Hi all, I'm looking at buying my first property and am mainly interested in the inner western suburbs of Melbourne. Over the past few years this area has been through significant gentrification and has slowly been increasing in value compared to the Melbourne average. Suburbs that were once 70% of the Melbourne average are suddenly 130% of the average today. despite the current stagnation/drop in house prices I still think these areas are good investments over the long term because I believe the area will continue to grow as more and more middle income families replace low income families.
Anyways, my budget is under $400K and a lot of the time the houses that are available in my bracket need some work done to them. To be honest I actually wouldn't mind doing a bit of work on a house as I think I would find the job rewarding and enjoyable.
I'm just wondering whether going ahead with a reno for a first home is a bad idea since I have no experience in the costs or headaches involved with such a project? My parents are advising me against my whole reno idea and saying I should just purchase a brand new property far from the cbd. However, I simply do not like these areas (I may want to live in the IP in the future) and the houses they are recommending have had little capital growth over the past few years. Perhaps this is because they are in new estates with no shortage of new houses being built and the fact that the areas are on the city fringe far from the city and major shopping complexes.
If I do find a property that is reasonably priced, how much will a reno cost? I have some pictures below of a house that is in a Maribyrnong. Do you reckon it might be possible/legal for me to do most of the reno work myself eg. tiling, new bathroom, flatpak kitchen, some plastering, installing a laundry if I have little experience and the house looks as bad as the one below?
I do have heaps of mates that are tradies and can get them to do plumbing connections and electrical work where required but I am hoping to actually do a lot of the hard manual work myself.
Anyone else tried to do a reno mostly on their own? Any feedback would be greatly appreciated.
wow, that needs gutting….by that I mean all walls taken back to studs………looks like asbestos too so it will cost a fortune. also could be foundation issues looking at the cracks…………money pit!
I would look for something else with good bones that is dated.
Hi Skuz
Looks like alot of work, especially if you would like to do the work all yourself with no experience. You need to think about your turn arond time and remember every week its not finished is a week missed out on an income.
As a first reno i would be looking at for something that is more cosmetic.
Its also well and good to have friends in the trade, however everyone has they're own priorities. As a sparky i find that my own friends often commit me to jobs without a lot of notice and especially have no idea on the amount of work it takes to do the job. Make sure this is not the case otherwise this is more time that the property could take to finish without an income.
My reconmendation, if rennovation is the way you want to head, is a working bee, get it over and done with and get tenants in!!
Answer to your question, the cost?? well that depands on what your ideas for the property are. Hearing you mention that the IP could be something you would want to live in, in the future, i hear alarm bells ringing!!!! An IP is an IP. Dont let emotion get in the way, otherwise you a tap fitting or tile that may have been just perfect for a tenant, just cost you small fortune because you wanted something nicer.
That said, rennovating is very rewarding and i wish you the best of luck in your ventures.
David
Hi Skuz
I have to agree with the others on a first time reno.
I have been completing renos and new properties for about 10 years now.
one of theCurrent projects is a subdivsion, including new townhouse next to a 100 yo victorian inner city melbourne which was a part demo, then a complete gut of the house.
Started from stud walls inside , restump, rewire,, plumb,plaster and everything else that goes with it.
The work I have just mentioned I wouldnt complete myself. I did strip the whole house, but there is some jobs you can
do and some you just shouldnt attempt.
following are things you would consider doing yourself like painting, flat pack kitchen as you mentioned, timber archs, skirting and things like that.
To give you an idea of cost, the original five rooms of the victorian were
– restump $11k
– wiring $2300
– plumb $ 2000 (this was to rough in a new bathroom and power room)
– plaster $13 K for original 5 rooms
– new fireplaces,windows, skirting etc etc etc
– new bathroom and power room in one of the old bedrooms $12 k ( this was me doing all the work beyond the replaster, so i did tiling and fitting vanties ,bath etc etc)So there is no change out of $50 k
Then the new extension which is large open plan kitchen,dining etc etc $150 K
So $200 are the costs then repayments and sales costs
So the question you have is
1) is the current floor plan suitable or do you need to extend?
If you need to extend and reno based on the current pictures of your house $200k
2) If you can reno the existing house, but need bathroom and kitchen $75- $100kremember this is you doing a fair bit.
I hope this helps
Hey guys, really appreciate your responses.
My aim is to buy something that does require a basic cosmetic enhancement, however it does expose me to additional competition from other buyers as there will also be a sizeable pool of people that will also be prepared to do the same thing. I have been inspecting properties and researching houses for a few months now and have a fairly good understanding of which properties get snapped up quickly and which ones stay on the market for longer. I think the propery above is definitely a more risky venture considering the uncertainty with repairs involved. I would definitely only buy an older house at a private sale and have it subject to an inspection. I think that would help eliminate some risk and alert me to exactly what needs to be done.
I guess I've always had a passion for undertaking a project like this and hearing success stories from friends about renovations that have resulted in massive profits has just fuelled that passion even further. I would have to agree that perhaps I am putting a bit of emotion into my search but I am not going to let that get in the way of my budget and the returns I expect to get from the property. I actually think that a little bit of emotion is sometimes a good thing as the same emotion might be used by prospective buyers further down the track if I decide to sell the property.
With regards to time/rent lost as a resut of renovating, I am planning on living in the property for the first 6 months since I'll be getting the FHOG and doing all the reno work in that time. That way I suppose I wouldn't be losing any time, unless it took much longer than expected. Thats another thing I would have to factor in. I will have to make sure the job is do-able in 6 months and mostly on weekends as I work full time throughout the week. Will it be possible to claim back the depreciation on the renovation if it is done while it is my PPOR?
