Tag: real estate

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Bathrooms Before & Afters DIY Expert Tips Kitchens Real Renos RENO ADDICT

How to: Budget for your next renovation

AFTER

Like a runaway train, a renovation budget can quickly derail once you lose control. It can happen to the unlucky, the unsuspecting and even to the most experienced renovator. That’s because you’re nearly always dealing with older properties where tricky problems arise and one can of worms can quickly lift the lid on another.

It underlines why it’s so important to be highly disciplined about all the aspects of a budget that are completely within your control and allow a 10% contingency for the inevitable ones that aren’t.

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BEFORE
AFTER
AFTER

Here are four ways to help you budget for your next renovation:

Set your budget limit

For any cosmetic renovation, I recommend you cap your renovation budget at 10% of the total value of the property. So that means if you purchased your property for $600,000 you should spend no more than $60,000 on your total renovation. That’s for everything, inside and out. If you’re doing every room in the house, then you might want to break it down room by room, keeping in mind the kitchen and bathroom will generally always be the most expensive and trade-intensive rooms to renovate. If you’re handy with Excel, I recommend keeping a running sheet of costs.

Research, research, research…

Nearly all professional renovators and developers work to a set formula: they know roughly what repairs cost, what the various trades charge and when to walk away from a project because the cost of repairs or improvements simply doesn’t make the numbers stack up. Things like replacing an old roof, re-stumping or doing a complete rewire of a property could prove cost-prohibitive if you were looking to make a profit on the renovation. The internet is full of information, so educate yourself as much as possible about what things typically cost, especially remedial works. Knowledge is power in the renovation game.

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BEFORE
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AFTER

Always get three quotes

The only real way to know if you’re getting a fair price for the task at hand – whether it’s waterproofing and re-tiling a bathroom, or getting the façade rendered and painted – is to get a minimum of three quotes. It might seem like a lot of extra hassle, but you’ll be staggered at how much prices can vary: sometimes it’s not hundreds of dollars, but tens of thousands! A ridiculously low quote should ring alarm bells, as should an absurdly high one. If there’s a massive disparity between your three quotes, then get a couple more. And make sure you’ve detailed all the works required, in writing, so you’re comparing apples with apples.

Shop around for materials

Unless you’re a bargain shopper, you’re not stretching that budget as far as it can go. Finding a floor stock vanity for 50% off, end-of-line tiles, a heavily discounted kitchen on an auction site like GraysOnline, and comparing prices online for all your major fixtures and fittings… this is where you’ll save serious dollars. And let’s face it, there’s nothing more satisfying than bagging a bargain.

–Cherie Barber is the director of Renovating for Profit, a company that teaches everyday people how to buy and renovate properties for a profit.

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Bathrooms Before & Afters DIY Kitchens Outdoor & Exteriors Real Renos RENO ADDICT

Real reno: Neglected semi overhauled in just eight weeks with stunning results

BEFORE exterior

A rundown two-bedroom semi in Sydney’s inner west has been transformed from ugly duckling to swan in just two months by a seasoned renovator with a budget of $100,000.

“It literally felt like a real life The Block with all the tears, laughter and successes but without the cameras,” says owner Judith Treanor who completed the overhaul while running her interior design business.

“The home was in desperate need of tender loving care and in original condition. Ceilings were cracked, windows were rotting, kitchen was falling apart, bathroom was tiny and impractical, wiring was exposed, garden had been neglected with uneven concrete. It was possible to see the potential however.”

BEFORE exterior
BEFORE exterior
AFTER exterior
AFTER exterior

A first-time flipper, Judith made a $54,000 profit on the renovation which included a new bathroom, bamboo floors, fresh coat of paint and opening up the kitchen and laundry to give buyers direct access to the backyard. “The all white L-shaped contemporary kitchen including breakfast bench and in-built laundry cupboard brightened up the formerly drab living area immensely and brought the house bang up to date,” she said.

BEFORE kitchen
BEFORE kitchen
AFTER kitchen
AFTER kitchen

The backyard is now unrecognisable. “It’s a real oasis in the city,” says Judith who completed the landscaping, including laying the pavers and installing planter boxes herself with help from family and friends. “If you’re able to get involved in some of the work where feasible, do – not only does this save you money but it gives you a great sense of pride and achievement.”

