So recently purchased IP (42 william street Cohuna, Vic)
Purchase price; $121,000
Rented currently for; $240PW, $12,480PA
The place is fairly run down and needs a lot of cosmetic work done.
I have a tenant in place but planning on doing a reno in 2 weeks that I estimate I can do all up for under $15,000 fairly easily.
Plan to (pay professionals to do)
-Floor boards whole house Cost; $3000 Time-frame; 1 full day
-Kitchen paint and new table tops Cost; 400+1200 Time-frame; 1 Day
-Bathroom retiled and new shower Cost; 300 (removal day) 1500 Time-frame; 3-4 days
-Toilet retiled and new toliet Cost; 150+900 Time-frame; 2 days
-Paint house interal just one or two coats Cost; 600+150 Time-frame; 2-3 days
Think that should do it and add value and rental return for a low end price.
So the numbers
valuation from $121,000 to 160,000 maybe more
Rental weekly from $240pw to $275pw
cost under $9000 plus 480 loss of rent for two weeks. so lets say $10,000
I think the numbers and plan is fairly possible and realistic.
Love to hear devil advocate or advice or any thoughts.
CheersMarkParticipant@keang2004Join Date: 2017Post Count: 1
Interesting prices there , have you factored in tradesmen labour costs there ?
I have 6 in regional Victoria also , trades may be very hard to come by
Your painting price may be undervalued and maybe some others , have you got quotes ?Tony FlemingParticipant@the-dark-knightJoin Date: 2008Post Count: 396
Agree with the pricing on the paint. I had a regional NSW with the cheapest quote coming in at $4200 for internal walls and skirting only on a 117sqm built house.
Have yet to have quotes, I wanted to post to hear advice, hence the title name.
Interesting tony I will keep you posted on the price for it.
Im torn between doing this now or letting the tenant have a 1year lease.
but I feel this reno increases rental return by $40pw and increases value by $40,000 roughly.
Love to hear opinions
Seems like pretty awesome numbers there Jaxon
I am just going through some videos by Cherie Barber, and she mentions that before any renovations you should obtain an Asbestos Report.
Furthermore, with renovations you should aim to be able to sell for 135% of property value, so in your case $121,000 x 1.35 = $163,350
Have you looked on RP Data to see what similar properties are selling for in the area?
P.S. The formula is based on spending 10% of Property value on Renovations
Thank you Dave, those numbers are actually very close to my perception,
rent change $40
Value increase 120 to 160ish
This week and next week I will be getting every quote and will keep everyone posted on how it goes, things I didn’t see coming etc and once finalised the return, valuation and my feelings.
Thank you for the great advice.
and to clarify, I’m sure Cherie is generalising? as each deal is different.
No worries Jaxon
Cherie mentions there are two types of renovations:
With Cosmetic Renovations you want to spend 10% of Purchase Price and Sell for 135%.
With Structural Renovations you want to spend 40% of Purchase Price and Sell for 185%.
RP Data is probably the best source of information to see what similar properties have sold for in the area in the past 6 months.
If you are interested, I could hook you up to a copy of her course…