Hello,
Before placing offer on a residential investment property of interest, where the location looks good for growth, plus rentals are in high demand at present. I am after some advice on cheap cosmetic reno tips and costs.
Am trying to work out the price of a basic rent yield adding /growth value adding cosmetic reno. No building/construction is needed.
Being a 1st time renovator can anyone give me any $ saving tips and a ball park reno costing figure so as to calculate my limit to offer for purchase pls?
The premises is of timber construction with VJ board inside. 3 x bedroom, 1 x lounge/dining, basic semi large kitchen, 1 x bathroom (no bath only shower).
From what I can see to bring up value it needs :
1. A complete internal paint job thru out (is hiring airless spraying gun the go? Have watched YouTube vid demos, is it as easy as they make out?)
2. Floor coverings replaced in all areas. I think carpet for bedrooms and lounge. Whats the cheapest way to do this?
Any other suggestions welcome?
What is the easiest/cheapest floor coverings for kitchen and bathroom?3. Majority of lighting is fluro which looks pretty ordinary. What would be a cheap, effective and easy replacement?
How much roughly does an electrician charge for that?4. Have heard a 'Tub and Tile' repaint of bathroom sink and shower is the go. (is that as simple as Ive heard ? Any other suggestions welcome.)
5. Taps changed in bathroom and kitchen. Is power point and light switch cover replacement a good cheap idea. Do I need an electrician for this?
Beyond doing a garden clean up thats all I think it needs.
Am sorta handy, so should be able to do all of the above except electrical work myself.
If anyone with past knowledge can give me any help with techniques and the rough cost this may set me back thatd be great!
Cheers.
Dave.
G'day Dave,
Sounds like an interesting project.
I'm not the reno guru by any means, but a couple of tips I have come to find true.
1. Make sure you target your end reno product to the demographic who will buy it. For instance, a spraygun approach works if you want the walls and ceilings the same colour, but this is a basic finish for a budget project.
2. Carpet should be slightly cheaper than polished boards, and a lot cheaper than new flooring. Again though, cheap and nasty may impact your end sales price. That said, I think the new carpet smell is even more important than the new carpet!
3. Bunnings have pretty cheep chrome lighting on banisters. Two and three way lights that can be self-installed. These look modern and do the job. I'm using them for the kitchen, bathroom and loungeroom on my current project.
4. Rehabing the shower / bath will be cheaper if you can get away with it. Go for new tap fittings though.
5. You are on the right idea here. New cupboard handles, perhaps even kitchen benchtops. I'm not sure about the powerpoints. Call a local electrician and find out.
Go with mulch for landscaping and a few flowering annuals for colour.
Hope this has helped. When it becomes available see if you can grab a copy of Renovation Toolbox, it will really help you. It's currently out of print but there are moves to do a reprint soon.
Cheers,
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Thank you for your advice Steve,
I think I understand your tip on targeting the correct demographic with the correct level of reno standard. From my words with local property managers it seems that a less costly tidy clean look is suffice for the more blue collar tenants in these streets of the area, since there is more expensive up market housing estates under construction nearby attracting the higher rent paying executive tenant with 4 b'rm 2 bth brand new homes.
From working the calculation techniques from your books, hopefully with a quick repaint and new floor coverings,etc this should reach the 7% rental yeild mark for starters. With hope of rental price increases (due to lack of supply) and the forecasted falling interest rates pushing this yield higher in the future.
My objective initially is not to sell immediately, the main reason for choosing this property is its on a flat 1007 sqm block (with 46m frontage) .The house is built tight close to one side of the land.Leaving about a 25m x 20m clear yard .(Council require minimum of 300sqm per dwelling for strata titles, but is too small for sud divide). Have had meeting with council to confirmed this. What is the downside to resell under strata titles, if any?Also its just inside the commercially zoned area.So if/when growth increases my future plans to acheive the sacred pos geared yield is to keep the house and develop strata titled, either business premises or multi dwellings ( t'houses or a duplex maybe due to extreme lack of supply and high demand for low maintenance smaller size housing).Then sell one or more, and retain the highest rent returning dwelling(s) to fund future buys depending on the sums.
Am pretty tight on the bucks to get this purchase over the line , so will take one step at at time. Have been pre approved with the bank at proviso of the 7% yield is achievable, thus the reno is somewhat essential.The property manager has confirmed she will appraise the rent at the post renoed figure as long as I do do the work. Which I will. So will wait and see what unfolds down the line.
I will certainly do all the things youve kindly advised to hopefully achieve the value top up, (I can smell the new carpet already).
I would very much like to obtain the Renovation Toolbox when it becomes available. Will you advertise its rerelease?One more question (not really reno related tho) which is quite important… Since there is currently a tenant in the premises with another 3.5 mths of their lease remaining on a considerably lower than current market rental figure. Can I if possible request from the vendor an extended settlement date till the tenants vacate, and with an extra 3 weeks also added so as to do the above required reno work and have enough time to advertise at the higher rental price? Is this possible/ethical? How would the offer be worded so as to achieve this?
Again thanx very much for your reply. I hope my words make some level of sense and if theres any further advice you have time to add, it would be greatly appreciated.
Cheers,
Dave.
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