Forum Replies Created
Hi Linda'
Not to completely HI-JACK Daves site, I read the usual list of books, and purchased reno tool box and Martin Ayles development pack. From this I began to undertand numbers and due diligence? So, after i bought it, I found a designer, who introduced me to an engineer and a surveyor, i researched for sale values, again, and then worked backwards and spoke to agents about my concept plans. ……….. Looking back I got the design 3/4 finished and then starting getting building quotes, risks fluctuated at this point in my experince. 6 quotes came back over a three month wait. 4 were well over, 1 was well under, and 1 was competitive and very easy to work with to reduce my costs without killing the design. So, I found a builder finally, but it was only at that point that the figures really shaped up. Next time now that I have a builder to consult much earlier the production process my goals with regards build costs and what is the right "product" for the area will not be such a guesstimate.
It seems that Dave, maybe I'm wrong here, went with a builder from day 1, this sheds some light on my costs blow outs. But they are different deals, and my inclusions attempted to do something for the environment, my values cost money it seems.
Good luck
Looking forward to the photos Dave.
Terry
Hi Dave great photos really enjoyed this.
I started our first development nine months ago. Building is due to commence in feb 08. I noticed a few questions coming in with regards to costs etc. And I am learning quickly how to reduce costs next time around. Our costs have changed as the project has unfolded not unexpected. I thought I would provide an very rough overview, with anyone who is interested, in what areas costs have changed.
I was in the market for a demoilsh and rebuild development like yours but I came across another deal, the figures worked so we went with it. 1938sqm res 1 country victoria 218k. 1505 sqms to develop plus retaining the front house 200k current value.
So four units to build we decided early on x3 2/2 and x1 3/2. Initally quoted about 110k for the 2/2 and 130k for the 3/2.How things have changed.
To fit four units on the site we redsigned them to be long and narrow.
final build costs
x3 2/2 units 155k each
x1 3/2 185k each
plus minor variations to 642k.Included in these prices
271 meters of 1.8 colour bond fence. x4 gates.
extra exhaust fans
solar tubes
x4 water tanks feeding toliets
23k in paving drives and crt yards.
2×3 storage sheds x4
clothes linesx4
antennas x4
planter boxes x4
bricked letter boxes x4then on top of this.
This property had an open drain which we had intended to fence off, the neighbour objected and we have to finsh the drain 10k.
Re establish sewer line and junction 10k.
Surveyor 5.5k
engineer 5k
designer 3k
land 7k per site ( well under market value). Which is very lucky for us.There are other smaller extras like trees, removing old and replanting new, but nothing more then afew thousand dollars.
So now the project has blown out to cost roughly, and my figures are not 100% finalised as we will get some back from council for water level refunds etc, is around 690k. Which is about 90k over my initial budget.
However,
costs 690k
Valued at 870k (conservatively).
Gives me a margin of about 180k or 60k on each dwelling.There is a allot more back ground info of course. And I'm sure others will crunch these numbers much more accurately. Yet, this is where I am at with my knowledge and experience. The knowledge I have gained has been tremendous I'm learning as I go and like I said earlier my next deal will be very different, perhaps smaller and like yours.
So, I trust someone somewhere will get something from my example, as I have from yours Dave.
Thanks again
Terry
HI everyone’
I’ve laughed at myself reading through this forum stream, as i reflected on the highs and lows of my own reno experiences.
I think it is true though that renos can easily become stressful and its never quite clear why things become stressful until its to late, and the job therafter may seem like hell.
As I’m getting older 33 going on 34, I still enjoy the reno challenge but I do things slower now. Instead of the wall coming down taking two days I let it take three or four. This way I enjoy what I do. I eat good food while working not take away, I allow twice as long at the hardware store, and I now call in tradies and handymen as required, but I co-ordinate when they are working, and I usally get well out of thier way. Family time here.
Anyway all the best I guess if you dont enjoy it you’ll stop renovating.
Hi Fiona’
Tony Maclean @ Mack and Co West Perth has proven to be good for me. Give him a call and arrange an initial consult. 12-months ago I started in a similar situ to you RE structures, etc.
Terry
Hi Longroad
I've recently bought an investment in Bendigo, not sure specific stats, however, Bendigo as recently publicised is the largest and fastest growing in land city in Australia, sure it lags behind melbourne in growth yet the intial prices accroding to my own risk levels are appealing. I think its a matter of finding your right products and sharpening exactly what it is you want to do, it seems many developers are building the cheapest units and asking highest prices so the market I believe is flooded and stagnant with this type of deal, this tends to paint a sorry picture, one thing for sure though, having grown up in Bendigo and asking around what people in the mid-range age groups are saying is that Bendigo is hungry for a modern edge.Young professionals from melb are moving to bendigo and it goes that they ar looking for quality inner city apartments and townhouses. And perhaps newer inner city houses. Anyhow I'm investing over there along these lines there is a lot of local competetion keeping the profit margins tight, anyhow have a look, it could be a stepping stone to other regional areas.
