My first country reno.

[bronwynt]

Hi there,

I am back from the country and thought I would share my experience with you in buying my first IP out of Melbourne.

I am living in Melbourne with my hubby and have stopped working due to us starting a new family very shortly. We now only have one income coming in but did not want to stop with our IP purchases, so I thought of changing our strategy for now and look at a getting a cheap place in the country that would hopefully bring in enough rent to pay for the new mortgage.

On my first day of looking at about 15 properties I managed to find a 3 bedroom house on a 600sqm block in a good size country town. It was advertised for $95,000 and had been on the market for a few months already. There was some obvious termite damage in the bathroom and it needed to have a complete redo in there. Not a problem we can do that.
We ended up getting the place for $80,000 and were very happy, now 3 months til settlement and to plan our little 2 week trip there to do a reno on it.

The plan was to spend up to $7000 and put in a new bathroom and toilet, new carpets throughout, floating timber look flooring in the kitchen/dining, painting throughout in the inside, new curtains and blinds, 1 built in cupboard in master bedroom and eradicate termite damage and activity.

After the reno, we were aiming at getting weekly rent of $150 and have the value of the property go up to $120,000 allowing us to have more equity and look at buying another place some time following if all went well with this one.
Here is a picture of the front of the house, bear with me if it doesn't come out it is the first picture I have posted. I will check on it and continue posting in a few minutes.

Bronwyn.

 

[bronwynt]

Yes, that took me so long to work out, but great that it did so now I can continue.

So hubby and I went on our little mission and we ended up being away for 14 days all together. We stayed there and came home twice for a nice warm shower and relaxing days off. There was no bathroom that could be used for most of the time so I really was hanging to get home those 2 times.
It all went really well and we ended up spending under our budget, we spent $6637 and that was for:

Complete new bathroom and toilet and tiles in laundry,
Kitchen handles
New carpet throughout, layed ourselves,
Floating timber look flooring for kitchen/dining,
Curtains and blinds throughout, (I used some old ones I had for lounge)
Walls and woodwork (not ceilings) throughout,
Termite extermination
New Aerial on roof
Tip runs
Built in cupboard
Food and beer (beer not for me)
Petrol

Here are some before and after photos of the bathroom and toilet.
You can see the termite damage on the floor.

 

[bronwynt]

Here are the photos of the toilet.

 

[bronwynt]

Here are the photos of the laundry.

 

[bronwynt]

In the main bedroom we put in a built in robe, the materials cost us a total of $120.

 

[bronwynt]

In the kitchen I added new handles to the cupboards and painted them all, there is also new flooring and new wooden venetians.

 

[bronwynt]

In the loungeroom, apart from the newer curtains and carpet, I also re plastered the fireplace and but a suede paint effect on it, very happy with the result.

 

[oc1]

Nice.

That wouldn't happen to be Sherrin St Morwell?

 

[chrispy]

Congratulations Browyn you have done a great job for a terrific price, you certainly have lifted the value.

House was a good choice too - it looks good and will appeal to renters.

Well done

Chris

 

[bronwynt]

Here is the hallway finished and the dining area. In the end I wish I hadn't bothered painting the corner stand as it took ages and didn't look too bad in the beginning anyway, I just can't help painting anything in sight sometimes.

 

[bronwynt]

With the exterior of the property you are seeing the after photo. Before did not look much different I just painted the picked fence and the lawns were mowed/whipper snippered and I also painted the front door and surround and step.

The TV antenna was missing, so we had to get it replaced for $350. Seems like a lot if you ask me, especially as the two guys were only there for 15 minutes and told us the antenna only cost $80. Make note for next time.

Termite damage was the biggest relief. We basically haggled the house price down to $80,000 on the basis of redoing bathroom and getting termite exterminators in.

The termite exterminator quoted us $1000 to treat the existing activity. We just called him up when we were there and asked if we could buy the treatment off him and do it ourselves, he was more than willing, came around and showed us exactly what to do and gave us the treatment for $30 and it took us 15 minutes, too easy.

I forgot to add the photos of the view from the balcony. This was why I really liked the property. It was funny when I first looked at it, I walked out on the balcony with the agent and went "wow look at that". The agent replied with, "yeah people around here don't care about a view". He then went on to tell me the owners were desperate to sell and if I gave them an offer of $5000 less I should get it. My thoughts of course were, great I will offer even lower then.

 

[bronwynt]

Hi Oscar, it is, how did you guess?

