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Renovation Rescue – Day 6

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Day 6 of the renovation was shaping up to be a big one from the beginning. I overlooked mentioning yesterday that I decided to put the carpet up for sale online and actually had a bite. Unfortunately I had only pulled up the carpet in the bedroom so still had the lounge carpet to tear up. As an interlude before I continue, it reminded me of this video…

https://www.youtube.com/watch?v=UJGksvSzXzs

At 8:30 am I had a call from the purchaser and I still hadn’t torn it up so within about 3 minutes it was pulled up, rolled up and out the front of the house just as the man was walking down the driveway…phew! $20 and 10 minutes later he was driving off with a truck full of 30 year old carpet, there’s obviously a buyer for everything out there.

Today’s other major activity was to have the front windows on the veranda replaced. Although a somewhat unusual arrangement (and probably not original) this glassed in area creates a nice entrance to the house and somewhat of a small sun room at the front. It’s also consistent with all of the other units in the block. Unfortunately although the glass was ok the frame had seen better days and was ready to fall out (check out the photos to see how bad it was). A new window had been measured and ordered a few weeks prior so it was timed to be installed whilst all of the works were being completed. Fortunately the installers were right into it and in no time the old window was out. I gave them a hand to put the new window in (like I know what I’m doing) and they finished it off nicely with some neat flashing around the framework. Whilst I was initially unsure about having this replaced (I thought we’d just get rid of it completely) I’m glad that we did as it looks really good and gives the impression of an additional space attached to the unit. It’s also good as the winters here get pretty cold. I still have a few finishing touches to do here which I’ll complete over the next week and will finish it off nicely.

Finally, it was a really pleasant surprise to get a visit from my long-time friend Ryan who is a much more accomplished renovator than I am (check out he’s work here…yes, I’ve pinched his blogging idea). I greatly appreciated his encouragement and I cannot wait for him to see the finished product next week. The picture of us below shows us highlighting the mystery stains all over the internal brick wall…we have some theories but it may forever remain a mystery.

Tomorrow it’s time to finally put my green thumb to work!

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Renovation Rescue – Day 5

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One thing that I think can really date a place and make it look old and tired are the light fittings. This place had a far from delightful selection including the kitchen fluorescent light that I think looked more suited to a garage, a range of batten fixtures that were starting to disintegrate when you took the globes out and a ceiling fan in the lounge that you could possibly date by cutting it in half and counting the layers of dirt that had built up each year. The other thing that you will notice in older places is that they are not designed for the 21st century lifestyle that constantly needs somewhere to plug in and recharge. The two individual power outlets in the lounge I think will struggle once you need to plug in the phone, laptop, tv, dvd player, PlayStation, lamp, heater, vacuum cleaner, personal foot spa etc, etc. So additional power points are a necessity. A knock on the front door at 8:30 am and in walks my new best friend for the day, Grant the electrician. Within about 10 minutes he had converted the majority of single power points to double outlets instantly improving the ability to power-up once you walk in the front door. Then up the ladder he goes to replace the kitchen fluorescent with a more modern and less intrusive kitchen light. 10 minutes later he’s removed the ceiling fan and is working on removing the wall control for it which is approximately the size of a small European car. A few replacement batten fixtures and he’s finished. Although batten fixtures themselves are not design features, I do like them in an investment property as they give you the flexibility to add whatever addition you like as far as light shades and fixtures go. There is an increasing amount of DIY fitting for batten fixtures and it gives you the option to easily update the look in the future as tastes change.

Whilst this was all going on and my offer to hold the ladder steady for the electrician was politely turned down, I got on with removing the tiles from the kitchen splash-back in preparation for a great new look next week. Fortunately the tiles were either put on in a hurry by a very lazy tiler or age had just worked its magic, as most of them came off easily with some gentle encouragement of just a few choice words. Tiles removed and electrician farewelled, I had a mirror awaiting installation in the bedroom that I purchased the other day. Now one thing I’ve started to notice is that in older places things often shift over the years and things are not always as square as they once were. I noticed this when taking the measurements to place the mirror in the correct position in the bedroom. Once I realised it wasn’t meant to go on the ceiling I installed it above the dresser and I think it looks a great improvement on the original (and smaller one) that was there.