After reading all the above i think anything like the above house probably is a bit toooo ambitious for an initial IP and reno. But I am very keen do a bit of work to a place if I think I can add some serious value to the place that exceeds my outgoings. Hopefully doing as much as I can by myself will also help maximise returns.
Do you guys know of any detailed books or resources that can be useful to a person willing to undertake their own renovations? I am just thinking of tiling as an example, I have seen it done many times but I would also want a detailed book or something that can guide me through the process. Also, any books or magazines that go through what other people have done to renovate a house. Something that would expalin the steps involved eg, taking the walls down to studs, getting asbestos removalists is, laying the tiles etc etc. Once again guys, any advice is greatly appreciated.
skuz
offer your services for free to other people doing renos, get work experience
also try to get a job as a trades assistant for a tradie
watch "property ladder" on lifestyle channel
get hold of some reno books
forgot to add
on my reno's I do EVERYTHING. Im a sparky so the most dangerous job is safe for me to do, but others definately should not. As a tradie Ive spent 15 years on job sites watching other trades work, seeing houses as various stages of completion……which definately helps when doing a reno yourself.
I learned about plumbing watching the "how to" channel. Although illegal in Australia (legal in the U.S, UK & NZ) to work on plumbing in your own home, its really quite simple and a valuable trade to learn.I (and others) have written quite a lot about renovating on this forum, do a search and read everything that comes up.
crashy wrote:offer your services for free to other people doing renos, get work experiencealso try to get a job as a trades assistant for a tradie
I've actually thought about doing this but I would be restricted to only working on weekends as I have a full time job throughout the week. Not sure if tradies would even need anyone just on weekends.
I have had a look on seek and other job sites but this kind of work didn't really come up in any of my searches.
Hi Skuz
Wow you probably got 12 months of weekend work there sorry not to sound optimistic but as carpenter and now architect you have some serious issues there all the interior linings need replacing because of the serious mould problem and it would be asbestos for sure once you take off the linings you could probably opening up a can of worms. All wiring would probably have to be replace and by qualified electrician $$$$ a plumber to would have to replaced the pipe work I would say $$$. Maybe the external linings could be salvaged but get it checked out the roof sheeting looks new that's why there is mould on the ceilings. So I guest what I am saying is get a qualified builder to do a assessment on the place before you buy it because it is more than weekend work its serious building works.
Good luck
gday skuz,
I totally agree with your thoughts on the area you are looking at. I live in the area and can tell you the convenience of the freeways, shops and transport is great. The capital growth is bound to be greater than in the new estates.
Externally the house seems to have a nice character to it, and the roof is a bonus, probably save you about $15000.
The weatherboards look to be in pretty good condition for their age, would need a bit of elbow grease from you though, and maybe a few replacements.
Internaly it does require a substantial amount of work. But alot of it is simply striping out the old stuff, which you can do yourself. There may be structural damage but difficult to tell at this stage. Dont assume cracks in plaster mean a serious problem, these houses are very old and are bound to have some movement in their foundations. From the photos i would say you would remove everything except the floor boards. One benefit to stripping the plaster is it allows you to insulate the walls before replastering and gives plumbers and sparkies better access (less cost) for their work.I have noticed a few people make suggestions regarding gaining trade experience through volunteer work. I cant say I agree with this idea, for a number of reasons:
– A little bit of knowledge can be a dangerous thing.
– You are probably better off working weekends earning money in your regular job and using this to pay experienced people to do the work, at least you can get then you can get them to fix any stuff ups.
– Most trade jobs look simple when you watch an experienced tradesman doing it, its not until you hit a snag that you realise it might be better paying someone to do it. eg: watch a pair of plasterers hang a 6 metre ceiling sheet then try to pick one up yourselfNot saying dont have a go at reno work but I have seen the result of many people taking time off from their job and spending three days to do a job a carpenter could have done in one day.
I do advise that you read up on anything to do with building and get advice from numerous sources.
Hi Skuz —
Id have to agree with the general comments on this one. Mould? – Gotta find out what’s causing it. Then, to protect yourself, it should be remediated by a professional (not a handyman with equipped with sugar soap and a hammer). In the States, mould is the kiss of death for a property. We avoid it at all costs.
I hear you on the cosmetic fixers though. Because they’re so ‘easy’ there is more of a demand so the price gets driven up. So to avoid the crowd, you’ve start looking at more problematic properties. I’ve seen ‘fixers’ sell for more than remodeled properties because of sheer ‘potential’ alone! Well, this could very well be your lump of gold, but I would say do the following:
Get as many plumbers, electricians, inspectors, mould experts, foundation experts, etc etc, over to the property as you possibly can and have them give you an estimate on what it will cost to fix it. They will also be able to tell you what’s really going on with the property. Make sure you get these bases covered before you lose any money than absolutely necessary.
In reality, a cosmetic fixer is not a big deal. Hard work? Absolutely. But it doesn’t take a rocket scientist to roll up his/her sleeves and apply paint.
For your first deal, consider hiring a – what we call – general contractor to manage all of your tradespeople during the remodel. You show up everyday and follow him around, poke your head in every job, help out, find out how its done, learn about work flows. Will it cost more? Yes. But, in my opinion, its worth every penny you pay for it.
Oysters don’t learn to make pearls by attending pearl making seminars.
Those are the lessons I learned. I hope this was helpful.
Take care and good luck.
Rachelle
Last thing: The worst thing you can do is do a crappy job. Buyers can see lipstick on a pig from a mile away.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
