Perth nightmare!

[fantail]

IP in Perth is causing major problems right now and need some advice re. a way forward.
It's a 3 bed, 1 bath. very small house in southern suburb.

Our long-term tenant has vacated and has left the place pretty grotty but that's the least of my worries right now as a combination of lack of tenant care and poor performance by property manager, several maintenance issues must be addressed and some serious work is required inside and out.
Minimum spend would probably be $20k but that's just bringing it back to tenantable condition - if I want to sell the spend would be prob. closer to $35k.

I live in Melbourne and can't hope to project manage from here so have to either find someone over there who could handle everything or I have to fly over and stay to get things going.
I can afford the time but not sure which way to jump as agent suggests that there's no guarantee I'd recover this by selling soon as it's a small house compared to others in the area and Perth market now on the slide.

All suggestions or opinions gratefully received.

 

[HD_ACE]

IP in Perth is causing major problems right now and need some advice re. a way forward.
It's a 3 bed, 1 bath. very small house in southern suburb.

Our long-term tenant has vacated and has left the place pretty grotty but that's the least of my worries right now as a combination of lack of tenant care and poor performance by property manager, several maintenance issues must be addressed and some serious work is required inside and out.
Minimum spend would probably be $20k but that's just bringing it back to tenantable condition - if I want to sell the spend would be prob. closer to $35k.

I live in Melbourne and can't hope to project manage from here so have to either find someone over there who could handle everything or I have to fly over and stay to get things going.
I can afford the time but not sure which way to jump as agent suggests that there's no guarantee I'd recover this by selling soon as it's a small house compared to others in the area and Perth market now on the slide.

All suggestions or opinions gratefully received.

A bit more info needed.

Suburb?
Previous rent?
Develolment potential?
Demand in the area for a reno project?

What sort of main cost items need addressing?

You might find it maybe more appealing as a doer uper for fhb.

 

[bob shovel]

Why not start searching for a new pm and get them to manage the reno works? If things are slowing surely they'd be keen to get one on the books.

Like HD said a break down of the works would help suggestions come back. it's a significant amount but are there ways to salvage what's left, eg, replace kitchen cabinets doors rather than whole kitchen. But keep in mind it may sound like a lot but broken down to a couple of trades it can be managed. A kitchen can be measured up and give them creative licence to match existing or easy instal, and then it's only 2-3 days to rip out and put a new kitchen in! Find a painter and let them go for it, most work for you is getting a few quotes

 

[fantail]

Hi HD_ACE, thanks for your speedy response to my query.
In answer to your questions:-
Suburb - Thornlie-Huntingdale zone
Rent - $375 per week.
Development potential - smallish block so prob. not suited for another dwelling but plenty of room to extend - could make it a 4 bed-2 bathroom through some internal rejigging.
Not sure of development demand in area but assume it might be attractive to builder who could turn a profit with a few weeks' work.
Yes it might be viewed positively by fhb who could see potential but a fair bit of new small block housing in the area.

Work required.......
repaint, replace broken window and cracked shower screen in bathroom (as I said PM had not managed properly!) replace or at least revamp kitchen, new stove and rangehood, new taps in bathroom and kitchen, replace light fittings throughout, replace some blinds, replace broken roof tiles and clean gutters. Carpets in all bedrooms needs either replacing or good steam clean. Then clean grout in floor tiles in all other areas.
That's the inside.

Outside - "patio" area outside kitchen-family room no roof - has pavers - invaded by couch grass - these need to be taken up and replaced and think some sort of shelter built here as the rest of the yard is couch grass on VERY SANDY soil.

I estimate a spend of $20k minimum for internal work - more if outside done, so prob.$30k ???

 

[Rixter]

Why not start searching for a new pm and get them to manage the reno works? If things are slowing surely they'd be keen to get one on the books.

What Bob said above ^^^.

I've been using my PM's for all my project management reno's on IP's located around Australia.

I get them to obtain 3 written quotes on works then they email them to me.... I give the nod on which one to run with and then my PM's organise the works.

After PM signs off on job and sends photos, emails the invoice and I pay direct online to the contractor.

I hope this provides some food for thought.

 

[fantail]

Thanks bob shovel,
Yes - have had new PMS - heaps of them! agency has had such turnover that nobody has been responsible for long enough hence the current condition of the property. :

The tradie who gave the quote for most of this work included new kitchen (think flat pack) but I think carcasses could be salvaged (dunno till I have a look) but existing kitchen is single line with a small return bench - not much storage - thought it would be better to add extra cabinets on other wall to make it more functional.
I'm certainly not averse to repairing/replacing/painting the interiors of cupboards and very good at shopping so could organise the lights, taps and carpets (if needed) easily enough and oversee things but not up for doing any of the hard yakka.

I think I need to come over and stay till something is under way at the very least but need to have some prior discussions before I get there otherwise precious time wasted waiting around.

 

[fantail]

What Bob said above ^^^.

I've been using my PM's for all my project management reno's on IP's located around Australia.

I get them to obtain 3 written quotes on works then they email them to me.... I give the nod on which one to run with and then my PM's organise the works.

After PM signs off on job and sends photos, emails the invoice and I pay direct online to the contractor.

I hope this provides some food for thought.

Thanks Rixter,
Yes for other IPs I've done the same but in this case it hasn't worked out due to PM not advising in the first place - and of course, the fact that I'm on the other side of the country makes it all the more important that PMs do their job properly.

 

[Singo]

30k should not be spent in Thornlie huntingdale area unless you are planning to sell. For a $375/w house, I wouldn't spend more than 15k.