BEFORE backyard
BEFORE backyard
AFTER backyard
AFTER backyard

Renovation hiccups included uneven floors in the kitchen and damage to the drainage system and electrical circuitry. “I love to create beautiful spaces. However if I was to flip a property again I would stick to one requiring only aesthetic changes not structural. When renovating a house of this age and condition you need to have a big buffer in the budget for unforeseen circumstances,” said Judith.

Unexpected costs aside, as an interior designer the biggest challenge she faced was resisting the urge to splurge. “I wanted this to be a stunning showcase for the business whilst simultaneously keeping to a strict budget as the plan was to sell for profit.

“It almost goes without saying but renovating a home for profit is vastly different to renovating a home to live in. It’s hard to not want to go with your heart and create a design masterpiece but you need to appeal to the market. However I’d also say that doesn’t mean going completely neutral as you risk your property being forgotten alongside all the other homes a buyer may have inspected on the same Saturday.”

AFTER bedroom
AFTER bedroom

As for advice for other would-be renovators, Judith says “when choosing a builder don’t make the mistake of going with the one who quotes low to get you to sign the contract. This so often ends up becoming the most expensive as they will create variations at every turn. Make sure the scope of works from each trade is very through and detailed.”

Visit Judith’s online store.

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Expert Tips RENO ADDICT

Selling in spring: Property makeovers for a competitive season

As soon as the calendar hits September you can feel the property market wake up from its winter hibernation. Welcome to spring, one of the most competitive times of year to list your property. Here are some tips on how to prepare your place at this hectic time and make your property stand out from the crowd.

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Mark Foy

Advice for selling in spring

For the past few years I’ve been cautious about encouraging people to sell their property in spring. Why? Lots of people think this is the best time of year to sell, but actually a healthy buying market has less to do with the season and more to do with stock levels.

It may surprise you to learn that the number of buyers in the property market is fairly steady throughout the year. When there are fewer properties on the market, demand and prices go up, but if everyone thinks they should sell their property in spring, there’s a glut and results may not reflect the quality of the stock.

This spring is a little different to the past few. Interest rates are low and people aren’t selling at the rate they have in recent years, so the lack of stock means it’s a better spring than most to list your property. That being said, it’s still a competitive time to sell, so you’ll need to make sure your property is at its best.

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Image courtesy of Belle Property

Preparation and presentation

You only get one chance to impress a buyer, so make it count. Milder weather means people are happy to spend a little more time outside looking at the exterior of the property, so pay attention to the condition of your home. The facade should be neat, well maintained and inviting.

If you have a garden, make sure it is tidy and well kept. If it’s too early in the season for flowers or lush greenery, consider hiring a landscape gardener to plant something that blossoms early.

I strongly encourage homeowners to engage a property stylist to neutralise the space and enhance its positive features. The more you can remove your personality from the place, the easier it is for buyers to overlay their vision for the property, which encourages better sales. If you have psychedelic walls, for example, paint them white. A good stylist will give your place the edge over comparable properties for sale, so it is well worth the money to hire one.

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Image courtesy of Belle Property

Timing is everything

Every property has an optimum time for inspection, dependent on ambience. As the days become longer during springtime, the best time/s in terms of favourable natural light and comfortable temperature will change compared to winter. Identify the best time to show your property and schedule an inspection as soon as possible to ensure you secure that timeslot.

Because more sellers tend to list their properties at this time of year, it’s also a good idea to line up all the professionals you need to help you sell yours—your choice of real estate agent, property stylist and/or auctioneer—as early as possible. Keep an eye on demand for other services you may need, for example someone to make minor repairs, paint your property or landscape your garden, so you can engage the people you need when you need them.

Spring may be a traditionally competitive time of year to sell your property but with a bit of planning and knowledge about what’s going on in the market you can certainly edge out similar listings and use the season to your advantage. As I mentioned, this year stocks are lower than usual so it’s a good time to put your place on the market because the weather and the competition are less fierce.

