It’s been a busy few weeks since the last post and I’m pleased to say that everything went well and the property settlement went like clockwork. Although it always seems like a mad rush towards the end with getting all of the paperwork complete it’s great to have a reliable support network around you to ensure that everything happens as it needs to. Between conveyancers, property managers, owners corporations, solicitors and bank lenders the communication happened as it should and last week I collected the keys to the new house. Out of all of those people though it was my parents that eventually saved the day by helping me get the final piece of paperwork through on the day prior to settlement when I was unable to be in town…phew! Although I’ve been in the property investment game for over 14 years it’s still great to have a ‘first’ and last week it was the first time I’ve seen a brand new property built to add to the portfolio. It was so exciting to walk through the front door and have that new house smell (a slightly more expensive fragrance but similar to a new car smell). Everything was where it was meant to be and aside from a few small issues which I expected with a new build, everything was fantastic. The best thing though is to actually see it rather than read about it so check out my grand tour below!
The visit to the building site in February was the last time that we were able to set foot inside the building. From that point on it was a monthly drive past to see what the progress was from the outside and only being able to guess what things were like inside. In early March, progress had continued on the exterior with some of the finishing touches added to the brickwork and roof, as well as the fencing starting to go up. The concreting for the driveway had also gone in and the leveling of the front yard had been done.
Brickwork and facade is complete
The front yard has been levelled out
Driveways have been completed
The supervising team gives their stamp of approval!
A month later in early April on a dreary and rainy Ballarat day it was time for the next sticky beak and things had really progressed to a stage which was getting so close to completion that I could smell it (or it may have just been the smell of the paint drying). The fencing was finished outside, exterior painting was complete, letter boxes were in and even the lawn had been seeded and had started to grow. And for the next month the emphasis was literally on watching the grass grow.
The new lawn is under the water somewhere
Fences and letter boxes are complete
A view up the driveway towards the front of the block
Looking over the fence into the backyard,
Again, one month later at the start of May it was time for another visit and as noted, it was all about watching the grass grow…which it had. Aside from that, the landscaping was completed and it was now time to wait for the official subdivision information to be approved and then a settlement date could be set. Fortunately that didn’t take all that long and FINALLY it brings us to the current day! No more posts about things that happened 6 months ago. Tomorrow I’m visiting the site to have my pre-settlement inspection before the keys finally get exchanged next week (all going well). After 3 months since last stepping through the front door I’ll finally set foot inside to see the finished product. Watch this space in a few days to see what the finished product is like!
The grass has certainly grown!
And there are plants in the garden beds
It’s as good as finished
The communal parking area for guests
The last post saw the property on Boxing Day of 2014 and although it was no showpiece it was exciting to see the frame and roof of the house complete and to get a feel for the space and layout. With the Christmas and New Year break falling right in the middle of summer in Australia the world comes to a grinding halt so I wasn’t expecting work to recommence until the second week of January at the earliest. Still not having commenced the bricklaying and with all of the internal plastering and fit-out still to go I though I’d give it a month after the summer break before I returned back for another look to check out the progress. I was hopeful that the bricklaying would be finished and that internal work would be commencing soon. Not being a tradesman myself I’m clearly no good at estimating how long work takes. To my pleasant surprise when I returned at the start of February 2015 (yes, I’m finally writing about this year!) all of the brick work was complete and things had been firing along at a great speed inside. Now usually in a situation like this people that are not actually building the house (ie: me, Mike, mum and dad) aren’t often allowed on the building site in the off chance that we trip over a hammer or incidents such as this occur (although these seem to be largely based somewhere in Eastern Europe). But the great thing about having parents that will talk to anyone (and always seem to find some connection) is that before you know it the builder is inviting you in and showing you around. Inside, the plaster work was largely complete, the bathroom was coming along with the bath installed and much of the vanity in place, doors were being hung that day and even the majority of the kitchen cabinetry was in. It’s amazing the transformation when you actually have solid walls in place and you are able to walk through rooms. Even the parents were impressed. We left feeling really pleased with the progress and it finally gave me the feeling that the end was in sight.
Looking from the front at the finished brickwork
View from the lounge towards the front door
Looking from the master bedroom to the front of the house
The lounge and dining area
The smallest room in the house
The kitchen cabinets have gone in
Mike and mum evaluating the quality of the workmanship
The bath is in, tiling yet to be complete
The bathroom vanity
The view down the main driveway, our property is to the left of the ute
Part 3 of the new build left us having signed the contracts in December 2013. Now we just sit back and watch the magic happen…or so we thought. Of course a lot of builders and people in construction take a well deserved break over the Christmas and New Year period and there were also permits still in the process so it was anticipated that work would commence (with demolition of the existing home) towards late February/early March 2014. What wasn’t anticipated was the local city council and the delays associated with obtaining a demolition permit to commence the work, closely followed by other delays in getting things signed off so that work could begin. OK, so these things can take time but as the months went by with no visible progress I did start to get concerned. Fortunately the agent put up with my regular calls to see what was going on and reassured me that things were progressing in order to enable works to commence. I know I’m not the only person to sometimes be a touch cynical about what real estate agents tell you so by the time July of 2014 came around I was ready to start building the place myself. You can imagine my relief when I was informed that demolition was commencing and things were starting to move…hooray! It was a useful lesson for me to learn regarding red-tape and associated paperwork and also that when it’s in a larger development you really don’t have much (if any) influence on the speed of the project happening. In August of 2014 the existing house on the block was demolished and work officially commence on-site September 1st 2014, 9 months after we signed on to the project.
