I would have thought that if you wait say 8 years to renovate just before you sell that any extra money you make from the renovation being newer would be wiped out by the fact that the renovation will cost you loads more than if you did it when you first bought it due to inflation... does that make sense...not sure?
What adds the most value?
- Thread starter Rodney
- Start date
I will try and explain myself better?? as you all know my lit is poorer than most!
lets say you bought an IP for 300k (easy numbers) 3 bed and 1 bath, and the interest rate was 6% costing 18k year, and the rent was $300 wk or $15,600 pa
so this 300k IP is neg geared by $2,400 PA
Adding an ensuite and a main bedroom could cost about $60k . we know the rent could increase by $100 bucks at least, being $5,200 a year, and the cost for the room would be $3,600 to pay back to the bank each year.so your up $1,600 each year , and you now have new depreciation on the new rooms, if your gst reg you get 10% from the work/products back too! being $6k
Sooo! now the loan is $360,000 @ 6% costing $21,600
The rent you get now is $420 wk x 52 = $21,840
The property now being 4beds and two bathrooms val $440,000
You now have a new depreciation schedual, GST to claim of 6k and its now positive geared by $240 plus you have increased the equity by $80,000
giving you the ability to buy the next !
Do you get it! it comes from my brain
lets say you bought an IP for 300k (easy numbers) 3 bed and 1 bath, and the interest rate was 6% costing 18k year, and the rent was $300 wk or $15,600 pa
so this 300k IP is neg geared by $2,400 PA
Adding an ensuite and a main bedroom could cost about $60k . we know the rent could increase by $100 bucks at least, being $5,200 a year, and the cost for the room would be $3,600 to pay back to the bank each year.so your up $1,600 each year , and you now have new depreciation on the new rooms, if your gst reg you get 10% from the work/products back too! being $6k
Sooo! now the loan is $360,000 @ 6% costing $21,600
The rent you get now is $420 wk x 52 = $21,840
The property now being 4beds and two bathrooms val $440,000
You now have a new depreciation schedual, GST to claim of 6k and its now positive geared by $240 plus you have increased the equity by $80,000
giving you the ability to buy the next !
Do you get it! it comes from my brain We bought a 3 bed, 1 bath house (from 1950s) with two living areas. We've done the following work:
- converted the rooms so that we added the 4th bedroom, still keeping with two living areas (it required building few walls and moving few doors around),
- added BIRs in all bedrooms,
- replaced most doors,
- replaced the existing bathroom from top to bottom,
- added a second bathrooms (converting the exsiting laundry), but still with a generous space for a washing machine),
- put in the new kitchen,
- repainted the whole house,
- new tiling in all wet areas,
- sanded the wooden floors,
- installed electric heaters in all bedrooms (4) and reversed cycle aircondiotioners in living areas (the house had only one space heater when we bought it),
- installed new door furtniture, light fittings, new window coverings, proper window locks (insurance!!).
It all costed us 50K and lots of our hard labour (on the top of working full time). It added value to the property (even after deducting the cost of reno and and loss of rent while renovating) and the rent was up from 260$ to 340$ from day one.
PS. I will never ever do it myself again !!!! Or maybe if we are not working FT. Nevertheless it WAS a very interesting experience!
- converted the rooms so that we added the 4th bedroom, still keeping with two living areas (it required building few walls and moving few doors around),
- added BIRs in all bedrooms,
- replaced most doors,
- replaced the existing bathroom from top to bottom,
- added a second bathrooms (converting the exsiting laundry), but still with a generous space for a washing machine),
- put in the new kitchen,
- repainted the whole house,
- new tiling in all wet areas,
- sanded the wooden floors,
- installed electric heaters in all bedrooms (4) and reversed cycle aircondiotioners in living areas (the house had only one space heater when we bought it),
- installed new door furtniture, light fittings, new window coverings, proper window locks (insurance!!).
It all costed us 50K and lots of our hard labour (on the top of working full time). It added value to the property (even after deducting the cost of reno and and loss of rent while renovating) and the rent was up from 260$ to 340$ from day one.
PS. I will never ever do it myself again !!!! Or maybe if we are not working FT
. Nevertheless it WAS a very interesting experience!Based on the analytics we have done on all the renovations we have performed for ourselves and for others we have found the following order to be a fairly accurate list in terms of what adds the most value:
1. Changing the profile of the place by adding bedrooms
2. Changing first impression (outdoors) including painting/rendering/fence/etc
3. Adding bathroom
4. Renovating existing kitchen
5. Renovating existing bathroom
6. Adding a deck
7. Painting indoors
8. Changing floor coverings
9. Adding robes/cupboards, new light fittings, door handles, etc
Wishing you every success,
Ana Stankovic
1. Changing the profile of the place by adding bedrooms
2. Changing first impression (outdoors) including painting/rendering/fence/etc
3. Adding bathroom
4. Renovating existing kitchen
5. Renovating existing bathroom
6. Adding a deck
7. Painting indoors
8. Changing floor coverings
9. Adding robes/cupboards, new light fittings, door handles, etc
Wishing you every success,
Ana Stankovic
Not necessarily. It depends entirely on the area and what features similar properties have. There are plenty of one bathroom, four bedders out this way.
That would really suck if someone was in the toilet and you really needed to go.
That would really suck if someone was in the toilet and you really needed to go.
You need to remember that this trend for more than one bathroom is a reasonably modern trend. In the past people had many more children and still only one bathroom. If you were really lucky you had a second toilet in the laundry.
FWIW, I grew up in a tiny miners shack with only one toilet and it was in the backyard. The people who lived there before us had seven children.
A four bedroom house does not necessarily house a large family. These days many homes will have one of the bedrooms used as a study. We have a four bedder and, until last weekend when one child moved back home, had only two people living there.
These days families have fewer children, yet live in bigger homes and all of a sudden you just NEED two bathrooms. Admittedly I prefer to have two bathrooms myself, but it is hardly a requirement. This is the first home we have had that has had a second bathroom, and we only use one of them because we have pulled the tiles off of the ensuite in preparation to updating it.
These days families have fewer children, yet live in bigger homes and all of a sudden you just NEED two bathrooms. Admittedly I prefer to have two bathrooms myself, but it is hardly a requirement. This is the first home we have had that has had a second bathroom, and we only use one of them because we have pulled the tiles off of the ensuite in preparation to updating it.
