For Brisbane-based property investors Paul and Lucy Simpson, the secret to real estate success all boils down to one thing: deep market knowledge.
After living in Townsville in far North Queensland for more than three decades, the pair know the city’s various suburbs like the back of their hand.
This means they know the premium suburbs from the less desirable neighbourhoods, and they can separate the best streets from the less than impressive housing complexes.
Extensive local knowledge has allowed them to execute a ‘buy, renovate and flip’ strategy, which is allowing them to manage multiple projects at once – and line their pockets with substantial property profits!
How to make money in a down market
Located in Queensland’s far north, Townsville isn’t exactly a thriving property hot spot at present.
In fact, the city is considered to be cruising along at a sluggish pace, with Herron Todd White officially placing it at 6 o’clock – the very bottom of the property market cycle.
But that is of no concern to the Simspons, who use a tried and true renovation strategy to generate strong returns from their property investments. By manufacturing growth through strategic renovations, they’re not relying on outside influences to generate their returns.
“We buy into each suburb at a low purchase price of around $200,000. We then do an extensive renovation and sell relatively quickly, pulling a profit of $30,000 to $40,000 from each property,” Paul explains.
“So far we’ve done everything from simple renovations to full-scale knockdowns; with one, we demolished the run-down house and then just sold the land, ready for someone else to develop.”
Quick turnaround leads to quick profits
The real key to their success, Lucy explains, has been their ability to get in and out of a deal very quickly. Under the tutelage of Nhan Nguyen from Advanced Property Strategies, they’ve learnt a number of techniques to help them with negotiating, sales and marketing.
“With a lot of our projects, we get in and renovate within 4 to 6 weeks, and then sell it within 4 weeks,” Lucy says.
“We do the marketing ourselves and we’re able to get in there and start renovating after the contract is unconditional, but before settlement, which gives us a good head start.”
With 8 projects completed over the last few years and a number of deals currently on the go, Paul and Lucy no longer need jobs; instead, they funnel all their time and energy into their real estate projects.
“Before, we were just seeing how far we could take it, but Nhan helped us to develop renovating into a business. We’re now doing it full time,” Lucy adds.
“It all comes down to knowing the market; because we used to live there for over 30 years, we know areas like Kirwan, Railway Estate and Hyde Park like they’re our own backyard. It takes a little bit more time and commitment to become the expert in an area, but with that knowledge our income has increased 10-fold.”
The information in this article is general information only and does not constitute financial or legal advice. This does not take into account your personal circumstances and accordingly you should seek independent financial and legal advice before taking any action, or refraining from taking any action in reliance on any information contained in this article.