Terry
Ive found Tony Mc Clean at Mack and Co, West Perth to be very good. Not South but does it really matter.
Hi Steve’
Comments from the pest guy provided a bad prognosis.
A full spray of the affected areas is required, removal of carpets and new bedding etc, and then maybe a second spray if they come back.
Yep, I bombed the rooms correctly, it seems the bug bombs establish a layer over the top of the carpet but do not penentrate below the carpet.
IMPORTANT NOTE: My landlords INSURANCE does not cover for wilful damage caused by pests.
Spraying begins tomorrow wish me well.
Terry
Hi Jamie’
I havent got too much to offer with regards to figures for CF+ IP in Bendigo, Marc seems to have covered that part quite well.However, I was born in Bendigo, fam still out Eaglehawk way, and I now live in Perth.
I have recently bought an IP in Bendigo, one comment I wanted to make is that in Bendigo there is a shortgae of rental properties, so rent returns are tipped to grow over the next year or so.
In Eaglehawk a large gold mine is due to open soon or maybe next year. This may create further rental demands out that way.
It was just interesting to see the bendigo, eaglehawk links on this forum.
Good luck with it.
Terry
[hair2]
Hi Wayne’
We manage our own IP.
However, we should have taken more photos of the kitchen laminated bench tops, funny I thought everyone uses chopping boards. I was wrong.
T
Hi
I’m going through the intial phases of our first sub-division unit development.
After consulting with the local council with regards to identifying any reasons or factors which may effect the development, I then contacted a local survey Co, then a local drafting and designer, then a local building Co, who was recommended by the surveyor and designer.
At present the surveyor and the designer are liaising, I am consulting with the designer and the builder is waiting to give a final quote.
The designer is matching our budget, and the builder is making recommendations – whats working and selling in the current local market.
This process has taken 6-weeks so far, I’m sure I’ll get faster at it next time.
Good luck with it.
Terry
[hair2]Thanks for your comments.
Taking another look at it, renting the front house while the subdivsion and development take place sounds much more logical.
And, thanks for the reality check perhaps 12-14 months from begining to end is more likley .
The property is in country Vic, res 1 code.
Terry
I’m wondering, because Mortgage Brokers are regulars on this forum,
my current broker has just cost me 1700 and I am wondering if i should be moving onto someone else.
I wont name this broker, the situation is this – ANZ direct set up a mortgage stemming from equiity. However, the funds went into a current equity manager which put us in credit meaning we were paying interest immediaelty on the new mortgage before evening purchasing anything. Wrong move Mr Christian Pino or was it a smart move I wonder.
I advised my broker who advised he could fix that drainage immediately. Great we thought. We went ahead over the next four weeks spending some here and there 23k.
Then the broker advised that our mortgage was credit critical, he had’nt fixed the leak , and we had’nt the funds to bring it back to balance, we have now headed into a restructure process, across three lines.
It seems the restructure amounts to a new application, and I’m wondering if my broker is cashing in on us. The 1700 was in extra interest fees.
At present we are left waiting with a settlement due in 4 weeks.
What do think of this ?
Hi Luke’
Similar to you I’ve decided to learn the development strategy. Learning is the key term here, I also read widely yet still needed to develop my own formula, with a reno on the front the formula in the Reno toolbox was a good start, it seems to me and others might want to educate me, it basically comes down to land value and finding the right location, which is perhaps the same thing.
How much does it cost to build a unit? Many phone calls will yeild answers, depending on your targets and locations. You need examples etc.
I know from direct experience how much it costs in Perth to build one unit, but in the Melb market prices and build times are very different.
My rough formula works on the basis that after reno-resale land is either at best free or costing 20% of land value and that is still calculating 10% profit on the front reno.
Probably not much help but at least another forum to my tally.
good luck. [hair2]
Hi
two years back I used Oasis Patios, Cannington, [hair2]they worked well with the Vic Park council and alls well, no leaks.
Terry
Hi Jamie’
I agree with your comments in that building a team of tradesmen is one of the unknown factors at present and will take time.. Holding money back until the confidence has grown following the first project – my stress and anxiety is already easing.
Thanks for the tips.
T [hair2]
Hi we are having some success with this rental option, we manage the property ourselves, we provide a cleaner plus utilities, locks on each bedroom door plus bar fridges in each room.
We now have a blend of students and fly in – fly out renters. It’s working well for us in Perth.
One thing which has made it easier though was in each rental we requested that the household nominate a single contact tenant who effectilvey acts as a the head of the house, I’m sure the tenants don’t term it that way, yet this arrangement works very well when one or two tenants leave and the contact tenant screens the new applicants in condsideration as to whom they would best get along with.
Working on more just this this. [hair2]
