Adding too much value / my renos

Well not really. But withdrawing money from the ATM today again to pay for some electrical work, I was pondering, am I spending too much money on my IP? The house was originally a 3 bedroom house in western Sydney (St Clair).

The handyman Im using keeps telling me that Im spending too much on the property. Once all done, I'll get a depreciation schedule done so there are some advantages there. But the big question is where does one stop?

So far this is what Ive done

- converted original dining room into 4th bedroom / study
- relocated laundry from behind a kitchen cupboard to a standalone area in the kitchen
- installed a IXL 3 in 1 for the bathroom
- new light fittings in all bedrooms
- new downlights in the kitchen / living area
- new downlights under the front eaves
- new mains powered smoke alarm
- new tap fitted for tank water use (was only plumbed into toilet / old laundry)
- new insulation (only cost was to remove old blow in type insulation)
- 4 new flyscreens and renewal of flyscreen mesh
- raise air conditioner unit (was sitting flat on the concrete path)
- patch various holes etc around the place
- repaint nearly the whole house (due to the renovations)
- new verticals throughout
 
Here are some pictures





 
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I might have done:

- converted original dining room into 4th bedroom / study
- relocated laundry from behind a kitchen cupboard to a standalone area in the kitchen
- new light fittings in all bedrooms
- new downlights in the kitchen / living area
- new downlights under the front eaves
- 4 new flyscreens and renewal of flyscreen mesh
- raise air conditioner unit (was sitting flat on the concrete path)
- patch various holes etc around the place
- repaint nearly the whole house (due to the renovations)
- new verticals throughout

I wouldn't have done:

- installed a IXL 3 in 1 for the bathroom
- new mains powered smoke alarm
- new tap fitted for tank water use (was only plumbed into toilet / old laundry)
- new insulation (only cost was to remove old blow in type insulation)

How much was the house, and how much have you spent so far?
 
The IXL needed replacement as the old one didnt have the exhaust and I wanted to put an exhaust fan. Insulation was $200 to remove old stuff and I didnt want the blow in stuff with the downlights I had installed. No value add there, but would minimise risk of potential fire.

House was $333k and I estimate all up I'd probably $9k or thereabouts. Rental wise, Im hoping an extra $10 at least which is close to 3% increase.
 
House was $333k and I estimate all up I'd probably $9k or thereabouts. Rental wise, Im hoping an extra $10 at least which is close to 3% increase.

I think that's totally fine so far. I once spent $20k on a $140k unit which was too much... but I think you'd be fine spending $20k. It depends a lot though on your area and whether or not $333k was a good price in the first place.
 
I was pondering, am I spending too much money on my IP?

I don't think so, particularly if it makes it more rentable.

It all makes sense to me, my only question is why didn't you base coat the horizontal join when you did around the outsides?:)
 
3 bedrooms and kitchen need new verticals and tracks. The study, lounge and sunroom area need some of the slats replaced.

Yep the curtains are now my drop sheets although blue carpet is pretty bad.
 
The handyman Im using keeps telling me that Im spending too much on the property. Once all done, I'll get a depreciation schedule done so there are some advantages there. But the big question is where does one stop?

I would question whether the handyman is an authority on housing in St Clair. Is he a valuer, an Agent, or even an experienced investor in the area? I would say no. I would, however, question how much he has done for his $9k. It seems kind of expensive for the amount of work done, but maybe I am just very spoilt as we do our own reno's & I know it would cost me a lot less for the same amount of work.

The major thing you have done is create another bedroom. You can not go wrong with adding another bedroom. This would have increased the value quite a bit. Does it have an ensuite? Take a good look around and see what is available (both for sale and rentals) with 4 beds.

Our PPOR is located in St Clair. I have just had it revalued @ $350k. This was only a drive-by valuation and I know that I could easily have got a much larger one, however since the renovation is not finished did not want to even try for a larger valuation as I do not want anyone traipsing through the property yet.

It is 4 beds, but does not have the same street appeal as your house, being a narrow block and the face of the house is just a brick wall with windows, with a car port attached. You have to walk past the cars to enter the front door.

Admittedly, our house does have a few more features than yours, but the valuer can not see this from the roadside.

Hoping around $360pw although I'll need to see what the market is like when its all ready.

I would have thought you could get more than $360pw for it. Tenants in this area will pay a premium for St Clair and usually around $80-$100 more than houses with the same features in the H/C areas. Of course, this means that those that can afford to rent in St Clair are (usually) of a better quality.

I have a vacant 4 bedder that is clean & tidy, but nowhere near as nice as that one, located in Tregear. We have just finished cleaning it up and have started, this week, to allow possible tenants view it. It is a battleaxe block, with no car accommodation. I am asking $300pw.:D
 
I wouldn't have done:
- new mains powered smoke alarm
As an aside, ianvestor, be aware that in QLD, if you're renovating the property, this is now a legal requirement.

We could quibble about whether we would or wouldn't have done individual line items, but none of them are large items, so I won't bother. The overall scope of what you've done doesn't seem excessive to me, at all. Perhaps the handyman is feeling guilty that he's overcharging you. ;)
 
It is only minor reno's Im doing, although I guess I dont want to over capitalise as well.
There are probably some touches Im doing to it that are more a nice have rather than a need.

Not all the money is for the handyman, although getting tradies in and not doing some of the work does make it more expensive. The main tradies involved are the handyman, plumber and electrician.

skater, $360is probably minimum Id want to rent it out for, although it depends on the demand. 3 beddersin St Clair seem to go for $330 - $350 so I think $360 is definately achievable, but may even get more. Time will tell and I'd be interested in how much I could get for it.

There is no ensuite. No where to put one without doing major renovations to the home.
 
As an aside, ianvestor, be aware that in QLD, if you're renovating the property, this is now a legal requirement.

Thanks, I'm hoping to renovate something in the new year and thought I could get away with the battery ones from Crazy Clarks (+ LL insurance!).
 
skater, $360is probably minimum Id want to rent it out for, although it depends on the demand. 3 beddersin St Clair seem to go for $330 - $350 so I think $360 is definately achievable, but may even get more. Time will tell and I'd be interested in how much I could get for it.
.

More than $360 is achievable. Four bedders get a premium. Check out prices for four bedders.
 
More than $360 is achievable. Four bedders get a premium. Check out prices for four bedders.

The 4th bedroom Ive created is a small room so it wont command as high a proper 4 bedroom. I was only thinking worse case, so anything above the $360 amount I'd be happy as anything.
 
The 4th bedroom Ive created is a small room so it wont command as high a proper 4 bedroom. I was only thinking worse case, so anything above the $360 amount I'd be happy as anything.

A lot of the houses in St Clair have quite small bedrooms. Don't let the size influence you.
 
The laundry idea is great. How do you ventilate it?

Extra bedrooms are great as long as you don't lose too much living space.
I wouldn't want a 4 bedder with no dining room. I'm assuming the lounge or kitchen areas are big enough to hold a dining table.

$10 a week more rent isn't a great deal. I'm assuming you've gained more than the $9K you've spent, in equity?
 
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