Mark Foy is one of our resident experts and a director of Belle Property Surry Hills in Sydney.

Read all Mark’s articles

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Architecture Before & Afters Design Real Renos RENO ADDICT

Real Reno: Neglected hoarder’s hovel transformed into breathtaking family home

Residential

A heritage listed, dilapidated hoarder’s home set on an incredibly steep block. It’s enough to frighten the most experienced renovator but in just eight months, two courageous brothers have transformed the junk-filled squalor into a multi-million dollar property.

“It was our second hoarder house so I was a little more confident this time. Doing a major renovation, you just ignore it and look at elevation, the view and try to get a feel for the finished product,” said owner of Graya Construction Rob Gray.

BEFORE exterior
BEFORE exterior
AFTER exterior

The finished product is a contemporary four-bedroom family home, with three bathrooms, two living areas and a pool, split over three levels. “It’s very steep and the most tricky part of the build was having to slide the two-story original house. We had to slide it down the hill and just getting the machines up and down and material in and out was a bit of a nightmare. Being on a steep block can easily add 20% to the cost of the build,” said Rob.

BEFORE backyard. Bulldozers are brought in to removes the piles of rubbish and begin earthworks
BEFORE backyard
AFTER backyard

To meet heritage guidelines, the weathered front façade has been restored and the original framework remodelled to form a spacious master bedroom on the top level, with sweeping views of the neighbourhood.

“With the heritage listing there are two options: you can essentially keep the character throughout the whole house, or you can modern it up which is what we chose to do,” Rob said. “I think the master bedroom is easily the best part of the house, the whole level is just yours. It’s huge. It’s a 3.4-metre ceiling and every person that’s seen the house is just blown away by it.”

BEFORE master bedroom
BEFORE master bedroom
AFTER master bedroom ensuite
AFTER master bedroom ensuite

But it’s the rear extension, with its expansive timber lined roof and walls, that makes your jaw drop. “I love using natural timber both inside and out. It softens it up and adds texture. White gyprock can be very boring,” Rob said.

BEFORE exterior
BEFORE exterior
AFTER exterior

The second level of the home features the guest bedroom, main living area and an open-plan kitchen with “super-white” marble bench-tops that Rob says “catch the light and sharpen up the island to give it an element of architecture.”

AFTER kitchen
AFTER kitchen
AFTER living and dining
AFTER living and dining

A large void and staircase lead down to the ground level, where you’ll find two more bedrooms and the rumpus, which opens out to the pool.

AFTER staircase and rumpus
AFTER staircase and rumpus
AFTER ground level
AFTER ground level

Purchased in late 2015 for $750,000, it took Rob and the team just eight months to complete the renovation. “I started designing the plan when it was under contract so when it settled, I was busy on another job for four weeks then I jumped straight onto it. It was a 30-day settlement and I used that in planning and that’s a big one for anyone that’s looking to do something to on-sell is really use that time to your advantage.”

He adds: “If you are designing it for your family or designing it to sell, it’s two different processes. If you’re designing it to on-sell you have to get in the mind of your buyer. But if you’re designing it for yourself the first step is to decide how many different bedrooms, bathrooms and living areas you want then I would start looking at sizes. Compare houses on the market to what you want to build. Then work out roughly how many square metres you need to get the house that you desire before you start drawing, which people always forget to do. It is really important to talk to some builders and get some estimates on square metres. People really miss that step and it always comes back to bite them.”

Rob also suggests would-be renovators tread carefully with trends to ensure a renovation stays timeless. “There is nothing worse than a modern house where people use the latest fads and then two years down the track it just doesn’t look good and devalues the house. Try to avoid glosses. Use matt two-pack in the kitchen, matt coating on the timber floors and tiles. I did go black tapware in this house but it’s an easy cosmetic update.”

AFTER main bathroom
AFTER main bathroom

The hoarder house, in the sought-after Queensland suburb of Paddington, is now known as the water tower home and sold prior to auction to a couple with a young family.

Rob and Andrew Gray
Rob and Andrew Gray

You can find out more about Rob and the team at Graya Construction here. Photos courtesy of Scott Burrows Photography.

