.
The second option, which is, I suppose, in an area like Queensland. 80% of the contracts that are sold are, “Give us the deposit. We’re going to give you a basic cost, but that cost is going to not take into account the cost of, for example, a driveway, floor coverings, window finishings, landscaping, fences, blah, blah, blah, blah, blah”
So, they lock you in with this very cheap price upfront. And then it’s only after you sign the deposit and you feel like you can’t walk away, that they go, “Well, actually, there’s soil tests and there’s engineering and there’s all of these things which can end up blowing up your price on a $200,000 by up to $40,000, $50,000.
Ryan: So, is this a sales tactic by the builders to make the price look like less than it was? And, I guess, once they’ve got you bent over a barrel and you’ve already paid a significant deposit, then you have to keep paying because you’ve already invested so much and if you walked away, you just lose all that money?
Ben: Exactly that. It’s a sales tactic to suck you in with a cheap price. And then, they know that once they’ve got you in with a cheap price, it’s easy to up sell you. And also, they know that the psychology of most people is they don’t like conflict, so they’re not going say anything. But that creates extremely disgruntled customers and that’s why you jump on a site like Product Review, where every major builder in Australia is being reviewed by hundreds or thousands of people.
You’ll see people just so unhappy after their build. But in reality, if they had been more diligent upfront in their own research and got that fixed price upfront, they would have saved themselves so many headaches down the track.
Ryan: So does a fixed price include everything? Like it includes soil tests. It includes [inaudible 27:17]. It includes your build. It includes engineering, fencing, driveway, all of that sort of stuff?
Ben: A fixed price to me means you can literally walk into the property the day that it’s completed and it is 100% done in every way. It’s a completely livable house. Clothes lines, letterboxes, everything.
Ryan: Okay. So, how would someone go about insuring they get a fixed price? And it’s not fixed price on part of the build, but not the rest of it.
Ben: It’s a really big challenge because builders are reluctant to give you a fully turn-key fixed price until they’ve done the soils test. But they can’t do the soils test until they’ve got money from you and you’ve actually identified the site that you want to work on.
It’s kind of sometimes the chicken or the egg. But, as part of this video series, we’re going to give away a checklist which basically looks at all of the major pieces of a standard builder’s contract so that you don’t miss anything. And then it will allow you to compare builder’s price A, B and C from 3 different builders and you will be able to make sure that you can systematically work through their quote. And if there’s 3 or 4 things that are blatantly obvious that they’re missing that the other builders have supplied, you go back to that builder again and again and again. Until everything that you wanted included is actually included. It is a bit of a painstaking process, but it will enable you to get a much better result.
Ryan: Yeah. That checklist will help people. We’re going to release that in video number 4 and you guys will be able to get that for free.
Basically, to get a fixed price, you’re going to need to go to multiple builders and get multiple quotes and let them know, “I want a fixed price. I want a turn-key package.” And kind of force their hand, is that the way? And say, “Look, I’m only going to deal with the builder that gives me the fixed price, so either present a quote or not.”
Ben: Exactly. Sometimes, the builder will tell you it’s a fixed price and then you’ll sign off and they will still hit you up for more stuff. Like I had a client the other day who didn’t want to use the 3 or 4 or 5 builders in my regular network and wanted me to price-shop the rest of the market. She found someone that was slightly cheaper, providing slightly larger property. She went and signed off with that person and then they stung her for $45,000 on a $250,000 build.
You can’t say to someone that I told you so, but I wanted to say to her, “I told you so.” She ended up losing a $5,000 deposit with that builder because it put such a bad taste in her mouth and she ended up coming back to somebody in my network that will actually do what they say they’re going to do. There’s only a handful of people that actually do that.
Ryan: It sounds like that’s one of the way people end up overpaying for properties and they end up overpaying for the build is that they just don’t realise that there’s all these extra cost in there that they haven’t taken into account.
Ben: I saw this builder on the South coast of Sydney once when I was working for that large building company we talked about and this builder had cut their quote so far back to the bone. They weren’t even including their builder’s margin or profit margin for their business in the quote. So people would sign up at like $150,000 for a 4-bedroom home and then the builder would go, “Oh, we actually charge 30% profit because our business has to make a profit on this job. Plus, plus, plus, plus, plus.” It’s horrible and hopefully it’s something that will be ironed out of the industry over time. But it’s a cowboy’s industry still.
Ryan: It is. I guess it comes down to the fact that we, as investors, just don’t understand this industry. We don’t understand how builders make their money or how these contracts are structured and all of that sort of stuff. So we do make these mistakes. And we buy in an over-supplied area or we buy an overpriced property from a property marketer or we don’t get a fixed price and we end up overpaying for our property.
And so, that’s why in video number 3, we really want to go through in detail, how can you avoid overpaying for a property and what are some of the steps that you can take to ensure that you’re getting a property for the right price. You’re getting the land for the right price, the build for the right price.
You’re building right for the area. We just want to make sure that you guys don’t overpay for a property that you purchase. Because, as investors, you make your money when you buy. And so, you want to buy smart, you want to build smart and we want to help you do that. So, in video number 3, we’re going to go through all the steps that you can do to ensure that you don’t overpay for a property.
Well, Ben, thank you so much for going through these biggest mistakes that people make.
Just to cover them off again, we had buying in a hotspot. Buying a property in an over-supplied area. Getting the wrong product for the area – so, either over capitalising, building a mansion in a scummy area. Or, under capitalising, building a shack in a nice area. We also looked at going in knowing what you want. So, just like that bowling example, having the gutter barriers out. We talked about avoiding those marketers that overcharge you. And then, making sure you get a fixed price.
Look, thank you so much, Ben, for all your expertise in this. Looking forward to talking to you about how to not overpay for a property. So I’ll you in the next video.
Ben: Thanks, Ryan. See you guys in the next video.
Ryan: Alright guys, until next time, stay positive.