By this stage I had started on my Renovation Rescue which had, in part, stemmed from the fact that the new build was taking so long and I was gagging to have another project on the go. Knowing that it would still take considerable time for the construction to be completed I was happy to have the renovation to go on with. Meanwhile back at the building site, temporary fencing, portable toilets, and a site office were initially set up. Then site preparation work involved the removal of existing vegetation from the site. The first stage of construction works on the project were the ‘civil works’. At this stage, all the services were run into the new complex with a deep service trench dug through the common area and the various services including power, gas, water, and telecoms laid in the service trench. Large amounts of rock were encountered during this process, which required special rock breaking machinery to be used which you can see in the attached photos.
Finally though, progress had started. I picked up my paintbrush and went back to the renovation in the hope that now progress would speed up, it certainly did!
The last update about the new build (Part 2) left us hanging after viewing a few examples of the builders work which looked good except unfortunately the development that we looked at just wasn’t quite right as far as the layout and location went. The great thing about real estate though is that there is always plenty more where that came from and after keeping an eye on various developments throughout the year there was one that sparked our interest in early November 2013. The location looked good and the project layout ticked the boxes, so after contacting the agent (a different one to last time) he offered to show us a completed example of the unit and off we went for a look. Now 10 months is a long time and I don’t have the best memory but it wasn’t until we were inside the property having a look (and after a few minutes of déjà vu) that I realised it was exactly the same one we viewed at the start of the year! I probably should have realised this earlier (as they were using the same builder) but nevertheless it was still good to have a reminder of what the property was like and additionally to see what it looked like after someone had been living in it for almost a year. Interestingly, it was good to view the exterior of the property and reflect on how it compared to the original marketing picture vs. the finished product. You certainly wouldn’t class the front lawn as a bowling green (one of the issues I have with seeded lawn rather than roll-out turf) but following up recently (via Google Streetview) the owner has competely changed the front garden anyhow. Check out the pics below.
Having another look confirmed that we were happy with the quality of the product and speaking to a current owner of a very similar property on our visit also helped. After this we then drove to view the development site. Unlike the one earlier in the year, this was a large stand alone block of land (except for an older house soon to be demolished) and it was bordered by a school on one side and a large block with an old historic blue stone house on the other. It was near a lot of local amenities including shops and public transport as well as it being on a secondary road rather than a main arterial road like the one viewed in January. After a few nights sleeping on it (as I’m prone to do) and looking over the sales brochures many, many times, we decided to do the deal and signed up to purchase lot 2 out of the complex. I’ll explain my reasoning for picking this one over all the others in the next post. Check out the pics below of the building site and a few people enjoying seing another sold sticker on a sales board…we do love those sold stickers!
Stay tuned for the next gripping post which could possibly end up with the riveting title of ‘Sit and wait’…
One thing that I always do when looking at any type of new property is to get the camera out and take a lot of photos. It’s great to have a visual reminder of what you’ve seen and with digital it’s also usefull to have dates that the photos were taken. This has been particularly handy when I look back over the time that this new build has been in the pipeline. Amazingly, sifting through photos reminded me that the very first steps on building from scratch were taken over 2 years ago in early 2013. It had been around 12 months since the last property purchase and that’s usually around the time that I start to get itchy feet and think about what the next step could be to expand the portfolio. As I mentioned in the last post there are a number of attractive options about buying off the plan and it was exciting to think about trying something new and learning about the construction process rather than simply another established property. So it was time to get out and see what options were available.
When an agent is marketing a new development they will often have lots of nice glossy brochures with lovely architectural drawings of brand new homes surrounded by lush landscaping and beautiful, well established trees. Whilst these pictures look nice, it’s important to see some real-life examples of similar projects. In January of 2013 I spotted a new project that looked promising and the agent was able to take me to view a similar project (by the same builder) just nearing completion. The new project designs were very similar to the one I was interested in and as you can see from the attached pictures it’s useful to be able to view the finished product from the outside as well as the finishes inside.
Having seen some examples of the finished product it was then time to go and view the proposed site of the development. One thing that is not uncommon in this area is to see older homes on massive blocks of land where the owner sells off the majority of their land to a developer and remains in their original house. This was what this proposed development was and unfortunately I’m just not a fan of it. You end up with a bunch of new homes sitting in what was the back yard of an older house and you have a narrow driveway going down the side to access the residences. Also, the old house in the front of this development wasn’t an architectural masterpiece and the actual location of the development was right on the edge of town. It just wasn’t quite what I was after. The quality of the properties, yes; the location and project layout, unfortunately not.
So although it was back to the drawing board (to an extent) it certainly wasn’t a waste of time. I had a good idea of what you could get for your money, the quality of the product and also what I was after as far as layout of a development.
