Did you watch The Block last night?
I made it home after our renovation workshop just in time to see the final two auctions… and what a disaster!!
3 of the 4 properties failed to sell under the hammer leaving couple Polly & Waz as winners by default [btw they’re already being referred to in the media as the ‘Steven Bradbury’ of the renovation world].
Their house sold for $855,000 on a reserve of $840,000, leaving them to pocket the $15,000 difference plus the $100,000 cash prize. While the other 6 contestants, visibly shattered, walked away with nothing – that’s after no less than eight weeks of pain staking work and sacrifice!
Here are the results if you missed it;
Josh & Jenna – Reserve Price $950,000; Highest Bid $901,000 – PASSED IN
Polly & Waz – Reserve Price $840,000; Highest Bid $855,000 – *SOLD*
Katrina & Amie – Reserve Price $860,000; Highest Bid $822,000 – PASSED IN
Tania & Rod – Reserve Price $850,000; Highest Bid $832,000 – PASSED IN
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This result highlighted two simple but crucial mistakes people make when buying and renovating property for profit;
Mistake #1 – They paid too much!
Mistake #2 – They spent too much!
It’s been revealed that the producers of the show paid $3.6 million for the four derelict Victorian properties. Since then, a second storey was added to three of the houses, all four were restumped, rewired, replumbed and reroofed, and each had at least $100,000 spent on it by the contestants.
Keeping the numbers simple, at a total cost of $4,000,000 each property had to sell for well over $1,000,000 for there to be any ‘real’ profits in the project. But even if we ignore the fact the producers paid way too much each property had been carefully appraised [by some of the best agents in Melbourne] prior to going under the hammer and only 1 reached it’s reserve price! So despite all of the extensive improvements people just couldn’t justify paying the prices being asked.
Once the contestants get over the fact they didn’t make any profit they should find some comfort in the realisation that if they actually had owned these properties they’d currently be looking down the barrel at some very big losses!
While The Block was an entertaining reality TV show and a huge ratings success for Channel 9 it was fitting that the finale brought home the ‘reality’ of what can happen when you get it wrong.
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