Hey guys, just chasing thoughts.
Working on deal at moment-
700sqm block.
2 bedda 1 bathroom old 1950s Fibro cottage- abstesos.
vendor very negotiable as private sale.
However market is very hot at the moment and I hate buying into hot markets once they start running, needs lots an lots of work. Thinking 40k ish to Reno.
Comparable properties selling around 20k more- strong infrastructure nodes around and LGA spending lots on local upgrades due to population growth anticipated in future years.
With potential to develop at a later point and seeing as an getting it at 90cents on the dollar on purchase price that would be positively geared post Reno to me seems to stack up as another buy an hold for long term.
my problem is have always bought brick constructed houses built post 1975 to Reno an none this far gone.
also with a lot of housing commission homes around the suburb and surrounding makes finding a decent tenant an issue-
guys out there with fibro shacks how have they faired for you- growth wise maintenance wise and in attracting good tenants in neighborhoods that have a long associated stigma and in terms of renovating to boost equity position- anything should be aware of in hidden costs?
What difference does it make if it's a hot market if the price is below market value?
Just do the numbers. If It's CF+ from day 1 after the reno and you have increased equity then it sounds OK to me.
I have several ex housing comm places. A few are fibro. I painted one outside when I did the reno as it had graffiti.
Regarding area. I look at the presentation of houses in the street and how many are privately owned.
There are some streets in the middle of suburbs that are no go areas. I like the edge of bad suburbs.
I have never had a problem with tenants. After a great reno you can pick your tenants as people are lining up to get it (that's my experience anyway).
Look for asbestos (not a deterent, just be aware of it).
$40K is a pretty big reno. It must be a real mess. Structural? We do a full reno for $15K.
Just saw the 2 bedroom. I won't buy 2 bedders. More difficult to rent, especially if vacancy rates go up.
.
Hello
I am extremely interested in your comments re cost of full renovation.
Can you share tips of what you did please?
We typically strip out the kitchen and bathroom and replace both. We do the flooring (sometimes carpet, sometimes polished floorboards).
We paint throughout We pay an electrician and plumber and a carpenter for a few days. We also pay a tiler to waterproof and tile the bathroom. We do the rest ourselves.
Typically 5 weeks start to finish.
Catalyst,
How do you do a house for 15k?
This is our 3rd house, second reno project. We didnt go ahead with the 2 bedda mentioned above, instead a 3×1 on 700sq block that we picked up 20-30k below market value.
Have had multiple quotes but considering the basics-
Kitchen- $6700
Bathroom- $7500
Carpet 3x rooms- $1100
Paint- $400
Vertical- $1800
Flooring- $1200
How do you do all the above for sub $15k. Both kitchen and bathroom required full demo with nothing salvageable but other that those two spaces we have done the grunt work but still flat out getting out of it sub 20k with a deck we need to put in and demolition of a rear games room that is falling apart be looking more at $25k.
We are in Perth which seems to be more expensive than anywhere else in Aust- be interested on your take.
Kitchen- We buy from a wholesaler. Price $2,500-$3,000 (the $3,000 one was huge). Install $600. Plumber (friend $150). Oven, hotplate, rangehood, sink, taps etc $$1500. = $5,000
Bathroom. We strip it. Tiles we buy at a wholesaler. They usually have something on sale. Bath, vanity, taps (look on Ebay for baths etc). We have a few shower screens we've bought off Ebay (demolished houses). This saves at least $1,000 Tiler ($2,000). We fit the vanity etc.
So basically the savings come from our labour and sourcing stuff cheaply.
As soon as we find a place my hubby gets on Ebay etc looking for what we need. At other times if something is really cheap he'll buy it for later. We bought a few sinks with flick mixers included for $15 each. They were installed for the olympics so only used for a few months. Don't get me wrong, we are not buying cheap stuff but just getting it cheaper.
We did a burnt out for $25K but we paid someone to paint the outside and spray the roof.
Not sure of costs in WA but your bathroom and kitchen is a bit expensive. Also we get a house of all verticals for $1000 (not including bath or laundry). Look around for small companies.