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Design RENO ADDICT Styling

Secrets of a property stylist: How to add value and attract buyers

There’s an art to selling a home and it doesn’t just involve finding the right real estate agent. A lust-worthy interior can have buyers lining up at the front door potentially adding tens-of-thousands of dollars to the sale price.

“We’re not just creating a look, we’re illustrating a lifestyle,” says property stylist Melissa Rice who launched The Hired Home after 14 years in the real estate industry. “More often than not, the first introduction a buyer has to the property is through the internet and if the photos are bland, with no furniture and no emotion, you will have less buyers there. People want to see colour and personality in a home because that’s how they want to live. Buyers don’t want to live in a white box.”

Having an on-trend, snap-worthy interior can add up to 30% to the value of the property and according to Melissa, it starts with a good declutter and refresh. “I think the biggest turn off is if the property doesn’t present well; the furniture is tired, the home is messy and dark. People want light and airy and bright,” she said.

“It’s so important to present the home to its full potential, not only in the look but the floor plan. If it’s a small bedroom apartment we will try to fit in a study nook and things like that, so everything is addressed.”

Melissa recommends sellers update light fittings, install new carpet and apply a fresh coat of paint before the home is listed. “When someone is living in a property it doesn’t matter how clean and tidy they are, it just gets tired. Even light switch covers; over time they start to discolour.”

The same rule applies when styling. “Once you start using a product it doesn’t look fresh and clean anymore,” said Melissa who recommends investing in new towels, curtains, white linen and accent cushions to really lift the home.

“In bedrooms I tell people they must pull the furniture off the walls. A lot of times people believe pushing beds to the corner of a room is going to make it feel bigger, it’s not. For shelving, we would probably style about 60% of the shelf, leaving space for the eye to rest. Not every space has to have something on it.”

You can find out more about Melissa and the The Hired Home here.

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RENO ADDICT

Increase your home’s value with these simple tips

Renovating your home can be a stressful and strenuous undertaking at the best of times. When you’re renovating with the sole purpose of increasing the value of your home, there are certain factors that you should take into account before putting hammer to nail.

Greville Pabst WBP Executive Chairman-417_JPG
Greville Pabst

If you plan on renovating before selling your house, then consider making smaller but visually impactful changes to the property. Cosmetic updates such as a fresh coat of paint on walls and doors, upgrading light fixtures or redoing the flooring can add significant value to the property without breaking the bank.

A bathroom or kitchen that feels outdated can be very off-putting to prospective buyers. Kitchen and bathroom renovations can transform a house from an average property to the perfect family home for prospective buyers.

The kitchen is a place of gathering, where families can congregate and spend a lot of their time together. This is what makes them so integral to the living space. When renovating your kitchen consider installing a new oven, cooktop, kitchen bench or a butler’s pantry as a great way to up the value and liveability to your home.

Savvy buyers are also paying more attention to the orientation of a kitchen and how well it flows into living areas. Extending your kitchen into an open living space may be a larger project (and certainly a more time consuming task), but it will also add greater value to your home.

Another way to increase the value of your property without completing a full scale renovation is to update the bathroom. Having sleek modern bathrooms with newly installed showers, baths, benchtop, tiles and basins will improve the overall feel of the house, and can make an impact on its eventual resale price.

Small details can make a big impact, including new floor tiles or even installing a new or larger mirror to make a space appear larger.

–Greville Pabst is the Executive Chairman of WBP Property Group and will be once again appearing on the new series of The Block.

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Designers House Tours

Greg Natale’s Sydney home for sale, open inspection tomorrow

It’s an exciting day when a world renowned interior designer puts their home on the market. Greg Natale recently listed his Sydney apartment for sale with open inspections starting tomorrow (Saturday 16 July 2016).

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In the iconic Harry Seidler-designed Horizon Building in Darlinghurst, it’s the epitome of convenient inner city living at a prestigious address. The interiors are, as you’d imagine, super chic, with the award-winning designer’s signature touches everywhere.

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Greg and his partner love the building so much they’ve decided to stay, buying a bigger apartment in there.

