Well, its all finished now. Tenant moved in last week paying $340 p.w for 12 mths. My estimate was $320 – $330 p/w so I am happy with the result. We have applied to refinance our loan to unlock the equity after the renovation. Very happy with the result as the property is valued at $285k. I was working towards $265k – $275k to be conservative but was hoping to crack the $280k mark.

Gross Rental Yield – 7.82% – This includes purchase price, reno, stamp duty, legals, insurance

Gross Rental Yield based on Rent over Purchase Price – 8.84%. Valuer estimated rent at $250 p.w prior to the renovation.

Capital/Equity Gain – $59k – This includes Valuation less Purchase Price + reno + stamp duty

I have included stamp duty costs involved with all calculations – Do you all do the same or not? I know when REA's calculate gross yields they dont use it so it appears higher.

I just want to finish up this thread by thanking each and every one of you who contributed in any way. I am very appreciative of all the help you have provided me along the way. It has been great sharing my first renovation with you.

I wish everyone the best in 2011 and hope it is a happy and prosperous year for all.

Jacqui

Updated before/after reno pic's – http://s1130.photobucket.com/albums/m538/jacqui_303/

Hope everyone has had a lovely Christmas!

House Call,

Just to confirm,

I am not selling – It was a Buy, Renovate, Hold project. I plan to hold the property for the long term.

And the figures you have calculated are not accurate. If you read further down the post you would see a change in figures.

Purchase Price was $200k – The valuation at Purchase was $215k – So I bought it for $15k under market value prior to renovating.

Purchase costs were – $5600 for stamp duty, $1000 legals, $600 buildling/landlord insurance.

Renovation was $20k – Not $25k. $25k was the very maximum if something went wrong.

I have not got a valuation yet after the renovation as we have just completed.

We do not have any sale costs either as we are leasing the property.

The property was purchased due to being Under Market Value, Opportunity to Add more Value and decent rental yield.

Thanks for your feedback guys.

Catalyst – In relation to your question about if I would do it again – YES DEFINATELY, I loved the experience and it has really encouraged me to go out and do it again.

In relation to any ‘hiccups’ along the way, I won’t go into too much detail now but Our Sander pulled out last minute and we were unable to get any professionals to do it so close to Christmas. The reason he pulled out was due to some glue being on the boards in the kitchen. I told other Sanders that I called and they just laughed and said he must think his Sander is too precious to do it. Anyway…We were lucky to get my partners Dad to do it for us. He went to Bunnings and hired a Sander and the appropriate materials and we got the job done in 3 days (1 day sanding, 2 days polishing). The original sander quoted us $1200, we did the job for approx $400.

My 2nd mistake was having too much trust in friends that are tradesmen and taking their word when recommending other friends for work. My biggest lesson learnt was ALWAYS GET EVERY QUOTE IN WRITING, AND GET AT LEAST 2 QUOTES. Our painter did a good job, don’t get me wrong however when it came time for us to pay the bill went from $5000 to $6500. He claimed that when he quoted me $5000 it was only for the ‘internal’ and we owed him $1500 for the ‘external’. There were a few issues that really annoyed me about it. First I really nagged him for a paper quote and he would always come up with an excuse, ‘Aw my Mrs is away and does all the books etc’. Then he started painting the house PRIOR to settlement which we did not have early access which caused a problem with the solicitors but I did not ask him to go, he just went ‘presuming’ we had settled. Meanwhile we are in Sydney not realising any tradesman were there as he did not phone us first. The painters was lazy and didn’t put drop sheets in some areas so paint ending up on the edges of the floor boards which created more work for us. He claimed he thought a professional was doing it even though I rang him to say the Sander had pulled out and that we were now doing it. Anyway, the issues just go on and go – however he knows we are not impressed as I have stopped dealing with him and left it up to my partner to pay him.  I dare say there have been many other people who have got burnt as well.

I have not had time to sit down and go through all the receipts to crunch the numbers however doing rough calculations we are under our budget which was $20k. Time of renovation 3.5 weeks.

Purchase Price – $200k

Val at Purchase – $215k

Renovation – $20k

Rent – $340 p/w (Currently on the market)

I will be getting a real estate agent to do a market appraisal prior to getting the property re valued so I have a realistic estimate prior to dealing with the Bank.  I will keep you guys posted. on how I go.. I am sure the valuer’s will be conservative so I am not getting my hopes up. Market is a little flat at the moment too. I am going to wait until front lawns have grown back (We reseeded them due to it being ALL weeds in the front yard) and when we have a lease secured.

I wish I got more photos of the backyard – It was like a forest out there – Back corner was out of control, the weeds were taller than me, we even found an old fridge and bath out there. Getting the yards in order was a big job – lots of labour and trips to the tip! Lucky we have family and friends who were happy to lend a hand

http://www.domain.com.au/Property/For-Rent/House/NSW/Lake-Albert/?adid=6839698

This is the link – hope it works..

Now I just need to put the before photos on

Hi Lorraine,

Thanks for your post. I think we will be able to get away with just scraping it off as it is only in a few patches. I found out contracts have exchanged today so settlement will be on 19th November. Very excited, now I can book tradies in with exact dates.

What should the order be? I got told painting & floors last?