potential reno/Gee Cee



From: Michelle Riley

Gee Cee,
I'm having a look at a house tomorrow
with the view of renovating for resale.
Any advice on what to look for?
It's not a charming QLD style.More likely
to be lacking in charm all together.
The value is in the location,canal frontage
walk to beach.
This area is very hot at the moment.
Would be most unlikely to buy much below asking price.
My bank manager said she has a couple of guys
from Sydney looking at same area to buy for renos.
What do ya reckon?
Cheers Michelle
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Reply: 1
From: Michael Yardney

Hi Michelle
It's not Gee/Cee, but as someone who has done a fare share of successful renovating let me offer my thoughts.
Profitable renovation for resale is not always an easy thing to achieve as budgets tend to blow out as the cost of repairs and improvements escalate.
When you look for a property as a potential renovation try and find one that only needs cosmetic work such as painting, new kitchens / bathrooms etc, rather than one where you need to put in hidden work such as new plumbing or wiring as these are important but can’t be seen as easily.Often a property that was renovated 20 years ago is worth considering as a lot of the hard work was done, but now it needs an update.
When trying to work out if a renovation would be profitable, I find it best to work backwards:-.
STEP 1. Estimate the renovated value of the property – shouldn’t be too hard if there are similar properties in the area.
STEP 2. Deduct all the costs involved in buying and selling the property, including your profit margin in this calculation, as well as the cost of valuations, loan fees, stamp duty, legal costs, interest costs during the renovation and selling period, and selling costs.
STEP 3. What you have left when you subtract all your costs (including the original purchase cost and your profit) from the final sale price is your renovation budget.
If you do the figures, and the difference comes out to say $1,000, then you will obviously have difficulty in completing a good renovation. However, if the difference is more like $20,000, then you’ve got a different starting point.
Remember, you are going through this exercise to make a profit. If there is not going to be a good return at the end, it’s not be worth going to the trouble of renovating the property, especially in the current market where prices may fall.
If it’s not this property, keep looking ,because you can make heaps of profit if you get renovating right.
Michael Yardney Metropole Properties
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Reply: 1.1
From: Michelle Riley

Thanks for the useful tips,
The house was a piece of crap.
Needed more like a major make over.
Actually,I felt really annoyed with the agent for wasting our time and not owning up to
the fact that this place was way beyond cosmetics.
Also felt like telling the slobs that owned it to have some pride.Talk about how not to
present a house for sale.
As you said there are other houses to buy.
The amusing part was my girlfriend who came
with me bought another house this afternoon.
She inspected it and made an offer on the spot(different agent).
I think after looking at the first dump the next house was exactly the opposite.
She so appreciated the idea that it was well maintained she bought it.Says a lot for presentation.This could be a possible selling strategy.
Cheers Michelle
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