At the end of some days I like to get a taste of what I have planned for the following day. Bedroom almost finished, tomorrow I need to start washing the walls and ceiling in the lounge so I thought I’d do a test patch. With the former owner being a pipe smoker I knew it would be noticeable but wow, I ‘m considering tomorrow bringing along the high pressure hose and just going nuts…if only the floor had drainage holes.

In tomorrow’s exciting installment we’ll see if I can get some poor sod to part with their hard earned money in order to buy 20 square metres of 30 year old carpet!

 

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Renovation Rescue – Day 2

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Day one of the project has been and gone with what seems like not a lot to show for it. Most of it was spent getting supplies and once I get in to Bunnings or Masters it’s difficult to get me out the front door so an hour or two quickly disappeared. Returning to the property laden with supplies such as paint, rollers, cleaning products and the “must do’ for every new property purchase (a new toilet seat) it was time to get cracking. The day flew past getting the place in order to make a solid start and the rubbish bin was soon full. For a vacant property it’s amazing the stuff you can get out of it that you don’t want. Down came old window furnishings, 30 year old lamp shades, cupboard linings, the old toilet seat and a surprising amount of wall hooks, nails and other fasteners that does make you wonder how much stuff (and what) people hang on their walls. The final focus was on the bedroom which is going to be the first quick win with a wash down of the ceiling and walls in readiness for painting which brings us to day two, today!

Ceiling white can work absolute miracles…as far as paint can work miracles. Although I’d washed down the ceiling and walls, the first coat of paint on the ceiling made an amazing difference. Even after just painting about a metre of the cornice I had to stand back and admire the difference. it was all the encouragement I needed to get the first coat on and what a difference! The photos below speak for themselves. Two coats were achieved on the ceiling and then an idea struck. The bedroom wardrobes have sure seen better days and have certainly seen numerous people’s clothes in them over the years. A quick coat of ceiling white (one coat did the trick) and you’ve got a fresh and clean spot to store as may Gucci handbags as you like!

The other great improvement for the day ably completed by my hard working foreman on the job (my father) was to start painting out the window frames. Formerly completed in a colour that can only be achieved by eating some 3 day old takeaway curry that you’ve left out in the sun, a fresh coat of gloss paint that matches the lighter wall colour brought it into this century kicking and screaming. Before you knew it the day was done and it was time to wash out the brushes and plan for day 3 which will involve an ebay purchase that I’m very proud of!

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Renovation Rescue – Getting a head-start

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So after settlement of this property I had a few busy weeks prior to being able to take some solid time off to really sink my teeth into this renovation project and I wasn’t going to be able to spend more than a day at the property. I knew that at the most I could allocate two weeks off from work to get this project done so I was eager to still utilise any time that I had in the lead up to the two weeks in order to make things progress along. The first thing I was going to do was spend the one day that I did have at the property to do some fairly dramatic work in the front garden to prepare it for re-planing with some leafy and low maintenance plants. Getting rid of the un-loved plants that were there and revitalising the soil was my goal for the day, unfortunately 30 years worth of plants didn’t all come out as easy as I first thought. The end result after a lot of hard work provides the blank canvas that I was after however. See below.

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The other thing I wanted to do was to renew the kitchen and bedroom cupboards and drawers with a fresh coat of paint and some new hardware. This was a great job to do on the move so I removed all of the doors and drawers and took them home with me. Even though I was not at the property I was still able to renew all of the doors and drawers which has saved a lot of time since being back at the property. A fresh paint, some modern new handles and a trick I learnt from YouTube to remove paint from old hinges and they are ready to go! I’m pretty chuffed with the before and afters!

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Tomorrow out come the paint brushes!

Renovation Rescue Project – Let’s start!

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So after quite an absence from the blog I’m making a return in a big way for the next few weeks. The last month or two has been busy with the purchase of another property which is ripe for a cosmetic renovation. The one bedroom unit is very basic but has not been lived in for a number of years. Financially it was a great buy and ticks all of the boxes as a promising investment with potentially a good return from rental income as well as being able to manufacture some capital growth with a make-over. I’ll leave the numbers until we’ve completed the renovation and hopefully you’ll see that it’s been worth the effort.

The property is situated within walking distance to supermarkets, pharmacies and take-away food shops as well as very good schools and public transport. It’s situated in a small complex with 3 other units which are well maintained and also have long-term tenants in place. With a bit of hard work I’m confident that this property will scrub up well and prove itself to be a great home. Whilst many investors like to be ‘hands off’ and couldn’t think of anything worse than having to get in and do work themselves (and that’s perfectly ok), I’m really excited about this project as I enjoy seeing what can be achieved with not much money but a good amount of effort!

