Half Acre 500m from soon to be completed train station.

[Whishy]

Hi Guys,

Just put contract in for a 5 bed home, half acre with pool only 500m from currently being constructed train station in Kallangur.

Looking for suggestions/input in how I can add value to this aged brick home.

The structure itself is solid, however the internals are heavily dated.

We were inclined to purchase this property as it was only $60k more than our budget for land alone.

Initial thoughts:

Scope:
- Update/New Kitchens & Bathrooms
- Update Internal Walls
- Update Flooring
- Render Internal Brick
- Render External Brick
- Paint Roof Tiles

Now, my biggest concern is the state and material of the internal walls & Floors.

Walls are ply/masonite wall board and is covered in ancient wallpaper, and floors have the old sealed cork and shagadelic 70s carpet. Now, my questions are:

- What can I do to modernise the internal walls?? Is it best to rip them out and replace with plaster board??

- Would a spray plaster application work on top of masonite/ply?

- I am awaiting building and pest, however would the walls or floors likely contain Asbestos??

Thanks

 

[westminster]

What are your plans long term for the house?

I would see how much it would rent 'as is' and see if that is attractive to you and you are waiting for rezoning or it already has development ability.

 

[Angel]

Hubby thinks it wont have asbestos as Masonite is made from timber.

I would consider demolishing the house and building townhouses, but I'm a total loser when it comes to investing. Can you subdivide into six or eight blocks and sell them with the DA, less work ie less stress? Talk to RPI, he will point you in the right direction. If you develop the land, just rent as is to a bunch of stoners who wont mind the carpet and the wallpaper. Fill in or dig out the pool first.

(You lucky guy)

 

[Jane - Hotspace]

Whishy, I have consulted on a few properties in and around Kallangur but this one takes the cake - love that carpet!

I agree with Westminster re working out your long term goal for the house. The Petrie to Kippa Ring train line is going to have a fairly significant impact on that area over time, so I'd assume a buy and hold is on the cards.

Also worth considering is the current vs future val of the property from which you can ascertain your 'now' renovation budget. As the property increases in value you may wish to do more, but for now you may be a bit limited in terms of budget/not over-capitalising.

Your proposed reno will probably be in the vicinity of $55k-$60k (maybe more) depending on how much you can do yourself.

The simple answer to your question 'what should I do' is yes, do all those things you've listed. However, I am fairly certain this will be over-capitalising since the median house price in Kallangur is currently $342,000.

The smart answer to your question is to work out your budget first and then allocate that around the property based on aesthetic impact and your target market (of renters). Generally people buy (or rent in this case) a practical, functional home over a beautiful home. Ie if a beautiful home doesn't fulfil the requirements of their family, they're not interested. On the other side of the coin, if the property is only functional but drop-dead-ugly, then you have the same problem.

Don't get me wrong, I love modern homes and great Interior Design (have been involved in the field for over 22 years now), but renovating an investment property is a different ballgame and requires a clever balance of great aesthetics and functionality.

Excuse ramblings but hope that makes sense!

 

[DEC]

What are your plans long term for the house?

I would see how much it would rent 'as is' and see if that is attractive to you

+1
The longer you keep it the more desirable it'll be IMHO + I love the style of the place and the pool
Be cool if the car came with it

 

[Whishy]

Thanks heaps guys.

Long term I plan to develop. Block has good frontage and is the largest block available surrounding the station.

Within a 1km radius they have a large amount of developed townhouses in the area, so just following the money I suppose.

In the short 1-3yr plan is to live in and hopefully gain some equity with the help of a freshen up and the flow on effect from the opened rail. Suppose this will be a luxury as it will be the first non rushed reno and will also allow us to prod along but by bit.

We can do quite a lot as this will be the 3rd house we have renovated. The only part in which I haven't experienced is the asbestos part so I am waiting anxiously for the b&p.

Rental appraisal as is I think is in the mid to late $4xx so not the best return at present but since we are living in for a bit this won't be a factor.

 

[westminster]

Well if you plan to live in it, then you need to make it a bit comfier.