 

[jim1964]

agent suggests

1st thing,Pi$$ this useless PM off.

 

[fantail]

Yes.
The "agent" I mentioned in my post, is sales agent (he's had nothing to do with this debacle).

 

[bumblegoodie]

did you buy landlord insurance? if so, why dont you submit a claim?

otherwise you will really need a new PM.

 

[bob shovel]

i think you could possibly do it under 20. But not knowing exactly its just guess work and assumptions.

the kicthen you can get from ikea, you might as well replace it is not a simple replace of a few things. If you design it and get delivered ($70 perth metro) all up <$2500. 2-3days to install for 1 guy.

You need to get on the phone or search/ask on here which real estate to call. plus get things moving especially if its vacant now.

Heres my guessitmate site unseen punt!

repaint $4000
replace broken window $400
cracked shower screen $500
kitchen $4000
new stove $800
rangehood $200
new taps in bathroom and kitchen $150
replace light fittings throughout 8x50 $400
replace some blinds $300
replace broken roof tiles and clean gutters $400
Carpets steam clean $200
clean grout in floor tiles. sugar soap and scrub?? $160
$11,510 lets say $14k

Outside - "patio" no roof $1500
has pavers - hard to say but ill go for $1500

All up $17k

i wouldnt mind getting stuck into! if i was closer and had time

 

[Norwester]

Hi fantail,

Sorry to hear of your demise.

Drop us a PM and we can discuss further (only if you want to of course).

Ciao

Nor

 

[Rhinsor]

Do you have any photos of the property?

Doesn't sound like it would cost much if it is a small house.

I just replaced a cracked shower screen myself which took a few hours and $300.
Broken window $50-$200 depending on size and doing it yourself.
Paint is 3 days work.

Why do you need a new patio?

 

[fantail]

Yes I have photos but the detail not all that clear so wouldn't make much sense to anyone who hadn't seen the property.

Bathroom window is one of the older safety glass ones with wire grid through the glass it's beside the bath over shower combo - which probably explains why it's now cracked.
Fixing it myself is not an option - not in my skill set.

Have landlord's insurance but the per-item excess is high and prob. equal to cost of the job so no point going through the claims hassle - memo to self "renew with better insurance provider".

The patio i mentioned is an area outside kitchen/dining area - only reasonable outdoor area for bbq etc. It used to have timber framework with shadecloth - this deteriorated and it became unsafe so was taken down leaving only the pavers and no cover overhead. Thought replacing this would make it more appealing to both tenants and buyers should if we decide to sell.

 

[bob shovel]

Have you ring the insurance company? Per item premium? Can't say i have heard of that. shouldn't it all come under one claim, therefore excess payment

 

[feihong]

Hi fantail,

I feel for you as we are in similarish situation, although the place is probably still rentable (at a very steep discount given the current rental market) and PM had been fantastic. We bit the bullet and will have the whole place renovated (kitchen, bathroom, laundry, repaint, replace blinds and entire carpet/vinyl, adding one extra A/C, etc) and it will cost us 50K. Yes, I know it is not cheap (I think on par with what you get quoted) and we probably have overcapitalised (valuation 425K as is, it's a 3 bedroom villa in Tuart Hill) but too bad we are in Melbourne. The company we are using is called tlc Perth and the project manager does sound very professional.

All the best!

 

[D.T.]

Why the heck are you paying that much?

That could be deposit on another property which will give you far better return than you're getting!

 

[marg4000]

Have you ring the insurance company? Per item premium? Can't say i have heard of that. shouldn't it all come under one claim, therefore excess payment

Most of the items you list sound like long term deterioration and therefore not covered by insurance.

Do your sums. If you see long term benefits in holding the property then go ahead and renovate. If not, investigate selling "as is".
Marg

 

[westminster]

Hi HD_ACE, thanks for your speedy response to my query.
In answer to your questions:-
Suburb - Thornlie-Huntingdale zone
Rent - $375 per week.
Development potential - smallish block so prob. not suited for another dwelling but plenty of room to extend - could make it a 4 bed-2 bathroom through some internal rejigging.
Not sure of development demand in area but assume it might be attractive to builder who could turn a profit with a few weeks' work.
Yes it might be viewed positively by fhb who could see potential but a fair bit of new small block housing in the area.

Work required.......
repaint, replace broken window and cracked shower screen in bathroom (as I said PM had not managed properly!) replace or at least revamp kitchen, new stove and rangehood, new taps in bathroom and kitchen, replace light fittings throughout, replace some blinds, replace broken roof tiles and clean gutters. Carpets in all bedrooms needs either replacing or good steam clean. Then clean grout in floor tiles in all other areas.
That's the inside.

Outside - "patio" area outside kitchen-family room no roof - has pavers - invaded by couch grass - these need to be taken up and replaced and think some sort of shelter built here as the rest of the yard is couch grass on VERY SANDY soil.

I estimate a spend of $20k minimum for internal work - more if outside done, so prob.$30k ???

Before spending money on this you really should look into:
- what it is currently worth,
- how much rent you could get by fixing essentials (ie broken items),
- how big the block is (you say smallish but I don't know what that means)

I'd be hesitant to spend that much money as that is the budget of a pretty major cosmetic overhaul.

A good clean (grout, carpet, walls, kitchen) and alround general maintenance may make it look much better.

It may cost you less to rent it at $360wk than do all those major items.

Talk to a good accountant and plan when you can 'repair' some items and when it makes sense to do it. If you can make as many repairs when it is available or being rented then they are claimable - they are not if you do them when it is empty and not listed as available for rent.