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From the carpets and wallpaper from his own ranges to the custom black oak wardrobes and joinery throughout, this is a luxurious and stylish one-bedroom pad with a guide price of $1.1m.

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The bathroom has an integrated laundry and the bedroom, a fabulous walk-in robe.

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Every modern luxury has been thought of, including in-ceiling sound and ducted air con. The 71 sqm apartment’s layout has been maximised through an open plan layout, making it ideal for entertaining, with plenty of natural light through floor to ceiling windows. Wouldn’t it be nice to watch the sun go down over the city with a glass of wine on the curved balcony?

Open inspections starts tomorrow at 1.30pm, the apartment is being marketed through Bresic Whitney. Full listing and more information can be found here.

More about Greg Natale.

Photography by Felix Forest

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Kitchens RENO ADDICT

Increase your home’s resale value with Romy Alwill’s expert advice

Adding a few contemporary upgrades will not only make your house aesthetically appealing, but may also be very rewarding on sale day.

Romy Alwill E&S Ambassador 1

At the end of the day, it’s important to remember that not all buyers will have the same taste as you. Invest in quality items that won’t go out of vogue for a renovation that you, and potential buyers, will both love. One easy way to instantly add value is renovating two key areas – the kitchen and bathroom. Both spaces can inject a lot of style as well as drive potential resale prices up.

In the bathroom, a quality bath is must-have. A bath appeals to the large market of families with children who will be looking for convenience as well as style when purchasing a potential home. Space permitting, a double basin vanity can add instant value to home buyers who are looking to minimise morning and pre-bedtime rushes.

With cooking and entertaining at home becoming such a crucial part of our lives, the kitchen is one area renovators would be wise to focus on when considering a renovation for potential resale. One easy upgrade for any kitchen is switching an old out-dated sink for an undermount sink. This will add an attractive minimalist look and provide extra bench space, making the kitchen appear larger.

For the purposes of growing families and entertaining, I can’t recommend a large oven highly enough. Investing in a large 90cm oven will see you fitting in everything from roast dinners, through to your favourite recipe from Masterchef.

Another cost effective tip when considering renovation for potential resale is upgrading your light fittings. It’s impressive how fast technology in light fittings is changing, from halogens to LED’s. Make a statement by getting creative and keeping your fittings in fashion.

Another great tip to make a house more modern and streamlined is painting the wall and ceiling the same colour. This immediately makes rooms seem larger and won’t break the bank.

Romy Alwill is a judge on Reno Rumble and E&S Ambassador.

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RENO ADDICT

Unfurnished versus furnished properties and depreciation

When an investor first decides to put their property up for rent, often they will weigh up whether it is better to rent the property unfurnished or furnished.

Making this decision will largely depend upon the circumstances of the individual investor and the type of property they are renting. There is however a number of advantages and disadvantages an investor can take into consideration before making their decision.

Obvious disadvantages include the initial cash outlay an investor would need to spend to furnish the property.

On the other hand, furniture can make the property look much more appealing to potential tenants and help to reduce the time a property is vacant when untenanted due to the tenant’s ability to move in straight away. Furnishings may also increase the weekly rental value of the property.

One advantage investors don’t often consider when deciding whether to rent a property furnished or unfurnished, is the additional depreciation benefits these assets can generate above a normal depreciation claim.

Any removable plant and equipment asset entitles the owner of the property to depreciation deductions. These items are depreciated based on their effective life as set by the Australian Taxation Office (ATO) and the deductions claimed can make a significant difference to an investor’s annual cash flow. Some examples of plant and equipment items include dishwashers, ceiling fans, clothes dryers, garbage bins, curtains, blinds, light shades and furniture.

The following example helps to explain how depreciation is calculated for an investor who owns a property purchased for $420,000. The example shows the property owner’s annual cashflow without a depreciation claim versus with a claim for both a furnished and unfurnished property.

2015_TA445_Cash flow with, without, furnished dep schedule

As the above table demonstrates, whether the property is rented unfurnished or furnished, depreciation will make a significant difference to the property owner’s annual cash flow when compared to a situation where no depreciation is claimed at all.

