Estimating renovation

From: Lotana Von Amor


I am considering buying an old unit in Sydney's Eastern Suburbs to renovate and then sell. The location is good - walking distance to a famous beach, however there is no parking, the building is over 70 yo, the unit is at the ground floor, windows facing south. It's in need of a complete reno.

A friend offered it to me as an opportunity to make a quick buck. The auction is this week and I would like to quickly estimate the project.

Would any of experienced renovators be willing to share their views on quick estimation? Is there a check list to make sure no job is left out?

Thanks,

Lotana
 
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Reply: 1
From: Mike .


Hi Lotana,

Experienced RE agents in the area should be able to give you a good indication of what the place is worth unrenovated v renovated.

If the difference is $50,000 then the renovator's rule of thumb is to spend half that on the renovation. It's no secret that cosmetic appeal transfers directly to buyer appeal so you need to cost those first.

So let's say that you costed re-carpeting (modern), re-tiling (modern), re-painting, new curtains, door knobs, power switch face-plates, attractive indoor lighting, street appeal (modern front door, door light, letterbox, attractive garden plants etc). If that's all you had to do and that came in under $25,000 then the deal is on.

However, if you have to spend large amounts on top such as re-plumbing, electrical re-wiring, re-tile roof, insulation, replace kitchen etc which doesn't add to buyer appeal then it becomes an iffy proposition.

So you need to establish two things:

1) From RE agents estimate renovated v unrenovated value.
2) Get Building Inspection to determine whether any big ticket repairs will need to be carried out.

Good luck, Mike
 
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Reply: 2
From: Lotana Von Amor


Mike,

Thank you for the info. I really like your "Reno < 1/2 the margin" approach.

Regards,

Lotana
 
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Reply: 2.1
From: J Parker


Lontana,

Firstly, get a building inspection done to sort out any possible nasties that you aren't aware of.

Then, as Mike has suggested, getting a RE agent around to discuss what tenants like is another tip. Try to put yourself in their shoes and think of what would appeal.

Having done some renos myself now, I can tell you that the things that make the biggest bang for your buck include:

Painting- don't underestimate it's power to change the look of a whole place. Stay with safe colours but do a couple of feature walls to be "different". Neutral earthy colours look good and can really lift a room.

Kitchens- tenants LOVE new kitchens. If the budget can't cope with it (my last two cost just under $6K each,complete) then repaint laminate cupboards with that White KNight paint (it looks unreal!) replace the knobs and maybe whack in new appliances. Makes a huge difference! Even just replacing the benchtops can be enough in some kitchens.

Flooring- nothing turns off faster than daggy cruddy carpet. Rip it up and replace with laminated floors or sisal carpet (cheaper option)

Bathrooms- freshen up by repainting tiles, replacing taps and vanity, toilet seat.

Window coverings- Timber blinds may be passe, according to some, but I still think they look terrific, especially when half closed and fully down. Roman blinds also look classy but if you can't afford it, just replace with simple calico curtains or venetians. Cheap and clean looking.

Cleanliness- it really is next to Godliness and if you start off with a spick and span place, then you have more leverage when you do the final inpsection upon tenant vacation.

Other things that I did to make one place look really cool included new light fittings, new doorknobs, new light switches and power points (switches with chrome covers- it looked good then!) new paint for front door, new flyscreens (easy to do yourself), new showerscreen and wall cabinet in the bathroom and new tiles for the kitchen floor.

I spent less than $15K on each reno and achieved terrific results. MInd you, I did a lot of hard yakka and my wrist was limp from painting, but it was worth it! Not only do I have better tenants but my revaluations are worth more. (thus increasing my borrowing capacity).

HOpe I've been of some help here Lontana. Good luck with it all and let us know how you get on!
Cheers, Jacque :)
 
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Reply: 2.1.1
From: Paul Zagoridis


Well done Jacque

That was a brilliant post.

What was the turnaround time on doing the work yourself?

Have you streamlined the process now?

What mistakes did you learn from?

Oh and your name, rank and serial number?

Please?

PaulZag
Dreamspinner
WealthEsteem :: Psychology of the Deal
http://www.wealthesteem.org/
 
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Reply: 2.1.1.1
From: Michael Croft


Yes Jacque, well done!
All the replies have been so good I think I'll retire.

Michael Croft
 
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Reply: 2.1.1.1.1
From: See Change


Michael

NOOOOOOOOOOOOOOO!!!!!!!!!!

See change

it's better to be guided by your dreams than your fears
 
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Reply: 2.1.1.1.1.1
From: Mike .


Hi,

For those interested in good renovation books I came across three by author Ann Maurice. She isn't into structural renovations like room or second floor additions. She is more of an interior decorator. But some of the case studies in her books shows how a property which can sit on the market for months can be madeover and sold above asking price.

Most of her makeovers are done for under £3000. The books have lots of before and after photos.

Her site is: http://www.housedoctor.co.uk

Her books: http://www.housedoctor.co.uk/books/index.html

Book synopsis: http://www.channel5.co.uk/lifestyle/housedoc2/further_info.php

Regards, Mike
 
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Reply: 2.1.2
From: John Orbell


A very interesting insight into renovations...but just a query...What is this product "white Knight paint" that is applied to cupboard doors to enhance the kitchen...Interesting concept.
Great forum
 
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