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From: Colin Mills
WARNING WARNING!!! This is a negative post! If you belong to the "Just do it" (don't ever consider thinking about it first) super positive, all fired up group that seem to love this site then kindly move on to the next post.
The other day I read a post by some guy, Sam I think, who reckoned he picked up a lazy 30 grand doing a reno. Hmmmm - not bad you think. Sounds good to me........
About 15 years or so back I was doing a similar exercise. As the sweat was pouring off me and the sun blazing I suddenly realized what a mug I truly was. I could be luxuriating in an air-conditioned office with my feet up (it was a Saturday) doing overtime. Back in the mid 80s $40 an hour (double time) was a reasonable amount of money. It dawned on me I could hire somebody to carry out the donkey work (which was all I could do) for a lot less than the $40 an hour I could score doing OT. Plus I got to sit in the AC.
My point? Once you start to factor in the cost of your own labour then its surprising just how poorly a lot of renos stack up.
Of course at this point everybody turns around and claims that they have no skills and they value their time at no cost. Obviously thats not so. Even the most basic labour (donkey work) would carry a cost of at least $20 per hour. (I'm excluding OAPs and Uni students who seem to want a 50 minute smoko every hour!!!) And to this day I've never met anyone who will regularly work Sundays without being paid extra.
Lets go back to our friend Sam. According to him he and his g/friend spent 6 months of hard work doing it up. Thats 26 w/ends or 52 days times two or 104 days @ $160 equals $16,640.
Take off the FHOG (I missed out by just 18 years) and selling costs and Sam is left with a couple of grand should he sell. Far cry from that 30 grand.
Of course many will argue he still keeps the $16k. Yeah thats right - but its "sweat money" and certainly not a profit from doing the reno.
I have no problem with renos providing you factor in your own labour costs. If you are not prepared to do that then you are simply deluding yourself as to the true cost and anticipated profit of the exercise.
These days OT for me is unavailable. However I still value my time to the point where I'd rather be out and about looking for my next acquisition than tarting up an old dump, especially when I can pay somebody else to do it for me.
WARNING WARNING!!! This is a negative post! If you belong to the "Just do it" (don't ever consider thinking about it first) super positive, all fired up group that seem to love this site then kindly move on to the next post.
The other day I read a post by some guy, Sam I think, who reckoned he picked up a lazy 30 grand doing a reno. Hmmmm - not bad you think. Sounds good to me........
About 15 years or so back I was doing a similar exercise. As the sweat was pouring off me and the sun blazing I suddenly realized what a mug I truly was. I could be luxuriating in an air-conditioned office with my feet up (it was a Saturday) doing overtime. Back in the mid 80s $40 an hour (double time) was a reasonable amount of money. It dawned on me I could hire somebody to carry out the donkey work (which was all I could do) for a lot less than the $40 an hour I could score doing OT. Plus I got to sit in the AC.
My point? Once you start to factor in the cost of your own labour then its surprising just how poorly a lot of renos stack up.
Of course at this point everybody turns around and claims that they have no skills and they value their time at no cost. Obviously thats not so. Even the most basic labour (donkey work) would carry a cost of at least $20 per hour. (I'm excluding OAPs and Uni students who seem to want a 50 minute smoko every hour!!!) And to this day I've never met anyone who will regularly work Sundays without being paid extra.
Lets go back to our friend Sam. According to him he and his g/friend spent 6 months of hard work doing it up. Thats 26 w/ends or 52 days times two or 104 days @ $160 equals $16,640.
Take off the FHOG (I missed out by just 18 years) and selling costs and Sam is left with a couple of grand should he sell. Far cry from that 30 grand.
Of course many will argue he still keeps the $16k. Yeah thats right - but its "sweat money" and certainly not a profit from doing the reno.
I have no problem with renos providing you factor in your own labour costs. If you are not prepared to do that then you are simply deluding yourself as to the true cost and anticipated profit of the exercise.
These days OT for me is unavailable. However I still value my time to the point where I'd rather be out and about looking for my next acquisition than tarting up an old dump, especially when I can pay somebody else to do it for me.
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