Very First Move

I would think that if you wanted to borrow 80% of the value, then you would need:
20% Deposit- $50 000
Stamp Duty- $7000 approx (depending on your state, you would need to check this)
Conveyancing, Pest and Building Inspection etc- $1000 – $2000
Renovation- It depends on what you want to do, and how much work you would do yourself. Could be as low as $5000 but as much as $30 000 – $40 000 or even more.

So Adding all that up, you would need somewhere between $63 000 and $100 000 (or maybe more), depending on the amount of renovating you are planning on doing. You would also have to factor in holding costs as you would not be getting any rental income when you are renovating, as well as having a safety buffer as well in case anything goes wrong or you have cost blowouts.

Of course you could always buy the house with a lower deposit (say 10% deposit, it might be hard to get 95% LVR finance as it sounds like it is in a rural area).

Cheers,
Luke

If you could get a 90% loan you'd need

10% deposit                      $25,000
Stamp duty (that's for NSW) $8,000
solicitor                              $2,000
LMI                                    $6,000 (at a guess)

 So $41,000 minimum plus reno costs.  You can do a lot for $10,000.  So absolute minimum $50K

AdisKay wrote:

Thanks guys, i found everything said highly useful. Its good to have an idea of what im aiming for. Beautiful. It'l take some time to save this cash so i might aswell dig into this reno course. Seems promising Cheers !!

Hi adiskay

Have you considered paying some mortgage insurance and taking out a loan that requires a smaller deposit? That way, you don't have to spend as much time saving and could potentially kick start your investing sooner. I wrote an article for API on utlising mortgage insurance to get ahead – here's the link

Cheers

Jamie

Another smart thing for you to do if you are a first time renovator is; spend some time understanding how much things cost.

Spend time in Bunnings understanding the cost of plants.  The cost of paint.  How much you need to buy to cover the area you are dealing with.  1 litre of paint covers 1 coat of 12 square metres (eg an area of wall that is 4m x 3m = 12m).  The cost of a new shower base.  A DIY bathroom vanity or laundry trough.  New doorhandles.  Go to tiling stores and understand the cost of tiles.  Mirror and screendoor companies to understand what it costs to replace a shower screen.  Carpet stores.  Cabinet makers for the kitchen cabinetry (if you stick with a basic one it'll work out about the same as attempting to do a Bunnings DIY kitchen but look much better as it is precisely to the size you need – and they'll install it for you too.  Spend time in Spotlight understanding the cost of cheapy blinds and curtains.  You get the idea.  Try to leave all your plumbing connections where they are.  It's costly to move them around.

exactly!

maybe build yourself a little spreadsheet that makes sense to you…. and which helps you figure out costs you definitely know a property will incur in a reno.  and then of course expect the costs to be higher for all the stuff you don't know about

the thing about a reno is, once you start, you kind of have to finish.  so you don't want to run out of cash.  costs you too much in resale value to offload an unfinished property.  it puts people off.  largely because they see unfinished stuff and have no concept of how much effort or money is required to finish it…. so maybe the fear of the unknown makes them assume the worst.