Thanks Jac!  All goods points again. Once again, I am saying to hubby, "Jac suggested", lol. Well I may not to get to put into practice what I have learned just yet. The owner rejected our first offer, which is not a big surprise. But they seem insistent on not moving on price. The unit went to auction and was passed in, that was 2 months ago. We went to the open house and the only people there was us and the next door neighbor!  They think it is the tenant is making the place look bad. Nothing to do with the 1000 other problems with the place, lol.  

Hello,

Yes, Nathan I have picked up a lot of info and I am very grateful to everyone!  Yes, we have to get it assessed to determine if it is load bearing.  We have a reno "Must do" list and "Nice to do".

Derek,  thanks for posing some great questions.

I will start with saying my research started at state level and drilled down to suburb.  The suburb is within 15km of the CBD, the less expensive step sister to a more highly priced suburb.  The suburb has seen good capital growth in the past 10 years.  With rising demand, the suburb has also seen more houses knocked down and units built on the blocks.  There is also a train station which gets you into the city in short time as well as numerous bus services.  Vacancy rates below 2% and rental returns above 5%.  The suburb is gentrifying.

This property is in a nice pocket of the suburb.  But the property is not in good condition.  If bought at the right price and renovated, the value would increase quite nicely.  I have reviewed area property prices, inspected area units and compared this unit to others in the area.  I know my budget for reno and I know my limit of what I am what pay for the unit based on its current and future value. 

Admittedly renovating skills are low with only painting.  But there are some things that don't require skills that we can do and I have gotten rough estimates for getting other things done.  I know my budget is nowhere near being perfect and I have allowed for a margin of error. 

Improvements are new kitchen, new bathroom, painting, carpets removed and floor boards sanded, 1 door changed.  I would like to remove a wall to open the kitchen up but that is not a deal breaker.  I have estimated the increased value based on comparable units but have taken a more conservative estimate. 

I have put together a timeline how how long it would take and the holding the costs.  I have not nailed it all down because I haven't got the property yet 

But it all comes down to the price that we can negotiate on the property.  If the numbers don't stack up we will walk away.  No sense in over paying for the property. 

Derek your questions have helped me feel a bit better about the putting in an offer because I just realized that I have done a quite a bit of due diligence.  Still scared but I know if it doesn't work out at least I have given it my best effort. 

Now when I can expect you Derek to make a trip to Melbourne for my exciting and extremely fun painting party.  (If I get the property) It will be a BYOP (Bring your own paintbrush) affair. 

Thanks all!

Thanks DWolfe!  I have been looking at auctions and bargain shops to get a feel for prices.  Everything costs more than I initially thought!  But by poking around I have been able to get a better grip on prices. 

I have been looking at prices of renovated houses.  After renovating, our new rental price would put us back at the same yield as it was before the pre-reno investment.  But the value of the property is where I hope to win with the reno.  There is room to reno and push the value up quite a bit but not out of the market for the area.

Dean and Elise reno pack is still available.  I will jump in the end and hope I don't drown!