So many people have been asking lately about how one can renovate a property so cheap… I thought I would share some realistic ways to lower the renovation expenses on your next deal!
How much would a bathroom or kitchen cost typically?? $6,000? $8,000? $10,000? $12,000? $15,000 each?
Break it down to the bite size pieces….
As an investor, your goals should be to make money from your renovations via equity gains and increased cash flow.
In reality you want to get a return of 40%pa on your reno costs and capital appreciation of 200%. Does this mean you need to personally do the work? No. You’re role as a serious investor is to treat your investing and renovations as a business. Do you walk into a publically listed company and see the CEO cleaning the floors, making burgers, and packing shelves? At one point this may have been the case but their plan sets them apart from the rest and you should be treating your property investing just the same. Planning your renovations; structuring your trades, services, and materials is where you’re money is to be made as most people pay a bathroom company $10,000 for bathroom or kitchen company $10,000 for kitchen, you could project manage this for lot less without actually doing the work.
How cheap can you do a bathroom? A kitchen? Flooring? Painting?
– New bathroom $3,000 – $4,000
– New kitchen $3,000 – $4,000
– Painting $2,000 – $3,000
– Flooring $1,500 – $2,000
Why? How? Let’s look at the numbers. The kitchen is a pile of cupboards, a few tiles, a few appliances, and some labour. How long does an install take? 2, or 3 days? Now the cupboards cost between $750 – $2,000, the appliances $550 – $800, tiles $50, and 3 days tradesperson labour (is $250 a day ok for a tradesman? Let’s say a wage of $1,000 to be fair for 3 days work) this is $3,000 for a basic kitchen or $4,000 for a more luxurious kitchen.
What does a bathroom have to it? 10 sheets of wall and roof lining $300, skip bin $140, floor tiles 5m x $20 = $100, wall tiles 20m x $20m = $400, adhesives and waterproofing $250 – $300, shower recess $300, taps and fixtures $250, vanity $300, toilet $150, misc $150 = $2090 + Labour. How long would it take to do a bathroom? 3-5 days? Once again, labour should be around $1,000 – $1,500 for 3-5 days. Therefore a total cost of around $3,500.
As you can see when you break a renovation down and you pay the tradesperson well you can make your money. This is not always the case to pay and you need to look at the outcome from any approach you take as some scenarios will be more advantageous paying a set fee or paying by the day or hour.
Next time you do a renovation, or think of making one, do your numbers, do your research, and do your due diligence. There is big money to be had from renovations and there are big ways to save money from renovations. Remember; A dollar saved is $2 earnt. – How much would you need to earn to replace a $5000 – $10000 saving?
http://binvested.com.au/how-to-maximise-your-renovations-to-maximise-your-results/
how can you do these as you are suggesting, when:
1. tiling labor cost just to tile an area where a standard bathtub was removed , I was given two quotes by tilers for $1500 and $1900?2. plumbing labor cost just to close off kitchen drainage, faucets, install new sinks, faucets, install new dishwasher and new oven and cooktop , I was charged $750 for which the plumber thinks it was a bargain? These were done without moving any of the plumbing placements/sites during a kitchen reno.
3. plumbing labor and material cost to replace tub and drain of bathtub, by making a hole in a brick sidewall and covering it up afterwards with a painted metal, cost me $550.
4. Ikea kitchen install for a small U shaped kitchen around 3 sq. meter size with base and wall cabinets was $2430
5. rangehood install was $600; electrician labor for this ktchen reno was $1124 ( almost did the same thing as the plumber did) ; tiling of kitchen wall only $650 ( and this was crappy workmanship, I was told , with uneven messy grouting and this is the cheapes quote, that is why, i was told );
Unless you have a group of mates as tradespeople, I dont think your statements are achievable in the real world.
The plumber rebuked me for trying to ask for a reduced price.
I read somewhere in the internet, that tradespeople will charge you whatever they think you can afford, even if they are mistaken about how much you can afford. As soon as they looked at your home or as soon as they know you are renovating your kitchen, or as soon as they know you live in a well-off suburb ( even if you are only low income, surviving, scraping along and you had bought your home way back when it was still cheap and you can be just lucky that your home /suburb has appreciated and you are now c onsidered ' asset-rich, – by luck, and cash-poor", they dont care, they will charge you what they think you can afford, they will not care whether you can actually afford it or not. You have to wait for some rare tradeperson who will not be dumb enough to assume about your financial position and really see through , to get an affordable quote.
Hi propertybee,
Good questions, I will elaborate further.
When I first started investing 8 years ago, I use to use sweat equity using my own labour and help from "mates" and family. However I found this was detrimental and stunted growth as you are the handyman, the financier, the ceo, the collector of parts, and the manager of everything and this is before you go to work to earn an income to support the properties and before you search properties or jump the hurdles of banks etc…
I will break down some other options which may be of use from your situation, however please remember that you always need licenced electricians and plumbers and one shouldnt attempt to touch these services on their own. This also doesnt constitute as advice.
how can you do these as you are suggesting, when:
1. tiling labor cost just to tile an area where a standard bathtub was removed , I was given two quotes by tilers for $1500 and $1900?It is a matter of finding the right trades and sometimes tilers are difficult to come across. Learning how to tile is one option but then again it is you the end user doing this and not very efficient. I have had tilers pile a bathroom for $800 and it is important to leave them a clean slate to work with hence having the whole old bathroom cleaned out. Understand how tradies operate and then pay accordingly. Ask the tiler what their day rate is and then say here is the tiles, and make it clear they should have it done in 2-3 days.