In the scenario without depreciation the investor is paying out $79 per week. By claiming $11,500 in depreciation for an unfurnished property the investor will turn the loss to an income of $3 per week, while the depreciation claim of $16,500 for the fully furnished property will turn the loss of $79 per week into an income of $38 per week. Over a year, this represents a saving of $4,255 for an investor who rents the property unfurnished or $6,105 for an investor who rents the property furnished.

It is recommended that property investor’s always seek advice from a specialist Quantity Surveyor on the depreciation available for both structural items (capital works) and the plant and equipment assets a property contains. A specialist Quantity Surveyor will use their knowledge of ATO legislation to produce a tax depreciation schedule which ensures the maximum deductions are found for the property owner.

–Article provided by BMT Tax Depreciation. Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia-wide service.

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Expert Tips RENO ADDICT

Five quick-fix renos to boost your property price

Need to sell your property, fast? If you only have a couple of weeks until open inspection, these reno ideas will make a big difference to the sale price.

Describing a property as a ‘renovator’s delight’ no longer has the romantic overtones it once did. If you need to sell your place quickly, hiring a property stylist who can highlight areas of interest for buyers with well-chosen, well-placed furniture and accessories, as well as good lighting is the best value for money.

But if you have a fortnight up your sleeve before open home and want to make some changes, here are five quick renovations you can make if you don’t have time for a full upgrade.

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Image source: Pinterest

  1. Paint

A fresh coat of paint can liven up a property and even help to highlight some of its features. But a paint job isn’t just a matter of making the walls and ceiling look new, it should also be used to neutralise the look of the property as that helps the stylist add value.

Buyers want to see themselves in the place and you’re more likely to attract them if you give them a blank canvas for their vision rather than keeping that bright purple in the bedroom, funky as it may have been at the time it was painted.

Time required: Depends on the size of the property, how many coats and whether you want to do it yourself or hire professionals, but anywhere from 1-2 days to 1-2 weeks.

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Image source: Pinterest

  1. Replace, don’t renovate

Even a quick kitchen and bathroom renovation can take up to eight weeks so if you only have two weeks to play with, what should you do? Identify what looks the most dated and seek to replace parts and resurface fixtures rather than do a complete renovation.

Instead of gutting the kitchen, this might mean spray painting a tired looking splashback. In the bathroom, spraying tiles and resurfacing the bath or shower recess can make a huge difference.

In both places, replacing old tap fittings can instantly make sinks look newer, and while you’re doing the changeover you can also fix any minor leaks. Also consider replacing the handles to pantry cupboards, cutlery drawers and vanity compartments.

Time required: A few hours to a couple of days.

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Image source: Pinterest

  1. A grand entrance

Make a great first impression by focusing your efforts on the entrance to your home. Clean and tidy the entrance by removing debris, fixing the wobbly step and giving it a lick of paint. If you have greenery leading up to the house, landscape it.

Time required: A few hours to a day.

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  1. Opening doors

Speaking of entrances, doors can make a big impact so make sure they open and shut smoothly, without creaking, and the surfaces are free from scratches and dents.

Consider replacing the doors completely if they look dated, shabby or cheap. For the cost of a few quality doors you can transform your property significantly.

Time required: If you have the replacement doors ready, a day.

  1. Floor them

Worn, stained or wonky floors are highly noticeable, ruining the look of the property. You might be able to get away with a rug or a floor runner but if you can’t and need to replace the carpet or add floating floor boards, do it before your open home to make the place fresh from the ground up.

Time required: Professionals can replace the floors of a two-bedder in around 1-2 days. It’ll take longer for bigger properties or if you want to DIY.

Renovations don’t need to be big time-consuming projects. There are always little things that can make a big difference to the sales price of a property if you’re short on time.

Mark Foy is one of our resident experts and a director of Belle Property Surry Hills in Sydney.

Read all Mark’s articles. Got a question for Mark?

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RENO ADDICT

5 tips for an engaging open house when selling your home

Ready to put your home on the market? Pierce Cody, Owner and CEO of Cody Live, shares his top tips for hosting a successful open house.

