The creative

Strengths

An innovator and pioneer: someone who makes old ways obsolete 

Sees potential and solutions where others don’t

Weaknesses

Can lose touch with reality in focusing on possibilities

Can be perfectionists: lose sight of the big picture

Best fit wealth building strategies: Renovating

You can build a lot of wealth out of property just through renovating. You may immediately think about buying old houses and doing them up for resale and that’s one way of doing it. Another option is to buy run-down businesses, hotels and restaurants, put your creative touch on those and then on-sell them.

Creatives will often see the potential in something that others (including the market) don’t see. They’re also good at finding new solutions to problems that have discouraged others (including the market). Creatives can often renovate a home and put in the fine touches that make it really appealing to the market. They often have a good handle on positioning and promoting the property in the market by coming up with the catchy ideas in the marketing brochure or the final presentation for sale.

I know some creatives who have bought old homes, done some cosmetic upgrading to them, leased some expensive furniture and artwork to make the places look a lot more expensive and sold them for well above market value. (We can’t all get TV lifestyle programs to do this for us but it works.)

Where creatives tend to run into problems is that they can fall in love with the place they are renovating and with the creative (or re-creative) process. They tend to get carried away and spend more on the property than it is worth. This is especially a danger where creatives are also perfectionists and like to express themselves in the fine touches and details. In renovation, that adds up to over-capitalising which either eats away their profit on resale, or means that they have to price themselves out of the market in attempting to recoup their costs.

If you are a creative renovator, it will be particularly important for you to:

• carry out a feasibility study based on the price range you are looking to get on resale

• set yourself a cost budget to achieve your goals

• keep a handle on your expenditure as the project proceeds

• plan for contingencies knowing your weaknesses. Allow yourself at least a 20 per cent margin above your budgeted renovation costs as a safety factor, just in case you do overspend on a property to bring it to market

• get the word out with your contacts (real estate agents and others) that potential renovations are your ‘thing’ – and go for it!

Personally, I’m a capitalist/conductor and while I’ve carried out some successful renovations, I’m not a natural nor do I do it particularly well. What I excel at is finding bargain basement properties (the capitalist’s preferred strategy) and identifying potential subdivisions (the conductor’s preferred strategy). Those are the kind of opportunities I’ve got agents looking for on my behalf and the kind of opportunities I’ve structured my active wealth building to exploit.