If you’re renovating and you’re not going to get any upside on rent and/or capital value, you shouldn’t be doing it, right? Here’s what I’ve been up to dealing with renos.
I’m carrying this property in for about a month now and spent $280k on this. There’s no rent coming in on it and asked, “I can’t carry this property any longer without tenants in there. Where are we going with the renovation?”
Obviously, I’ve leaned on my team to try and help me out to get the best possible result from undertaking this reno.
So, what do I need to do? And what can I do to make it a better proposition for someone to rent, whether that is a stickier or better tenant, or someone I can eke a few more dollars out of a week than what I was getting beforehand?
We had to find $20 grand to pay for this, so it’s got to be money well spent. It goes back to any renovation. A lot of people love to renovate for renovation’s sake, and renovating’s a headache.
It’s is a big chunk of cash to find. This property land size is quite big, just shy of 800 square metres. It’s a three-bedroom, one-bathroom property, so upstairs, and downstairs. On the 27 July 2017 we spoke about this. Downstairs is, essentially, it’s a filled in Queenslander, so you know, every investor is familiar with this if you’re investing up in Brissie; these properties where upstairs it’s a reasonable sort of property, but then what people often do is fill in the bottom area. It’s not of legal height downstairs, so you can’t — it’s not a livable area.
This property’s a bit of a headache. I’m not going to say it’s a rabbit warren, but there’s a lot of, sort of, ancillary bits associated with it, isn’t there?
There’s a side bit which had additional, sort of, fridges and barbecues, and at a point in time it would have been a loved family home. And I think it’s been sold to an investor, and I’m not going to say it’s gone into disrepair, but it wasn’t very well presented. Hence, the reason we got it for a good price. Everyone’s got to make money. Every dollar we’re spending on this then, Steve, is for a purpose.
So, I look at it, and I’ve got a quote for the property in Kingston, Logan Shire. Full internal painting for both upstairs and downstairs. That’s over five grand. So, I just want to go through some benchmark numbers because I get a lot of questions saying, “How much should it cost to paint a house?”
I was talking to my friend Steve Waters, who’s been on the Smart Property Investment Show many times. He said that there are so many variables. The surface condition. Are things straight? What’s the materials? How many coats? How many colours? The one tip Steve gave me, and would give to people who are looking to get painting quoted, is just be very, very deliberate in what you’re asking for.
For example, ceilings are a different colour from the walls, the walls are a different colour from all your trims, such as your skirts and architraves, and what have you.
If you think the quote is too cheap, it probably is. It means you’re probably going to get a crap job. Some painters will just paint over where it is, they’ll do no surface preparation, and then you’re going to be back in the same situation. You see a lot of people try and patch a roof and they don’t do it very well, and you’re back there in a year’s time because it’s flaky again. Painting, the secret to painting in terms of getting a good job is preparation.
Anyone can paint a wall, right, but it’s how you prepare it that is important.
I’ll run through some of the other stuff we’re getting done here. You know, replacing broken window glass in upstairs bedrooms. You’ve got to get that right, you know, for that’s a safety issue.
There’s obviously work we’re doing on the bathroom, you know, full yard cleaning for front and backyard including rubbish disposal. That’s nearly a thousand bucks.
And then you’ve got removing the old kitchen from downstairs and not replacing it, so you know, to cut that out you’ve got to cut back all the hot and cold-water pipes, you know, removing the wall board, make good the damage, replace missing tiles on the floors. This is just real nitty-gritty, handyman-type work. You can do it yourself if you wanted to, but it’s such a hassle.
Steve told me a handyman will be somewhere between $45 and $65 an hour, so it adds up to do work like patching a hole in manhole-type obstruction downstairs, remove outside structure and repair outside cladding, fit temper batons and plaster patch hole in wall set in sand.
If you do that it would take you a whole weekend, a normal sort of bloke. If I was going to do it, I’d have to go back to Bunnings 10 times because I forgot something. It’s just a nightmare. You know, supply and fit vent to ceiling in downstairs bedroom; that’s pretty straightforward stuff, right? Removal of multiple trees in timber frame fencing and panels — $700 bucks.
Sand and varnish floors for upstairs, punch all holes, fill all holes in floor, sand and varnish all floor area, two coats floor. So, we’re sanding the whole top floorboards and getting that done again, which is good. It’s costing us $2,200 for that.
Then removing the old caravan and lean-tos, remove all rubbish — $1,800 bucks. That’s a lot.
And then this is the most expensive component here, and it’s a note from the tradesman: “Upon further inspection of the upstairs bathroom, I found that the tiles were all loose due to tile being laid over the old Masonite, and the water has leaked behind the tiles, and leaking into the downstairs. Recommendation to remove tiles, remove old Masonite, resheet with villaboard, waterproof, or wet area in the floor area, re-tile over bath and over vanity, grout and silicone” — about four and a half grand.
This is all preventative maintenance, at the top end of things, so it’s going to cost us a lot — but it’s going to be worth it.