Hi Rich,

You might be better asking this question on a NZ forum. Try http://www.propertytalk.com/forum/ where you can select NZ as a country and find out there.

I know NZ looks like a small place but prices vary greatly. However, one thing I can say is that now is still a good time to buy there.

You might also get some info from http://propertyblogs.co.nz/

Sorry not to be able to give you a direct answer but I do hope these links help.

Hi dbliss

As a general rule, improvements to the interior will increase your yield and improvements to the exterior will increase equity, so make sure the outside is tidy but don't spend a lot of money here (however, if you wanted to reval at the end of your reno you might put a bit more effort here).

The others are right – a fresh paint job (walls prepared well and then painted in a neutral, light colour), nice looking hard wearing flooring and a 'trick up' in the kitchen and bathroom which may include new bench-top, handles etc.., new toilet and vanity.

The trick is to establish your renovating budget first and then figure out what you are going to do to the property within that budget. As a general rule, I get my clients to budget 5-7% of the pre-renovation property value. This is very general and of course depends on the type of property it is, where the property is (what are other similar renovated properties in the area valued at?) and your expereince as a renovator.

I would tend to spend money on the visible things in the property (not wiring etc… unless it needs it for safety sake or plumbing etc.). Your tenant is not going to notice those things and therefore it will be difficult to increase the rent.

Another great thing to do is to figure out who your target rental audience is and then cater your reno to them. For instance, if your rental audience are young families, you would make sure the yard was secure. Or if the target rental audience are single mothers, maybe you install an alarm. You can talk to local property managers to find out who is likley to rent your property in the future and then brainstorm about what that type of person places value on. For instance if your target renters are young families, then you might think twice about installing carpet. On the flipside, an older couple might prefer this sort of flooring. See what I mean?

Hope that helps!

Hi Jess,

I think the most critical thing to do when reno-ing from afar is to have your scope of renovation work set in stone BEFORE YOU START. Know exactly what you are planning to do (colours and specifications of everything all written down on one document) for your various tradies to price/work from. There are several benefits of doing this:

1) The contractors can go to the property without you and know clearly what you want to do right from the outset and so can quote accurately a fixed cost up front
2) You can truely compare apples with apples because you have given the same spec to each contractor
3) Because all the specs are written on the same document, each contractor knows what the other is doing (eg: painter can anticipate the work they'll have to do due to the work the builder is doing etc…)
4) All variations to your scope of work are recorded separately and if pricing comes in different to quoted amount you have a clear trail of what happened (and whether you actually approved the change!)

I would definately recommend you get someone to project manage the job for you. No matter how experienced a renovator you are, you can never manage a project from afar the way someone there on the ground there will do it. I would suspect that the amount you pay the project manager/builder (margin on top of trades-peoples prices) will far outweigh the potential cost over-runs caused by a mis-managed job. You may even find a painter, electrician or plumber who is a bit light on work who will manage it for you.

I have loads of clients who live away from their properties and I help them with the specifications of their reno. In fact I had a client last year with a propery in NZ. She was based in Dubai and had never been to the property before starting the reno. Her property manager took photos of the property and sent them to me via email to specify the details of the reno!

Hi Johann,

Well done on buying an IP.

Can I suggest you look at renovating your kitchen? I have had clients with the worst of the worst kitchens and we have still managed to renovate them really effectively. You may think there is no hope but take a look at some of the photos on our website for a bit of inspiration… http://www.hotspaceconsultants.com/home

If you really do need to replace the kitchen, then yes Bunnings is pretty good. I especially like that you are not limited to buying the 'name brand' laminates and the like. They have a selection of products and finishes you can select from that will keep your costs down (eg laminates imported from Asia etc…) rather than having to buy Laminex or Formica which are excellent products but a little on the expensive side.

For appliances etc…, check out http://www.renovi.com.au who have a great range available over the net at really good prices.

Hope that helps in some way!

