HI
First time property owner here.
I have bought a 'house and land' package from one of the big builders down here in Melbourne, with a view to living in it myself for a couple of years and then either selling it for a profit, or renting it out, or renting out some of the rooms, or making some money out of it somehow.
Needless to say I have learned fairly quickly that 'you get what you pay for' and in some cases you get less than what you pay for. The quality of the construction is average.
I am Mr DIY and getting the house up to a good standard will be a lot of fun but, since I am going to treat this place as an investment, I don't want to waste money upgrading, repairing or installing anything which will not add anything to my bottom line. This is not a fancy mansion in Toorak and as much as I would like an astronomy tower or laser defense security system those toys might make the house unsellable / unrentable to the CUBs that live out my way.
This is an average home in a new development in the outer suburbs. There are no trees in the area, and the backyard is small. The house is brick veneer, 3brd 1bth, alum windows, low quality fixtures and fittings, it comes with solar hot water and gas powered central heating. Just like every other property on the street!
Now my question is, what renovations will be worthwhile and what will be a waste of time?
Here are some ideas of my own
– landscape the backyard (wasnt part of the package)
– double glazed windows to better insulate the house from sound and heat
– improve the fixtures – lights, taps and so on
– repair the obviously dodgy installation work (my kitchen cabinetry has been assembled by ten year olds)I would like to differentiate this house from the other cookie cutter clones on my street but I don't want to spend unless these improvements will give me a higher resale value or rental income.
I hope you experienced investors will be able to point me in the right direction.
basically if you are getting a new place the only upgrades should be to fix cosmetic issues, as the house will be new.. it is hard to add value.
Landscape is visual and can increase value if done right…. but make sure you design it for your target market. will they want space? or a garden? etc.double glazed is something that people notice after they have already bought and are living in a place. unless its on a main road and you can use this as a big selling point i wouldnt bother.
fixtures… depends how bad they really are, if they are terrible then yes. if they are fine, just cheap. then i wouldnt bother. it wont add significant value.you want to add more value then the cost of repairs. a new but dodgy kitchen is still worth decent money, the money to make it perfect might not be regained in selling price. but again, depends how bad it looks to begin with. or are they things you just notice because you have been there for a while.
renos should add a selling point to the house, or some desirability, the little things that are less obvious… you wont make your money back on those.
Thanks, I understand what your saying
It looks like I'm going to have to start with the fundamentals – I don't know who my target market is (whoever pays me the largest sum of money) or what they like. Would it be worthwhile speaking to a real estate agent? They would know who buys and who rents in my area.
You do have warranty on the property and although some of the fixtures might be on the cheap side, structurally, I'm sure the house is fine. I would focus on cosmetics as mentioned above.
Landscaping could be good. In my opinion a decking/ covered area (dependant on the size of private open space) reaches a wide target audience and will create and desired structural feature that other package homes don't have.
Need to add a WOW factor to the place, preferably something that will appeal to your target market and then for the best outcome have them bid at auction.
Normally the kitchen I find the best place to add this but it all depends on the current set up. Your target market shouldn't be too hard to work out, think about what sort of person is best suited to living in that area and go from there.
glen
I'm currently living in a similiar style of house, brand new but low quality, and find the biggest issue is the poor quality of the lighting, particulary in the kitchen. If your going to be living in the house for a couple of years as you say then I'd consider it a worthwhile investment. Whether it would increase the value or not I don't know, I personally would perceive it as being of a higher value but then I may not represent the average buyer.
If it has a front yard this is what needs landscaping as it is the first thing buyers see from the street.
If the house is new and much the same as all of the street, then the only thing that might seperate it from the rest is an outdoor entertaing area. Doing work internally will add little value. I think you are probably better off spending as little as possible to make a nice outdoor area. This will only matter really if you sell. You need to put youself in the buyers shoes. Pretend you are going to buy another property in the area, what are you looking for, what would you pay top dollar for. What matters to you? You will probably work out from going into other houses in the area and watching the sale prices what you need to do.
Marty
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