Now for some more figures. I had 2 agents around and they both said I should try for $160 a week in rent so it has been on for almost 1 week for that price and no one is in yet, I hope it does not take too long. An agent also said the new value should be $120,000 plus so that is positive.
I just hope that it does not sit vacant for too long, it is my first attempt at something different. I am also aware that it is in a place where prices are not rising at an alarming rate like Melbourne or even some nearby towns, so I will just have to see how it all works out and I may be tempted to do it again in the near future, but with a new born baby along for the ride it could be a little difficult.

Thanks for listening, I hope I have given you some insight into a new adventure.

Bronwyn.

 

[oc1]

Hi Oscar, it is, how did you guess?

I actually looked at it many months ago

I pretty much know the area inside out. Good buying price. Stockdale Leggo had it from memory.

I reckon $160 is a tad bit too high. The quality of tenants in that part of town are generally not the best sort so make sure you're picky with who you let it to. Agents there just throw anyone in there really. So it would be a shame if the tenants are of a bad sort. Probably drop the price a little in exchange for quality tenants. Price wise $120,000 would be the maximum val i would think.

 

[bronwynt]

Hi Oscar,

Thanks for the advice, that is a coincidence that you looked at my place also.
I am not sure if I will invest in the same town next time or not, I guess it depends on how I get on.
There is a place for sale a couple of doors up that is the same build as mine that is on the market for $149,000 it is a little better though as it has a garage that has been turned into a rumpus room and a carport and a newer kitchen. I have seen it advertised for quite some time now, maybe they are a bit high with their price.

Bronwyn.

 

[bronwynt]

Here is another picture from the balcony. I think it is funny with the rainbow falling onto the power station in the distance. Imagine working there and then coming home to look at it all afternoon.

Bronwyn.

 

[oc1]

They're dreaming at thhat price. Its been on the market for ages. Traralgon would be the first place to pick up in price in the bottom end of the market and its slowly starting rise.

PM me if you ever need some local knowledge.

 

[our obsession]

Bronwyn congratulations on your fine work ...I think you have really put a smile on your property's face, well done you guys.

I was just thinking and talking about your house over tea time....and got to thinking, just a little brainstorming stuff..

When we bought our rural IP (I understand Morwell is a city) but I approached an Agricultural Company to see if they would be interested in leasing our IP...I also had in the back of my mind the Education Dep't, Water Board, Shire, any kind of industry or business/service body so as to offer a secure lease to them (naturally with rent increases-as mutually agreed ) but in the idea we had relative security and a good solid corporation to deal with...they would be responsible for the place instead of an individual tenant.

The Ag place was more than happy to deal with us and now they direct credit rent every fortnight, can place their people as tenants, eg at the minute we have a Canadian Scientist in there....maybe there are some Corporations around the city of Morwell keen to talk?

Morwell's historical median house price gain for 1994-2005 was 95% btw....Keilor was 97%, Rockbank 98%, Mildura was 94%, Miners Rest 100%.

(Just to give you an idea of it's past performance, no guarantee that will be next decade naturally).

In 1994 the median price of Morwell was: $56,000, by 2004: $109,250. (Figures are from Vic. Valuer General).

Also I had a look at the realestate rent site, your IP looks so nice but when I downloaded your picture and lightened it (colder, darker season plays havoc with the light on photos) I got a sweet, lighter photo...plus I took your pictures that you put up here (I wanted to have a look at the views-so lightened them too...) is it okay if I email them to you so you can see the difference, or maybe I can just put them back here in your thread...it's just that I see a lot of folk with the greatest work gone into their places to either rent or sell their homes and sometimes the pictures don't quite do them justice, if you know what I mean?

Would I be getting a little over enthusiastic if I could get your current IP photo on RE rent site replaced with a more visible-happy-lighter picture-pleeease?

 

[bronwynt]

Hi our obsession,

Thank you very much for you knowledge and advice, and I would love it if you could alter my photos to make them lighter.
I am honestly so hopeless with technology and it has taken me years to learn how to even get the photos off the camera and onto the computer, it was always something hubby did. The fact that I even got them onto this forum is a miracle, I had to ring up Dad and hassle him for help.

Ask me about painting and I can tell you a lot, but I don't even know how to turn off this computer properly.

Bronwyn.

 

[Belu]

bronwyn great reno there!

I wouldnt be *too* worried about increases in CG for your new place just yet. If you take current Val at $110,000, take off the $7k costs, its still a 28% increase on the value of what you bought - and that is being modest with the price.

Or look at it this way: 50% increase in the next say 10 years (pretty bad case scenario) would bring the price to $165k which is more then a 100% increase on purchase price

Good luck with renting it, and even more luck with the family on the way

 

[our obsession]

It is a great view! I love how you've bought this tired girl to life.