What's wrong with The Block?

Nothing that a dose of reality wouldn't fix. We have to admit the show is addictive, but can't help asking the tough questions: How much is it really possible to make from those amateur fix-ups? And having watched the show, would we buy one of those houses?   

Remember when it seemed that every time you turned on the TV, there was yet another reality show on - and this being the land of No 8 fencing fire, many of them were DIY fixups. Remember DIY Dads? DIY Rescue? Jack of All Trades? Maybe not. We at Fix It Building Services were asked to lend our professional expertise to some of them, Home Sick and My House, My Castle, but declined on the rest.

Why? The main reason was that we didn't want our good name connected in any way with the slap-it-on-and-she'll-be-right bodgey-ness that passes for workmanship on some of those shows. It's not the contestants' fault. They're given tight budgets and even tighter timeframes. And some of them had never lifted a hammer in their lives before. They were just there for the money and their fifteen minutes of fame.

Maybe that's why, in last year's Australian series of The Block, none of the done-up houses sold.

This year's The Block do-ups fared better, earning the contestants a cool $AU350,000. But renovation consultants, Jane Eyles-Bennett and Jane Slack-Smith, questioned whether the renovations would have made a profit in the real world. They calculated that when you add up the true costs - interest on the capital borrowed to buy the properties during the planning and consent stage, the contestants' lost income during the ten weeks they were involved in the show, commission and advertising costs in selling the houses, and that great Australian bugbear, capital gains tax - all of The Block's renos would have lost money.

Now, you could argue that in New Zealand we don't have to pay capital gains tax, but you have to remember that if you're buying houses here in order to 'flip' them, as the two Jane's would call it, you may still have to pay tax as you would on any business venture. That is, if you want to claim GST back on your purchases through the process, the IRD will want GST back on the sale.

Of course, there are two other potential costs that the Jane's don't appear to have considered. The financial and personal costs of any accidents you happen to have while you're DIY-ing - that costs the country millions in medical bills every year, according to the ACC.   And the potential future liability costs if the quality of your workmanship or materials isn't up to scratch and the new owner decides to make a claim.  Check out the ACC safety week campaign.

Don't get us wrong, we're not trying to put anybody off renovating for profit. We come across plenty of renovations that have made great money. We're simply advocating sound planning and preparation before you dive in. Of course, we also recommend consulting experts like Fix It Renovations on ideas and technical knowledge for optimising the value of your renovation. You'll also need to understand before you start what parts of the renovation you can do yourself, and what parts under the new laws will need to be complete by a licensed building practitioner.

The Block, 7.30pm on Wednesdays and Thursdays on TV3