Hi Jonathan – the other way to look at it is to not do the reno work yourself, but educate yourself on how to manage others to do it for you (maybe this is what you're thinking of?). This way, you can have several jobs on the go at once or you can carry on your day job (if you want to) and do reno's on the side.

I work all the time with property investors who are renovating and it's the ones who pay others to do the work for them that make the most money in the end. DIY is fine if you are living in the property or if it is tenanted (by a very tolerant person!) and you don't need to worry about holding costs (mortgage repayments while the property is unoccupied and not bringing in any income).

There are a few handyman and renovation type magazines out there that will teach you the theory – but it's true you can never learn as much than when you do it yourself. It is important to have an understanding of what is being done to your property (so you can talk the talk and deal intelligently with the tradies) but it is not necessary to be able to do it yourself in order to make money. I have renovated a number of properties myself and have made some lovely profits – but never done any of the work myself other than a small amount of landscaping when I first started out.

I have written a fair few articles about renovating for profit and a number of these are posted on my website – http://www.hotspaceconsultants.com/Articles

Good luck whatever you end up doing. You're doing the right thing hanging out at forums like this and putting yourself out there! Well done.

Cheers,
Jane

Hi,

I agree that carpets in bedrooms is generally a good idea. Christian is right, carpeted floors of course give a cosier feeling and hard floors a cooler feeling.

You should consider the climate of the area your units are located before deciding what you'll do. Carpet is suitable for many areas of Australia, but I regularly have clients in WA, North Queensland etc… where the climate can be stinking hot year round. In these areas, owners and tenants tend to prefer hard flooring as it is cooler under foot.

The other thing to consider is that too many hard surfaces in a property can make it feel hollow or echoey. Carpet in the bedrooms breaks this up and helps give a more homely and inviting perception.

From a design perspective, it is also good to introduce a bit of 'interest' by having two different floor coverings (no more than this in a unit especially) throughout.

Hope that's helpful.

Hi,

I can't help you with a 'formula' but I can highly recommend a basic reno to not only increase yield, but also increase equity in the property.

Many of my clients spend less than $10k-$15k on a reno and usually increase the value of the property by at least triple that. Actually I had a client a few years back who, when I told them how to reno their property, increased the value of it from (purchase price) $270k to $375k in just under a month. Granted, they bought well… but they also renovated well. They also increased their weekly income from that property by $135 per week from $240 to $375/week (they installed some whitegoods which helped increase the rental).

You'll find that renovating the interior will generally increase yield and renovating the exterior you will generally increase equity in the property. You are in the fortunate position of being able to renovate the entire exterior without having to compromise with other unit owners – which is an excellent position to be in especially if you're looking to manufacture growth in the property (and not necessarily have to wait for capital growth).

I usually recommend my investor clients spend no more than 5-7% of the pre-renovation property value – and you can certainly make a big enough change to a property within this budget. This is a fairly good way of making sure you don't over-capitalise which many investors/renovators are prone to do.

I hope that helps in some way.

Although it's a pain (and sometimes a costly or lengthy process), I think it is always better to 'do it once, do it right' when renovating. If you need approval from council then definitely get it. Short cuts may cost you in the long run as the others have said.

Also, consider that if anything happens and you need to claim on your insurance, unauthorised work may compromise the claim.

Cheers,

Jane Eyles-Bennett
Hotspace Consultants – Renovation Guidance for Property Investors
http://www.HotspaceConsultants.com

Hi Mocckie,

You may also be interested in some e-Books I have written for renovators of investment properties (Cherie Barber has actually purchased all of them!!!).

These are based on my 17 years of experience as a designer and working in the renovation/construction industry.

A really great resource for anyone wanting to reno for profit.

More info on my website – http://www.HotspaceConsultants.com

Try a crowd called Thermoglaze – http://www.thermoglaze.com.au

They do tile resurfacing so perhaps they can help.

Cheers,
Jane – renovations designer
(www.HotspaceConsultants.com)