Fast forward 10 months…
So it’s been a while since I’ve posted a blog about what’s been happening in my world with regards to property. Whilst the major activity for 2014 may have appeared to be the renovation rescue, there was something else going on in the background that had started well before I signed on the dotted line for the reno property; a new place, built from scratch! In late 2013 a new and exciting part of the property journey commenced with contracts signed to build a new 2 bedroom townhouse in a suburb of Ballarat called Sebastopol. All of the properties purchased so far have all been established homes aged between 10 and 40 years old and although they have all been very successful there are certain benefits (and some drawbacks) to buying off the plan and building something new.
- Firstly, you get everything brand new and one would hope that it means things work, it looks modern, attracts good rent and requires minimal maintenance as it has new appliances and services.
- Secondly, a new property brings with it substantial depreciation benefits at tax time. With the older properties you can claim depreciation on the fixtures and fittings within the property (carpets, curtains, heaters etc) but if a property is built after July 1985 then you can also claim depreciation on the actual building itself. This can make a significant difference with your tax return and subsequently how you manage the cash flow on your investment. (Check out this previous post for an overview of depreciation).
- Thirdly, you can manage to save significant money with a reduction in the stamp duty that you pay on the purchase of the property. When purchasing off the plan the stamp duty is calculated on the property value when the contracts are signed. For a property such as this it’s based on a vacant block of land with nothing built on it so is a lot less than if it was an already established home.
- On the flip side, a major drawback with a new build is the amount of time that it takes. The contacts were finalised in December of 2013 for this property and with a scheduled start date of Feb 2014 for building it ended up being pushed into the second half of the year due to demolition issues with a house that was already on the land. The anticipated settlement is April/ May of this year (I’m expecting May).
- Another thing that would work for some and not others is that you have little (practically none at all) scope to make any alterations to the design of the property itself. I certainly don’t mind though as it’s a good design and a build for investment, not to live in. That said, you do get a selection of interior options regarding cabinetry, paint, carpets etc.
So activity started in the second half of 2014 and I’ve been regularly stalking the builders to track progress. Keep an eye on future posts to see how the build progressed and if it looks anything like the pictures above!
Always a sucker for some celebrity real estate, I was interested to see something close to home. Actor Daniel Radcliffe purchased in the local blue-chip suburb of Toorak in 2005. Radcliffe’s parents reportedly spotted the apartment while looking at Australian property on the internet in London. The home was transferred to Radcliffe when he was 18, in 2007. The flat at 98B St Georges Road is expected to sell for about $2.5 million reflecting a respectable capital gain on the speculated $1.9 million the Radcliffes paid in January 2005. The three bedroom apartment is one of two in the development, occupying the complex’s entire upper level. The apartment is accessible by lift and has views of the city skyline, the Yarra river and Hogwarts.
The promotional video below gives an idea of the boy-wizard’s digs.
After sorting through over 600 photos I have pulled together a few of the first and last ones to show some great before and after shots from the renovation. I hope that it provides an idea of the amount of work that was put in and the significant impact that a short-term cosmetic renovation can make on a place. Also, great news from yesterday is that we already have a tenant signed up to move in! I’m taking it as a good sign that in less than a week of being posted online and after the first inspection someone was immediately willing to sign up. Fingers crossed it all goes well. Enjoy the before and after shots!
After almost 3 weeks of work the renovation is now complete. Today I walked out of the property for the last time and I was incredibly proud of the transformation that has taken place over the course of 19 days. Starting with a property that really needed a lot of love, the place is now completely revived and livable. The last day was all about finishing off small jobs and the biggest job was packing up and removing all of the tools and equipment that had gathered in the place over the last few weeks. It’s amazing how invested you become in every element of the work being done and while there are still some things I would have liked to do I had to draw the line somewhere and call it finished. I thought that I may have been sad when I left today as there has been a huge amount of hard work and sweat put into the place but I was just really pleased with the end result and now it’s time for someone else to enjoy it.
I could not have done the job in the time that it was done without the never ceasing help from my father (and I can’t forget mum as well in keeping the team going throughout the project). More than just the foreman, he kept me sane throughout when I was about to have a meltdown over things such as a dodgy hinge or an ill fitting door handle (yes, I need to chill out). I continued to learn a huge amount from him and may have just taught him an odd new thing or two as well (he was skeptical with the bench tops but amazed with how well it worked out). My advice if you ever take on a project like this is to make sure you have a great support team, it really made this a much more enjoyable project.
I won’t ramble on but wanted to say a big thank you to everyone that has followed the work for the last few weeks, I continue to appreciate all of the great feedback. This week I’ll sit down with a calculator and do the sums. I’m really looking forward to presenting the numbers to you all and showing that it really doesn’t take much to pull off a very successful project with property investment. The property is now open for inspection and the first few prospective tenants are inspecting the place tomorrow, wish me luck!
This week I’ll be putting up a post specifically with before and after shots as I’ve had a few requests and I also love to see how the place has transformed. Clicking the original sale listing will give you a taste. But for now I’ll leave you with my final tour though 4/11 Vale St.