Doing work on house before evaluation.

[Brian84]

Hi all,

We are looking at getting our house evaluated so we can buy our first investment property.

I was thinking of borrowing from equity of around 10-15k to do a few things to the house

- render the bricks because the current brickwork looks like a messy and has a few cracks through it. Got a few quotes and we are going for the middle quote of $6300 as his work looked the best.

- put metal fascia cover over the existing timber fascia and install new guttering and down pipes as current guttering is rusted in a couple of places and leaks. Approx $2-3k DIY

- put in 2nd driveway and put a new garage door on the enclosed carport to make a 3rd lock up garage. $3k

- finish painting old aluminium windows from original brown to colourbond colour monument. $500

Would this be a worthwhile exercise, and would it affect us when we go to borrow for our ip.

How much would it alter our repayments if we borrowed on top of existing home loan.

I was hoping to do this work so the house looks fresh and neater when the property gets evaluated.

 

[Biz]

Why are the bricks cracked mate? If its something structural better to fix that first or the render will crack too eventually.

 

[Brian84]

The brick problem is sorted now. Is was a problem before we bought the house and was rectified before we purchased the place. They are just old cracks. The renderer is going to use acrylic render which is a product that dries like rubber which allows movement to an extent and he is also going to mesh the whole house just in case but doesn't think it will need it.

 

[Propertunity]

- render the bricks because the current brickwork looks like a messy and has a few cracks through it. Got a few quotes and we are going for the middle quote of $6300 as his work looked the best.

As long as the cracks are not continuing to move, and whatever is causing movement is fixed, then external render can add lots of value.

- put metal fascia cover over the existing t imber fascia and install new guttering and down pipes as current guttering is rusted in a couple of places and leaks. Approx $2-3k DIY

This is not so much of a value add, as a maintenance issue.

- put in 2nd driveway and put a new garage door on the enclosed carport to make a 3rd lock up garage. $3k

Not really much of a value-adding exercise.

- finish painting old aluminium windows from original brown to colourbond colour monument. $500

If it fits in with the render job - do it.

Would this be a worthwhile exercise, and would it affect us when we go to borrow for our ip.

Everything except the 2nd driveway & garage door on the carport is worth doing.

How much would it alter our repayments if we borrowed on top of existing home loan.

Borrow $10K at 5% - $10pw interest approx.

I was hoping to do this work so the house looks fresh and neater when the property gets evaluated.

Good idea before getting a valuer out to do a valuation.

 

[Brian84]

The cracks haven't moved at all since we bought the house 3 years ago.

An extra $10/wk is nothing so I think it would be worth doing the work.

I think it will be better to paint the old brown windows to the monument colour to match the garage doors and it will look great with the render.

 

[Brian84]

Might be a stupid question but would they have to get a valuer out to valuate the property before they release the equity to borrow for the work.

 

[Biz]

No funds in an offset? No redraw?

If its only a small amount they might but if you want to get into this investment property malarky i say leave 20% in the house, release the rest into an offset and go for gold!

If you havent already, get in touch with a broker. Plenty of excellent ones on this site who will help you move forward.

 

[Brian84]

I have a broker but I just wanted to get some general advice. I would definitely have enough equity, my loan is 428k and I had a re agent come out and said our house would be between $630-650k judging by comparable sales, even 600 would be alright.

Not much savings or offset account

 

[Biz]

But there are brokers and then there are brokers y'see...

 

[Brian84]

He is my cousins husband and he is also my accountant. He is also a property investor so he understands what I want to achieve.

 

[Propertunity]

Might be a stupid question but would they have to get a valuer out to valuate the property before they release the equity to borrow for the work.

Yes, you'll need to get a valuation on the property before you can release equity. BUT your broker will order this for you.

 

[Brian84]

Ok thanks for the advice propertunity and biz

 

[Tenex]

I am not sure if you have already done this but a lot of banks these days do an online evaluation to lend more money and don't necessarily need to come out.

The valuers also usually go by comparable sales in th area a lot more than some fancy work on the building. Unless if it is a complete Reno with a lot of money spend I would test the water first with the bank to see if they can do an online evaluation

 

[Brian84]

Thanks tenex. I will speak to my broker 2mrw.