Hey Guys,
Sorry about this post by I need some urgent ball park figures by tomorrow.
I'm looking at a house thats cheap, however it needs extensive work.
This is my first reno project, however the house is also in my home town so I have good tradie contacts.
Now, the house needs restumping so I know i'll be up for 17k there.
It's a 3 bedroom weatherboard with the hot water in the roof.Now, cladding is old but paint should suffice.
I need ballpark figures for the following items
Preferably prices for materials and another for labour, however even estimates from some renos you have done will give me an idea.This is what I've allowed
Renovation Costs Re-Stumping $ 17,000.00 Plastering $ 6,000.00 Re-wiring $ 5,000.00 Painting $ 2,000.00 Shed/carport $ 7,500.00 Asbestos $ 2,000.00 Landscaping $ 5,000.00 Roof (painting and guttering) $ 2,000.00 Hot water $ 2,000.00 Carpet $ 5,000.00 Kitchen $ 5,000.00 bathroom $ 2,000.00 Windows $ 10,000.00 Old shed out the back has some asbestos in it. timber window frames are shot. hot water works but it cactus.
kitchen i plan on buying second hand off ebay. bathroom just some tiles, a vanity, toilet and cheap shower. everything will be budget stuff. i will take a week off work and work full time on what i can.Can you guys let me know if this is enough for each item? I can get about 45k ontop of the home loan to do rewiring, painting and plaster and restumping and maybe kitchen, get revalued to get a bit more. as im buying dirt cheap even the council valuation is 30% higher than the sale price and all the other houses in the street are double the sale price.
Anyway, if you could let me know if any of my estimates are grossly under i would greatly appreciate it.
Cheers,
HaydnI wish you the best with this one, its a real tough one to answer without knowing the house or area.
My only advice is to have amount allocated to contingency.
Depending on the nature of the project, usually between 5% and 25% of the total budget. If you are renovating a relatively modern home for profit and it’s just been neglected, then you can set contingency at the lower end of the scale. It’s likely that most of your work will be decorating and re-fitting rather than major alterations. Sounds like you have quite a bit more planned for this one. You are a braver man than I but "fortune favours the brave" so good on you.
Sorry for being off topic. Just concerning when someone gets what seems to be such a good bargain. Hopefully it is and I hope someone has some more "on topic" answers for you.
Danno11I would also be asking how much research you have done on the property – WHY is it 30% cheaper – if you have gone ahead and put a contract on it, you have 21 days (your finance clause) to sus out – you also mention a LONG list on reno requirements, then say you are going to take 'a week' off work – what you have listed is a lot more than a weeks work!!! We have just done a substaintial reno in a mining town – took 6 weeks, and we are very fast; and cost close to $80k – for instance, our bill at the local hardware for 'incidentals' was over $10k – it certainly adds up!
you mention 'bathroom just some tiles, a vanity, toilet and cheap shower.' – and use the word 'just' in the sentence – sounds like 'just' a complete bathroom reno to me!!!
as long as you have the time, and no pressure, you can do anything – after 3 reno's, I still double the labour times given, as that is the cost that is so variable – you can price the basics like 'the shower/vanity/toilet cistern' etc, but just how long each job takes, and the variables in each job is the uncertainty.
you need to go 'room by room' on a spreadsheet, costing basic items and estimating time taken to do each job – then double the labour component, and if the final figure is still within the ball park, go for it!!!If I read this right?
You are going to try and renovate a property that you have bought for 30% under unimproved value of the land determined by council? And spend $70k+ on renovations, plus 1 week labour from yourself (50hrs x $50/hr = $2500), plus 10-20% contingency = $100k?
You would be better off levering off the equity already from the land valuation, and using the borrowing capacity that you obiously have to renovate – to knock the house down and build a new, small similar style home that wouldnt be a standout in the street.
A renovation like this, as mentioned above, would be a full scale operation and would require probably 10 weeks work. I say this as you cannot have 5+ trades working at the same time – there is a particular order they must come in and work at, with several trades required for a second visit after other trades have done thier bit. If you have not much experience in organisation of renovation/building projects you will have some troubles getting trades to come back to do the last small fiddly bits.
Some of your costs mentioed above seem reasonable, but some may be a little off the mark. For example – bathroom/kitchen renovations can blow out extremely as you may discover costly plumbing issues that are sight unseen. Restumping can also have its pitfalls as they generally have to re-engineer footings to comply with standards today. Also electricians, depending on who you get might not even touch your property if the current wiring is poor, and will demand to do a whole house rewire as they have to put thier name against it as being completely safe, even vouching for past trade practices on the house.
I know its exciting to find a 'bargain', but sometimes that could cost you more in the long run. Ask yourself is it worth the stress to make this work when there may be a more appropriate property out there for your skills? How much do you think you stand to make (% wise) on immidiate capital growth so you can move onto the next purchase?
Just my 2c
pinkboyThanks a lot guys. Nah unimproved value was 39k, improved value was 100 and i coulda picked it up for about 70. Most houses in the street are worth about 150k max of 180 and rent for 200 so building a new place, even a bond transportable home would not quite work.
It’s a town of 15000 people that is growing. I have mates there who are plaster, carpet, electrician, glazier and carpetner. I am also a structural engineer so doing the footings is no issue.
The original plan was to buy for 70, spend 50, reval at 150 and rent out for 200 return of approx 8.5%. However when my pop looked at it for me (cuz I live in melb now) he said it needed a bit more thAn the realestate agent said.
So I woulda needed to buy it for 50k if the renos were gunna cost 70k to get 8.5%.
With the week off, I would organize the stumping, wiring and plastering to be done before I got there, then work from sat one weekend till Sunday the next. Know plenty of people who could help and my bro could also help out during the week.in the end I didn’t end up going for it. Missus was a bit scared of doing something this big as a first project. And as you guys all said, you can plan and plan and plan but it’s
still likely to blow out time and costwise!
Cheers for the advise guys!! Appreciate itGlad you got an independent person to look at it – as much as I love my agents, their idea of water glimpses is standing on your tippy toes in the 'lavatory' and peeping out a very small window – yes, it is a 'glimpse of the water'…..but…..
One of the secrets of successful renovations is 'disparity of prices' in an area – you don't want to be the price leader, rather the follower – so with others avail at $150k you had disparity, BUT very little room to play considering the cost to do basics is fairly static, regardless of the end value of the house (in the low/mid range I mean) – but, for every deal you don't do you learn something, which in the end is what you want to do – education, education, education – don't get your feet burnt in the first deal thru lack of education!!
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