Building our IPs interstate - one down...

Our Point Cook VIC IP is now completed construction, handed over and we have the keys. This is the first house we have built. Should be ready to show tenants next week!

Point Cook house pictures

Now we have the Smithfield Plains SA place (almost finished construction) and the deception bay place (not started yet).

Here's all the details of the Point Cook place for anyone that may be interested.

House is a 2 bedroom plus study "Finch Cottage". Two way bath, seperate toilet, WIR to main bedroom, single carport. Total building contract price was $136,500 with Burbank.

We got included in our contract:

D/washer and Ceiling fans (optional extras), Carpets, Tiles to living areas and corridor, Ducted gas heating, Cottage facade, Window locks, deadlock to front door, Stainless steel gas cooktop, solar hot water (mandatory requirement), mixer taps and shower rail

Building contract didn't include:
Flyscreens ($319), Toilet roll holder, Towel rails, Blinds ($1,600), Landscaping ($6,800), TV Antenna ($140) (although they include the TV point), phone trench ($300), half of fencing to one side ($270), picket gates to front ($1000), sectional door to carport ($1000) and the alarm system we installed ($650).

Block was a cottage block of about 320m, cost $115,000, fencing existed to rear and one side at time of purchase. "H" class block.

Total cost: About $264,000

End value: I don't think it is worth much more than the construction cost at this time, but we saved on stamp duty is some consolation.

Contract date for land: September 2006
Settlement date for land: 20 November 2006
Started pouring slab: Feb 2007
Practical completion inspection: 20 July 2007
Building Settlement date: same day, after some pushing :)

Total trips required to Melbourne from our home in the ACT were two. Once purely to do colour selections after land settlement (they insisted the selections must be done in person). The other trip was to do the practical completion inspection and settlement, and to get installed blinds, flyscreens, alarm, TV antenna, towel rail and toilet roll holder, meet the landscaper, talk to neighbour about fencing, give keys to property manager, get the appliances installed and clean up as best we could. We did this in a six day trip (including two days fully just for travel and one day was a Sunday where we went to the zoo).

Now all that is left is for the fencer to come and do the one length of fencing, the letterbox and clothesline to go in, and the roller door to go in. The place should be advertised next week.

We actually couldn't believe how smoothly the settlement and the following days went. On the 5th day we had the inside ready to go, with blinds, flyscreens, alarm (to protect the place while empty) etc etc. All tradies pre-booked weeks in advance had turned up. Outside, the landscaper had started. The oven and dishwasher was in. I'd cleaned the place up. All that was left on the inside was for the hot water system to be hooked up. It was too good to be true.

Then it happened.... the builder's plumber turns on the hot water system... and finds that woops! he has not connected the pipes in the roof. The carpets are wet, water is running down the walls. All the carpets need to be ripped up and the water sucked out. This will take several days during which time the house is of course not liveable and our PM can't take photos or show tenants through. We have to go back to Canberra first thing in the morning and the house is a mess.

The plumbing stuff up itself didn't really make me angry. I did get angry when I asked the builder to send a cleaner after all the damage (caused by their own plumber) had been fixed. They've refused :mad: Now I have to hire a cleaner and that makes me really mad out of all proportion to the cost involved!

I was busy stressing over the plumbing stuff up and I forgot to write down the serial numbers of the appliances for the warranty cards. I don't know if that matters, who ever sends those things off anyway?

I did intend to get the place inspected at each stage by a building inspector. But in the end, I just didn't bother and hoped the place was actually getting built as I payed each progress payment. However, the bank does do a valuation at the lock up stage (depending on the bank), and I had other contractors such as the landscaper visit the property so I was pretty confident that there was actually a house there.

Lessons learned for building IPs:

Get an outdoor powerpoint if only so that you don't have the hassle of your fencer etc needing access to the house just so they can get power.

Installing towel rails and toilet roll holders can be a half day job! If you are not good at that stuff ask for them to be included in the contract.

Don't even bother about imperfections in the paintwork. It isn't worth it...

After settlement when they install the appliances, the place will look like a bomb hit it. Don't bother cleaning up beforehand, and see previous point re paintwork.

Get your blinds check measured and ordered about 2-3 weeks before the completion date.

Check your insurance covers you whilst the place is empty waiting for a tenant.

Don't expect any of your provisional sums back even if you thought they allowed for worst case scenario.

There is no way in the world that your bank can pay the progress payment within the time frame set in the building contract. In fact, it takes them that long just to pick the thing up off their fax machine. However, I wasn't charged any penalty interest by Burbank :)

PS This post may have been too long, but then why are you still reading?
 
Our Point Cook VIC IP is now completed construction, handed over and we have the keys. This is the first house we have built. Should be ready to show tenants next week!

House is a 2 bedroom plus study "Finch Cottage". Two way bath, seperate toilet, WIR to main bedroom, single carport. Total building contract price was $136,500 with Burbank.

Block was a cottage block of about 320m, cost $115,000, fencing existed to rear and one side at time of purchase. "H" class block.

Total cost: About $264,000

poppy - well done for making the first effort (always the hardest) and posting the details. I had seen those types of houses in Point Cook and had wondered about them. A bit of Footscray West or Yarraville plonked in the outer suburbs!

What I am curious about is the small house size (2br) and the intended tenant market. Are you aiming at DINKS or older couples (whose children have left home) rather than families (who'd prefer 4x2s)?

My other question is regarding the rental market, likely tenant demand and what rents can be charged.

The surrounding suburbs (eg Laverton, Hoppers & Werribee) are full of smallish 3 br homes. If they're ex-commission they may also have a 2-way bathroom. These are typically on 550m2 blocks and sell for around $200k +/-.

They're 25-40 years older than yours, in lower socio-economic areas and do not attract building depreciation. They're popular with families - typically only single income or on benefits who can't afford to buy or rent a 4x2.

Although your place looks so much nicer and is in a higher income area (so it should command a bit more rent), do you see these older homes as competing with yours, or are there qualities in your place that will appeal to a quite different tenant market?

Peter
 
Hi Spiderman,

The reason for the smaller house size was because a 4x2 property (in Point Cook) would have been out of our price range. Not because we particularly think there is more couples / dinks looking to rent over families. I was thinking though there would be young people working in the raaf bases looking for nice places to rent, and perhaps getting a rental allowance as part of their job. I heard the laverton raaf base was closing down though.

My PM tells me the vacancies in the area are around 1%. I think the PM wants to advertise it at around $250 a week. I think we could get another $10-$20 a week but at this stage I just want to get the thing rented.

As to whether tenants may consider a cheaper older property in the surounding areas vs our place, honestly I never really though about it too much, we just liked Point Cook in particular due to the town centre going in, hopefully a new train station and it is relatively close to the city for the price.
 
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