Look for wholesalers. Big kitchen mobs import their own but smaller kitchen mobs use wholesalers. If you can find one go direct. They often don't have websites. Drive around some industrial areas where there are small factories. That will be your biggest saver.
Also find a good tiler (again, not a big company).
Good luck.
Hi Connolly/Catalyst,
You both mentioned "verticals". Are you talking walls here, or are you fitting vertical blinds to windows? If the latter, what is the idea with using vertical blinds – is it a cost saving or is there something else (e.g. a better look)?
Just curious – I hadn't heard the term used before as an item of cost.
Benny
Hey catalyst,
ebay doesn't get much over here but have grabbed lots of stuff from gumtree. Vanity, sink, mixer taps, ovens and range hood etc which have been 1/3 of the price if not less.
All tiles from wholesaler and kitchen guy was local cabinet maker.
With this current project, we did find a wholesaler for the kitchen which all had pre made cabinetry which was going to work out real cheap but the corner cabinets were 900mm each (U shape kitchen) and standalone oven 600mm giving total 2400mm, the space was 2300mm which was a pain- kitchen would have worked out at $4k if had of fit but so be it. still should make $50k on this one after all said an done. Try work back from a minimum of $1.50-$2 for every dollar spent on Reno when we look at revaluation when making initial offer.
do you guys flip post Reno or revalue, lease them and go again? And how many have you done?
cheers
Benny,
mate reference to verticals is for window coverings.
Use them as they look modern, easier to replace if a single one is damaged is as simple as unclip remove and reclip the new one on which cannot be done with venetians.
Curtain I don't like for rentals personally, so basic premise is ease and less hassle if I have a shit head tenant that wrecks a few as well as looking the goods too-
Hi Catalyst/Connolly,
Thanks – and yes, it does make sense as venetians do look ugly once bent.
Re the verticals, do you prefer the wooden slat style, or the "bendy cloth" style? I'd think the wooden ones would look ace, but maybe more expensive (and heavier…) We typically just throw up curtains (easy to install, and often get good ones cheap on Sale, or at op shops).
And Catalyst, I tried to look at your youtube link re the burnt reno – but it came back "Channel does not exist…." Problem my end? Or is the link crook?
Dheers,
Benny
Yes vertical blinds. Cheaper than venetians and for rentals if a couple of venetian slats get bent it looks terrible.
Our kitchen supplier makes to measure. I draw it up and send it to them. It takes 6 weeks so I order it as soon as we exchange contracts.
I want to get at least $3 for every $1 if I'm putting labor in. We haven't sold any. We buy, reno, rent. They have all been CF neutral to CF+ from day one with increase in equity from $55-90K.
We did a few partial reno's and 4 full reno's. Plus split a house in 2 with full reno.
Here's the burnt out one. We spent $25K. Increase in equity $90K but it went up another $70K last year. Yeehah!!!
http://www.youtube.com/watch?v=PAibRzU4nUU
http://www.youtube.com/watch?v=y2Vc9Zjc-1k
Hi. I edited it. I think it came up as my personal login so would allow access. They are the three in order.
We just use the material, vinyl type verticals. Great for rentals. For buy/sell though I'd probably not use verticals. Venetians look more expensive.
Hi Catalyst,
Wow, wow, and wow !! NICE job !! It looks like a new pin – thanks for sharing,
Benny
Hi Benny,
I like to bring back the discussion on the financial.
Have you done sums for positively geared property for short term cash flow. and also potential for capital gain in property over the period more then 7-10 years.
I like the point of
"strong infrastructure nodes around and LGA spending lots on local upgrades due to population growth anticipated in future years"
You should look at the potential sustainable population growth.
Good luck
Hey Catalyst,
very impressive- place looks brilliant.
Where abouts was this purchase?
out of curiosity- you said for every dollar spent you look at a return of $3 for Reno projects- so if you spent $300k on a place, put $20k into a Reno; you'd expects reval to come in at $360k is that right?
The house is in Mt Druitt (outer west suburb of Sydney).
Yes that's correct. This was $165K. We spend $25K. Then valued at $250K. That was 2 years ago. It would now sell for $300K.
Western Sydney went crazy in 2013.
Most of the others we spent $15K and had an increase of $50K+.
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