If doing the kitchen make sure the kitchen is ready by the time the bathroom is needing to be tiled so they can tile the kitchen in their down time.
If the tradie says $300per day, say ok, well it should take 3 days heres $1200 make sure its done on time.
Another option is finding an all rounder handyman who can tile also which will mean they can paint when not tiling and waiting for glue to dry etc…
2. plumbing labor cost just to close off kitchen drainage, faucets, install new sinks, faucets, install new dishwasher and new oven and cooktop , I was charged $750 for which the plumber thinks it was a bargain? These were done without moving any of the plumbing placements/sites during a kitchen reno.
Plumbers do also have an hourly rate which is around $70 – $100 per hour. It shouldint take more then 2 – 3 hours to fit off wet ares, and also good to get cocvalves installed so you can have these installed with water isolated where you can add mixers etc so you dont need plumber (basically your adding hases to a secondary tap.
3. plumbing labor and material cost to replace tub and drain of bathtub, by making a hole in a brick sidewall and covering it up afterwards with a painted metal, cost me $550. You can get a handyman to do changes such as this.
4. Ikea kitchen install for a small U shaped kitchen around 3 sq. meter size with base and wall cabinets was $2430 – You can buy a straightline kitchen from bunnings off the shelf for $749 ($651 on a builders account) alternatively go to a kitchen manufacturer for more up market such as paradise kitchens in wetherill park or multiple other suppliers out there where you can get a nicer one for $1600 there abouts with granite etc (remember granie means more labour costs). To install a kitchen a tradie/carpenter/handyman can install carcases in one day.
5. rangehood install was $600; electrician labor for this ktchen reno was $1124 ( almost did the same thing as the plumber did) ; tiling of kitchen wall only $650 ( and this was crappy workmanship, I was told , with uneven messy grouting and this is the cheapes quote, that is why, i was told ); Once again a range hood can cost $100 for purchase at harvety norman (I just purchased one yesterday) and these plug into powerpoints. Your electrician can be purcaased for $70-$100per hour.
Your kitchen tiling is usually 3 meters tiles should cost less then $30 per meter (mine are usually $12-17pm) and install of tiler is $40pm usually) or inluded in their day rate.
I have diffent channels I tune into my life, as does everyone does. i wear nice clothes at times and other times I dress in thongs and jeans. If you walk up to a tradie with the attitude of I am a professional investor and this is my property with clipboard and nice car they will take advantage of this. I have 3 vehicles in driveway, and they range from sports car to family car to $600 ute. WHen dealing with trades, I drive the ute and dress for the occasion to avoid this. Quiet often the trades think I am a site manager obverse to the guy with the money who owns the project.
I hope this helps and gives insight to your next reno project.
I have attached link of a property I just had renovated in 7 days for $7000. I paid two guys $2000 each this is $4000.
Kitchen $750, paint $400, bin $250, misc $500, flooring $1100. This is a real reno only shot last week, and I even introduce the ute into the equation
Nathan
p.s. one final note, now days I dont just paint a property, if I am going to paint I use my standard fixtures and fittings throught the whole place and renovate the whole property. The reason being is it all looks new, and commands a better rent and good for adding percived value. Aiding this, I can get the trades to do more work and save time. For example painting a house with cut in can take ages, if they need to cut in around the floor will take an extra day or 2 in care. If I remove the carpet, then painting is quicker saving $500 -$1,000 in labour and then spending that on new floor coverings.
So largely it comes down to having everything ready to go, and then paying an hourly rate to the tradesperson who can get it done correctly for the cheapest price?
Does this mean you do a lot of measuring yourself before starting out? Do you need some specialised knowledge yourself in order to do this right?
Remember one thing also, using kitchen builders or bathroom builders, even plumbers. I know some plumbers that charge a $100 an hour. But you can easily get labour hire for $30 an hour and do the same work. See it might be easier to get 2 labours for 2 days with GST is around $1012 but organize them what to do. They can be used to remove everything from the house instead of paying premium rates.
Also make friends with suppliers (like myself) where you can get products even cheaper. It costs me any basic size home to render for only $5500
JPCCM wrote:It costs me any basic size home to render for only $5500Hi JPCCM
Out of curiosity, how much would it cost to render a basic 100m2 house? Would it include the colour?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
What a great post Nathan! Thanks for putting this up there. I've just started a reno to shift a property of ours that has not sold, this info is great to know. Particularly the bathroom bit. You are right about Bunnings kitchens being a lot cheaper, I'll be keeping some of the existing cabinetry and replacing only the cupboards under the sink, all the handles etc. It's all about keeping what you can and then cheaply replacing what needs it.
Just out of curiosity where is the cheapest place you have found for blinds?
Cheers
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeI fall in a slightly different catergory Jamie M, as my family own building and hardware supplies, but none of the less it still costs me money to purchase products, but just at alot cheaper rate then any bunnings store can offer. Which is most of the time is less then half the value. But I know of a few investors that have made friends with suppliers, and get cost price, but in return getting there trades men creating accounts with the business, its give a little and take a little.
Say to get walls washed and cleaned, and either scarred to apply render. I know of a company (I will not mention but in PM I will) charge around $11 a square meter. Thats you purchasing everything they need. And depending how many men they use. If they use multiple men for the job, find out there price per hour on those men, and then work out a deal on a labour hire company (finding skilled labour) to mix the mud for them instead of paying there guys $40 an hour.
Hi JPCCM
Thanks for the response. Feel free to IM me the details.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