1. Set the stage: Create a neutral environment, clean the house and keep it well maintained. Clear counters, ditch clutter (remove anything the least bit controversial) and maximise natural light. It may also be worth employing a bit of staging to set the mood. When it comes to pulling in the serious buyers it pays to have a stylist who knows a few tricks of the real estate trade.

2. Take advantage of technology: make sure your agent uses the latest technology to market your house. You need a professional presentation online including a map, directions, and unique selling features. Don’t forget to make the most of social media to keep people updated too. Having people register their interest on the day by providing an email address also means that you can contact interested buyers in real time on the day.

3. Keep potential buyers updated: there’s nothing worse than waiting around at an open house with no information. Buyers become frustrated and can often lose interest. A good way to keep buyers updated is via digital signage. Cody Live StoryBoards (see below) can be updated remotely and instantaneously. If an agent is running late, they are able to simply send a message to the StoryBoard to update all attendees. Simple.

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4. Enlist the neighbours: Neighbours can be some of the most important salespeople for the house. They want their friends to move into the neighbourhood therefore acting as potential scouts for the property, have your real estate agent drop off notification pamphlets about the open house and also welcome them to come in for a browse themselves.

5. Work closely with your agent: Have any relevant paperwork ready, the less buyers have to ask the more at ease they’ll feel in the property and the more time they’ll be able to spend imagining themselves in it.

https://youtu.be/C9Oob57jBas

For more information on Cody Live

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Before & Afters RENO ADDICT

Selling before you buy… patience is a virtue!

Before: front

When clients came to talk to us recently about organising finance for the purchase of their next family home, it was time to action the “slow and steady wins the race” approach.

Leah and Brett bought their first home in a sleepy lakeside suburb of Lake Macquarie, with the plan of giving it a bit of a facelift while they lived in the granny flat out the back.

Before: front
Before: front
After: front
After: front

“We built the granny flat so we could live there while we gave the house a cosmetic makeover,” says Leah. ‘But once we started to pull things out we realised it was more of a project than we realised – and my husband is a builder!’

So what began as a freshen-up quickly escalated into a complete renovation, with the home stripped back to its foundations before any new work could begin. What was to be a three-month job for Brett blew out by six months and as for costs…

But nine years down the track it’s (almost) a fond memory for the couple. “We lived in the granny flat for three years,’ Leah explains. “It was great!”

With two small children and a yearning for some more space, the family is moving on and has put their home on the market. And, despite already finding their next dream project, after chatting with us they have chosen to sit tight and wait until they sell their home before making an offer on the next.

“It’s hard to wait,” Leah says. “We’ve found a place that’s perfect for us. But once we sell this place, we’ll know where we stand, we’ll have our finance in place and we can make an offer from a position of strength. I just hope it all works out!”

Before: front
Before: back yard
After: back yard
After: back yard

Even though Brett and Leah are probably in a position in which they could organise a bridging loan, after working through their options, they decided to take our advice and wait it out and try to sell their own home first before doing anything else.

This way, they will know just how much money they have to offer and it also means they won’t be tempted to take a lower price on their own home just to relieve the financial pressure of a bridging loan. The worst case scenario will be having to find somewhere to live if they miss out on the home they want to buy.

While there is a good cased for bridging finance for a lot of people, it just wasn’t the approach the couple wanted to take. Bridging finance is no longer as expensive as it used to be and if you have the means to service the loan, most lenders should negotiate with you on a rate that is usually pretty well in line with the current home loan offering.

However, it can be expensive to set up and you will have to service two home loans until you sell your existing home; which may put you under financial pressure and tempt you to sell your home for less than it is actually worth just to ease the stress.

— Paul is the Director of CVG Finance, a leading brokerage offering financial services across all areas. 

Categories
Expert Tips RENO ADDICT

Two ways you can still make high growth returns in property

Image source: https://homesmississauga.wordpress.com/

If you’re looking to create wealth by investing in the property market, there are only two surefire ways to boost growth in a steady market.

It can be difficult to make money in a steady or declining property market and the current conditions suggest 2016 will be a pretty quiet year compared to previous high growth periods.

There are, however, two ways in which you can invest in the property market for growth: one is to buy well in an up-and-coming location, and the other is to improve the property through renovation.

