Finally Bough First IP

[wrexter]

FRONT PROPERTY (2x1) - AFTER

The front property was much the same as the rear property, however the kitchen was newer and the flooring in the kitchen was also newer so we left it, especially as we were time and cash poor. In the future we may upgrade it as the kitchen renovation was about $7000 for the rear property (that all inclusive).

 

[Jamie_]

looks good, do you think the reno was worth it?

an extra $50 per week * 52 = $2600 per annum
$30000 reno costs / $2600 per annum = 11.5 years to get your money back, was it really worth it? will the tenants ruin the hardwork you've put in in that time?
Not having a crack at you, just running the numbers
Or was it 40-50 per property?

 

[Singo]

looks good, do you think the reno was worth it?

an extra $50 per week * 52 = $2600 per annum
$30000 reno costs / $2600 per annum = 11.5 years to get your money back, was it really worth it? will the tenants ruin the hardwork you've put in in that time?
Not having a crack at you, just running the numbers
Or was it 40-50 per property?

$30k @ 5% is $1500 per year outgoing.

 

[D.T.]

$30k @ 5% is $1500 per year outgoing.

$30k at 5% is also deposit on another property which will produce far greater return in growth than the $50 additional rental achieved. I would have left them unrenovated personally.

 

[z611143]

Still the places will sell for more due to the renovation in 'x' amount of years.

The above hasnt been calculated into the above comments numbers.

 

[D.T.]

Still the places will sell for more due to the renovation in 'x' amount of years.

The above hasnt been calculated into the above comments numbers.

Never plan to sell thats why

 

[Singo]

$30k at 5% is also deposit on another property which will produce far greater return in growth than the $50 additional rental achieved. I would have left them unrenovated personally.

Well, a $30k Reno should create enough equity so that more deposits can be raised as well. (Use that 30k for another deposit or use that 30k to raise the equity position by 75k?) Reno is all about creating equity and additional rent is the bonus. And there will be depreciation too. Timing the expenses and utilising immediate write offs could reduce the cash outflow too...

 

[z611143]

Never plan to sell thats why

Well its still going to increase price which your not calculating in.

 

[wrexter]

The rental increase of $50 was per property, so we are getting $100x52 = $5200 a year extra with outgoings of $1500 per year.

For us it was well worth it as the units were in poor shape and very unattractive for rent in their original condition.

They are making more money than I am paying In interest and since I never plan to sell it's not an issue. It's a small price relative to the purchase price and I think the equity increase in the properties was worth it.

 

[Brady]

I would be happy to get money back over 5 years. Seems reasonable. Agreed with early concerns if it was $50p/w extra for both questions would be asked. $100p/w extra for both is ok. Makes the properties alot more attactable for rent, sale and possibly most important re-val.

 

[Catalyst]

The rental increase of $50 was per property, so we are getting $100x52 = $5200 a year extra with outgoings of $1500 per year.

For us it was well worth it as the units were in poor shape and very unattractive for rent in their original condition.

They are making more money than I am paying In interest and since I never plan to sell it's not an issue. It's a small price relative to the purchase price and I think the equity increase in the properties was worth it.

Wrestler, the reno looks great!

You did a LOT with your budget. Who did up the kitchen for you at $7k?

 

[wrexter]

Wrestler, the reno looks great!

You did a LOT with your budget. Who did up the kitchen for you at $7k?

Demolition = $0 (done by me)
Kitchen = $3763 (Masters, i put it together)
Kitchen Cabinet Install = $650 (Contractor)
Oven, Cooktop, Rangehood = $1330 (Harvey Norman)
Splashback Tiles = $131 (Crosby)
Tiling Install = $350 (Contractor)
Electrical Work = $800 (contractor)
Misc (Taps, lights, waste plumbing etc) = $300

Total = $7324 (Price does not include flooring)

 

[Catalyst]

Well done Wrexter!

 

[techie]

Nice reno!

 

[ddan]

Well done wrexter! congrats! Such an interesting IP...

Would you mind sharing the costs involved for your BA?

thanks

 

[S.T]

Quite a stunning reno! Now you can sit back for a bit, not have to worry about maintenance items and enjoy the rent coming in. Well done!

 

[wrexter]

Quite a stunning reno! Now you can sit back for a bit, not have to worry about maintenance items and enjoy the rent coming in. Well done!

Still waiting for those first rent moneys to come in!

 

[PHP]

Nice wallpapers. How much for materials and labour for the wallpapers?
Cheaper than painting?

 

[wrexter]

What wallpapers?

 

[arriety]

Great work, Wrexter and thanks for sharing the photos and costings. I am about to do a full reno on an 80s house so those figures certainly help. I just don't think I could get it done as quickly as you did. Well done for sticking to your goals!