Let’s take a look through the property at settlement.

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Tune in tomorrow to see what happens when my green thumb get’s a bit out of control!

Property investor expo

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So the home buyer and property investor show has been doing the rounds in Australia this year and heads to Melbourne from August 29-31. Whilst it may not be everyone’s idea of an amazing weekend activity, if you’re eager to learn more about property investment and hear from a range of experts it’s a great opportunity. There are a variety of seminars over the three days that cover topics from mortgages and finance through to depreciation and renovations. And at $18 for an online ticket it just might be some of the best money that you can invest!

http://youtu.be/Dr_orLUQKn8

12 low-cost security ideas for your investment property

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Exciting news!

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In the interests of blatant self promotion I’ve attached the following image…more news to come soon!

IA

The Top Mistakes made by new Property Investors

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Some wise words on things to consider when taking the first step on the property investment ladder!

True Property Victoria's avatartruemelbourne.com.au

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So what do you think the top mistakes are that the newbie property investor makes? Buying the wrong property? Choosing bad tenants?  Well lets see:

 1 – Not pulling the trigger

You keep finding excuses not to buy. The market isn’t right, you don’t have time to devote to searching for the right property, you are worried about making mistakes. Well, there is never a good time, and you will make the odd mistake or two. So don’t panic and just go for it.

2 – You get what you pay for

Buy cheap, get cheap. So you need to go for a well maintained solid property. You don’t have to buy the top of the line properties, but you have to buy a property that isn’t going to kill you on the maintenance costs either.

 3 – It’s not all about rent

A positively geared property is a great…

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Doing the sums #2

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I had some great responses to my post on October 13th about doing the sums when looking at investment properties and how important (and sometimes surprising) it is to get an idea of how much it will cost you to start and also to maintain. I’m always keeping an eye out for great examples so will post them when I come across something which shows a simple and affordable approach.

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This property is a simple one bedroom unit in a complex of 12 units. It’s in a well established suburban area which is well regarded and in the same city as my first example. The area again demonstrates good infrastructure and is close to necessary facilities (shops, hospitals, schools etc). 

On face value the unit appears to be well maintained but of course you would want to inspect not only the property itself but also look around the complex and the units around it. It is for sale for $142,500 and is returning a healthy $190/week. Let’s say that it ticks the boxes as far as the quality and standard of the complex and we manage to get a realistic offer of $140k accepted. What do the figures look like and is it affordable?

How Much Will It Cost Me?
 Property Price – $140,000 Deposit (10%) – $14000 Mortgage – $126,000
Stamp Duty – $3470 Interest Rate – 4.69%
Conveyancing – $800
Mortgage Insurance – $1800
Total Costs (estimated) $20070

Once again, these are the main costs with a deposit of 10%, if you can get to 20% for a deposit the mortgage insurance disappears and the total estimated cost would then be $32,270. So you could get this property for an initial outlay of between $20,070 and $32,270. This is all great but let’s once again look at how you maintain this. Rather than being overly conservative, this time I’ve gone with one of the better interest rates that I can find at the moment of 4.69%

How Much Will It Cost To Service?
 Loan Amount
– $126,000/$112,000		 Council Rates – $900 Rent Income – $190/wk
 Interest Rate – 4.69% Water Rates – $900
 Repayments/Wk (10% deposit)
– $150.50		 Body Corp – $800
 Repayments/Wk (20% deposit)
– $134.00		 Property Mgmt. – $700
 Yearly Repayments – $7826/6968 Yearly Costs – $3300  Rent/Yr – $9880

For a 1 bedroom unit the rent is very good and in a tight rental market this is becoming increasingly realistic. If you started with the 10% deposit you would find yourself out of pocket $1246 a year (or $24 a week). If you managed to pull together the 20% deposit you would be out of pocket $388 a year or less than $7.50 a week! A dollar a day really is loose change! Come tax time and factoring in some depreciation I’d think it could even be likely to end up being cost neutral.

Again remember this is a ‘one moment in time’ scenario and things can change, but even with some unforeseen expenses and the odd maintenance request a property like this has the potential to be a great starter for an investment portfolio!