I'd rip up the lovely carpet, plasterboard walls (especially the brick) and repaint. Together with a budget reno of the kitchen/bathroom.

I probably wouldn't do anything to the outside if you are going to demolish it.

 

[Whishy]

Well if you plan to live in it, then you need to make it a bit comfier.

I'd rip up the lovely carpet, plasterboard walls (especially the brick) and repaint. Together with a budget reno of the kitchen/bathroom.

I probably wouldn't do anything to the outside if you are going to demolish it.

Outside we were only really thinking of a front fence for our dogs. So there not much in that.

Inside we plan to get in and spend a month after settlement (Still Renting Elsewhere) to get the plastering, tiling and kitchen done.

From there we are planning at getting another property after tax time so we will decide whether to live in or move on to the next one at this stage.

 

[wylie]

If I read correctly, you will be moving in, renovating it to suit yourself, with a view to possibly demolishing it down the track to develop the block?

If so, I would rip up carpets, paint the walls and enjoy the space. It sounds like you have asbestos eaves (generally the case) but possibly nothing inside apart from possibly the bathroom walls, possibly under any tiles or flooring too.

We have used Total Asbestos (Somah is the one to speak with). He will let you know what is asbestos, and if there is any doubt he will advise a test ($40 per piece tested I think).

 

[Whishy]

Yes that is correct. Just going to make the place liveable for the family until the time comes in the next year or two to develop (Hopefully after the washup of the train line opening)

We will hopefully be in a financial position next year at the earliest to develop 10 or so townhouses on the block. Going to start the DA process next month.

Should be able to have these constructed for $1000-$1500 per square, Which at the end of construction, negating any capital gains should provide quite a bit of equity.

Financing it will be a different story but might look at some profit sharing agreements with builders etc.. Anyways, thats a long way down the track.

 

[wylie]

Okay... then spend as little as possible for such a short time.

We have no income (other than rent) and we are hoping to get approval for four townhouses. The only way we can finance it is to borrow against property (some type of asset lend) to build the first two, get them rented and valued to pull out the equity to build the second two.

Perhaps you can look at this type of staged development?

 

[Whishy]

Okay... then spend as little as possible for such a short time.

We have no income (other than rent) and we are hoping to get approval for four townhouses. The only way we can finance it is to borrow against property (some type of asset lend) to build the first two, get them rented and valued to pull out the equity to build the second two.

Perhaps you can look at this type of staged development?

That would be a way to go, but would it be forefeiting any construction savings from a builder who could reduce cost of building with the larger scope?

 

[wylie]

That would be a way to go, but would it be forefeiting any construction savings from a builder who could reduce cost of building with the larger scope?

We have no other option really. I've been told by the builder we hope to use that it would save us some money to build all at once, but from my understanding (we were not talking actual figures), the saving isn't huge.

If we can manage things and borrow enough to build all four at once, we will do that.

 

[Ed Barton]

If you're going to knock it down in a couple of years, I wouldn't spend much on anything you can;t take with you and will need in a future house (eg ac ovens etc). Although not modern it looks quite liveable. Some people will pay good money for retro fittings - the shag looks in good condition.

To negate the 'daggyness' you could have some low cost fun with it. Allow your kids to paint their rooms black, hot pink, gold or whatever. Get an artistic friend to do a quick mural in the lounge.

 

[Whishy]

Thanks Guys,

Further discussions and we are talking about doing some low cost floating floors, wall replacement (or paint) and the front fence.

Hopefully this will tie us over until the real fun begins once the train line is up and running.

 

[Whishy]

Sorry to revive the old thread but a bit of an update.

Removed a few walls and have made it open plan with a nice new stone bench top kitchen.

Laundry and bathroom completely gutted due to asbestos so they are currently finalizing with the prep work for fit out.

Have only spent $15k so far and anticipate being fully complete for about $25k and a very large and comfortable house to live in.

Still undecided on what to do as the more we live in it and do to it the more we like it..

Additionally, the train station 1km away is getting closer to completion and there is also talk of approval for a university in the vacant paper mill land across the road. Just wondering what effect these two will have on any capital gains?

Would like a win. My two other properties have let me down substantially since 2009 and 2013..