Hi,
First time I have started a topic before. Lots of great info on here!
I am looking to buy a 1950s fibro ex commission charmer in Geelong. Looks tired but structurally sound. Planning on covering deposit and costs with equity from another property LOC. My (ambitious) cunning plan is to buy below market value, give it a facelift hopefully manufacturing some equity during settlement period (under a license agreement to get access before settlement). After settlement seek revalue from bank to increase IP mortgage to 80% of new value and pay down LOC (to start the next project with).
My question is around Reno ideas to impress the valuers without spending masses of dough (hoping to stay uner $10k). I will do all of the work myself. What are the main things valuers look at?
-Is street appeal important? Should I paint the outside (faded and a bit rough in spots),
– is the fence important? Currently a wire panel thing. Or front gardens?
– are bathroom and kitchen the most important things that they look for? Both dated but functional.
– floors are stained boards and look good.
– inside needs painting and will do this
– what about window dressings?Any help appreciated.
Craig
May I ask where in Geelong this property is located? (ie which suburb?) Not all suburbs are equal. What will achieve results in one suburb will be pointless in another. Based on what you've mentioned about the fence I've got a fair idea, but easier just to ask.
Jacqui Middleton | Middleton Buyers Advocates
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The up and coming norlane!
First and foremost be extremely careful renovating fibro homes as many are full asbestos. Here is what I would do with a $10k budget:
1. Bathroom – $3,000
2. Kitchen – $5,000
3. Painting – $500 (if you know a builder you can get trade prices rather than retail)
4. Replace all internal and Front Doors (if needed) – $500
5. Upgrade light fittings (if needed) – $800
5. Take wife out for Dinner – $200
The above figures are for average room sizes.
Regards
Shahin
TheFinanceShop | Elite Property Finance
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Thought so.
Speaking generally, street appeal is very important, as is cleanliness, light and brightness, and land size. Tidiness of garden is something that can happen without much expenditure at all. Updated kitchen and bathrooms of course add value. Wire fences are a giveaway of what kind of property hides behind the mask of a renovation, but fibro is also a giveway, as are the houses next door which the owners may or may not ever bother to polish up with a reno.
You will need to run your numbers very very carefully if you are intent on renovating a fibro in Norlane. Wherever you are looking, you need to be very certain that the price differentials between renovated and unrenovated properties are sufficient to bother. And don't forget the stamp duty you have to pay to get into the deal. So realistically, let's say you buy a $200k house, you fork out say $7k in stamp duty and $10k in a reno, you've already spent $217k. If renovated properties only fetch $220k, it is really not worth the bother.
I'd encourage you to look around a few suburbs and run your numbers very carefully.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
The last major reno we carried out was a 3 bedroom place and we spent about $15k – including new flooring, paint, kitchen updated, window and light fittings and external render.
Homemade – Jac M knows the area. Probably wouldn't be a bad idea to PM/email her for assistance.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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Thanks shahin,
Fish n chips are only $30, so I might get better light fittings instead!!
If you have time up your hands and obviously a bit handy. Obviously ex housing fibro homes very easy to pick that its a fibro. You could spend 1k on 30-40 sheets of blueboard (hardiflex, villaboard etc) blueboard the entire outside of the house, then use 20 buckets of cement render and render the whole thing. 3k total spend. honestly some people cannot tell that used to be a fibro if done correctly, they tap the external walls and it sounds solid and the people that can tell are just impressed that they can live in the only rendered house on a street full of fibros. id say the time on that would take at least a full week if you have not done it before or you have lots of ledges,window seals, window openings.
a
Norlane is a big no no for me. Finding a decent tenant in a newly renovated house would be as difficult as trying to convince freckle that the world ain’t that bad.
I agree Joe. Everyone rushes into Norlane because it is cheap, not realising that the costs of subdividing and so on will erode profits and cause a loss.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Homemade wrote:Thanks shahin,Fish n chips are only $30, so I might get better light fittings instead!!
lol – now you're thinking! Just grab some frozen stuff from Woolies- but back another $10
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]
Just when I thought I was on the right track….
Thanks for the comments all.
I began looking in Norlane around 2000 and decided an unrenovated 2 bedder on 600 sqM land (ie the lower quartile) at $60k was too expensive.
I revisited in 2007 and prices were then around $115k and bought a few, renovated around $10k and rented $120 pw. I should have bought in 2000!
I have since bought a few more and sold some in Norlane. Tenants have ranged from good (one bought the house) to not good (evicted and lost around $1000 in rent and repairs).
Currently an unrenovated 2 bedder costs around $170k and 3 bedder $180k. Stamp duty is a pain but it is a progressive tax so relatively cheaper on cheap homes. For investors SD is $2870 on 1st $130k +6% thereafter reducing to 5.5% after $960k. So $4670 on $160k + another $512 for registration.
Invest a further $10-15k renovating bathroom, kitchen, repainting, polish floors, landscaping, etc but no structural renovations and avoid asbestos roofs ($9+k to remove and replace with colorbond) and rent for $230-$240 pw (extra $10 for 3 bedder). Rates and water around $1600 pa.
Not sure what NewNorlane will do (google it) but I think it is positive to help gentrify Norlane in the medium term.
As for growth: prices have been stagnant with a median around $195-200k for past 2 years …… but Melbourne has been stagnant too (possibly down 5%). But Norlane is the cheapest suburb in Melbourne and/or major Victorian cities. It is close to the bay, 8k from Geelong and 50k from Melbourne. It is somewhat an industrial area and at the lower socio-economic range …….. but 35 years ago I lived in South Melbourne and looked across to Port Melbourne and though "who would want to live there?".
Dear Homemade, JacM and Jalugera
I've done a few in Norlane as well.
TLC renovation on existing 3BR home and subdivision.
Selling the land to a builder via architect/draftee contacts. (Cuts out RE agent commission/advertising)
It is a very low entry price and minimises risk of loss.
Of course it also minimises the amount of your return.
To date havn't lost a buck and it is a great way to start.
Recently made $20k after all the dust had settled on a unit in Solar Drive Whittington, which arguably eclipses Norlane & Frankston in the undesirable stakes.
Get educated.
Get your team together.
Do your due diligence.
Get started.
Regards
Im doing a similar thing in Tas at the moment. If you plan to sell for quick profit also keep in mind real estate fees. I know with my place it cost me 15k in buying costs and will cost approx 10k in selling fees. Thats 25k i need to get back in profit on top of reno costs.
Cheers
Pagey
I like this suggestion, Really good Idea. I heard that this product http://www.rockcote.com.au/ranges/coloured-acrylic-renders can save time because it is already coloured so no need to paint.
NickH
Homemade you should have a talk with Jacm she knows the area like the back of her hand and is really great with her knowledge and ethics you would not find a better person to deal with than Jacqui for that area
Nigel Kibel | Property Know How
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Frankston is undesirable?
Pretty much the worst stereotype in Australia tbh.
Fantastic public transport, on the beach, freeways running straight into Melbourne, on the entry to the Mornington Penninsula.
I don't think there are any $6,000,000 property's in Norlane, but there are in parts of Frankston.
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