Hi All,
I have not done a property reno before so I would like advice on what people look at/for when researching a potential property to renovate. To help, I would like to draw you attention to a particular property so we have something tangible to discuss.
For this discussion, I am curious what people would look at in relation to this property:
http://www.realestate.com.au/property-house-sa-holden%20hill-106578919
The property was built in late 1960's and is located in an area about 13Km North East of Adelaide. The suburb has a lot of low value homes but is going through gentrification with a number of properties being torn down and replaced with town houses ot larger homes. This street has a couple of houses that have been replaced in that last 10 years.
The property size is 570m2 which is about 30m2 too small to subdivide in this council area of Tea Tree Gully.
Some of the things that I believe should be done are:
– Replace the kitchen
– Cupboards in the laundry
– Replace bath, vanity and tiles in bathroom
– Repaint
– flooring – carper and tile/hardwood
– replace he front fence
– Possibly replace the carport and do a paved verandah
Is this what others would do with a place like this, or would you be looking at other changes, or skip completely?
As I said, I have no reno experience so I un extremely unlikely to buy, but I do want to learn.
Cheers,
Brett
Hi Brett,
Have a PLAN, address come of the following in your plan;
1) The strategy of the renovation (hold and rent or sell)
2) Cosmetic or Structural
3) Budget
4) Timeframe
We suggest you look to project manage instead of doing any for the work yourself, as it will enable you have scalability in your projects.
PS have fun!!
size in sqm is not the be all and end of if a subdivision would be approved by local council. If the merits of the subdivision are strong ie. Private open space is met, set backs, rear set backs then then can be allowances for sqm size.
Know your end sale value. Is this house with a new kitchen, cosmetic fix up, (I would render externally as well) going to be worth what ?? 300k ?, 320k ??
If you purchased at 260k (prob would negotiate a bit lower or for more favorable terms ie early access, long settlement)
5% for closing costs and stamp duty – 13k
renovation budget . 20-25k approximately
holding costs (assume 80% lend at bank at 5.2% interest rate for minimum of 6 months – 5.5k)
selling costs 2.5 % of end sale value say 320k – 8 k
bills m water rates insurance – 1.5k for 6 months
total example costs – 313k. If sold at 320k would only be a 7 k profit.
total cash required to complete the project would be 20 % deposit, closing costs, stamp duty and holding costs (unless working at the same time you could pay these as you go, best to have upfront though for lower risk) – total – 97k
This is why having your end sale value is absolutely critical, more critical then your renovation budget.
– Replacing the carport is a expensive cost that wont return as much dollar for dollar spent as say painting or rendering.
externally i would render, minimal landscapping and a paved area.
internally i would paint new kitchen, new light fittings and floor coverings or if decent floors polished wood.
Thanks for the information.
Wilko, when doing your calculations do you have a template that you follow. Is it something that is available and ensures you do not over look anything? Do you also have ball park figures for all of the different parts of the reno, render, kitchen etc to fit into your calculations, if it is a ball park, how did you come up with it?
Cheers,
Brett
Experience tells me how much I would need to spend on a home for a renovation. But if you were completly novice. You could write down the external measurements of the building (get off the floor plan) and give that figure. Say 100 sqm minus windows etc to a render and maybe a picture of the house (I would avoid saying
you haven't bought the home yet) and ask for a couple quotes. Get at least 3 then you have a rough idea of costs if you had never done anything before.
For kitchens on low value homes (in adelaide, you can shop at building auction places, as with melb and Sydney. And pick up a new imported kitchen for under 1000 dollars. The quality is low to medium but it's brand new and in condition)
typical figures to spend on a kitchen include 2-2.5 % of the value of the home.
1-1.5 percent for bathrooms/laundry.
You can also get unit rates of a building estimating company, called Cordell's, but you would have to pay. But these give unit rates (combined supply and labour) for things like painting in sqm rendering, electrical plumbing, kitchen installations etc.
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