Image source: https://homesmississauga.wordpress.com/
Image source: https://homesmississauga.wordpress.com/

How to buy in a high growth area

Every area has peaks and troughs and it doesn’t take a genius to tell you that you need to buy when property prices are low before the neighbourhood hits its straps and becomes the area’s next rising star.

The good news is you don’t need a crystal ball to do this, just some time and effort to do research and a willingness to take a bit of a punt on the next big thing. Here are some of the traits common to high growth areas.

They are on the fringe of popular suburbs. Take a look at the suburbs that are doing well commercially, then look at the neighbouring suburbs that are not quite at that level yet. You will start to see bargains in the fringe suburbs where properties are comparatively undervalued.

They follow a logical geographical path. Every metropolitan area has geographical limits. Where I sell, Sydney inner city suburbs, we have the harbour through the metropolitan area and the mountains to the west. When you look at the CBD, you can see there is only really one direction that offers high growth returns—towards the south. Everywhere else is full in price and has less chance for strong capital growth over a short period of time.

They are looking to improve. One key indicator of a potential high growth area is when people start investing in it. That could be existing residents fixing up their homes or the government starting new projects, so take a closer look at plans for infrastructure, in particular transport and other amenities such as shopping centres and community facilities. These types of projects will kick start a community and draw attention from non-local residents, which will in turn result in people investing in the area, creating high growth.

They start as lower socio-economic areas. It’s difficult to achieve high growth when property prices start high, so focus on lower socio-economic demographic neighbourhoods that have a lot of potential and are geographically in the growth corridor, keeping in mind the new projects planned.

They are undergoing a generational or zoning change. As soon as the demographic of the area grows old, the neighbourhood has the potential to be the next high growth area as it rejuvenates to cater to young renters and buyers, and young families. Similarly, when an area transitions from an industrial zone to a commercial and residential zone, it’s a chance to develop a space for the needs of the incoming community.

Other things to look for: proximity to sought-after schools, access to beaches or waterways and focusing on elevation and ridge views as a general rule. These type of properties sell better due to views and light.

Create value in the property

Don’t expect magnificent returns just by buying and selling the property at the right times, even if you do invest in the right location. You should also look to create value in the property through renovation, which is also a must if you want high growth but can’t buy in a high growth area.

Most people make standard cosmetic changes to make the property more presentable, perhaps an update to the bathroom and/or kitchen and a paint job, which is usually enough to make a small gain on the investment after expenses.

Real value, however, comes from creating something in addition to updating what’s already there. This includes:

  • An extra room
  • An extra bathroom or toilet
  • An off-street parking space or garage
  • Studio or granny flat above the garage
  • A deck or outdoor living/entertaining space
  • Landscaping the yard
  • Developing and rezoning to make way for apartments

Together with good presentation and a savvy purchase in an up-and-coming area, a property with this extra value can really boost your investment return.

—Mark Foy is one of our resident experts and a director of Belle Property Surry Hills in Sydney.

Read all Mark’s articles. Got a question for Mark?

Categories
RENO ADDICT

Depreciation for renovations made simple

Investment property owners often miss out on thousands of dollars due to two main reasons:

  • They don’t know what depreciation entitlements they can claim for renovations or refurbishments to their investment property
  • They don’t use a qualified quantity surveyor to prepare a tax depreciation schedule.

Follow the steps below to ensure your tax depreciation schedule is right the first time around.

livingareaHome_renovation_Sstock_136905506

Understand scrapping

Scrapping refers to the removal and disposal of any potentially depreciable asset from an investment property. When worn or old assets (like carpet and hot water systems) are replaced and scrapped, the owner of the property may be entitled to claim the remaining depreciable value for the items being removed as a tax deduction in that financial year.

Get a “before renovation” tax depreciation schedule

Arranging a tax depreciation schedule before completing renovations will save you time and money when making a claim. In case of an audit by the Australian Taxation Office (ATO), a valuation of all items in a property, as well as adequate photographic records is required.

Get an “after renovation” tax depreciation schedule

A second schedule is prepared after completion of the renovation, identifying the value of all new plant and equipment and capital expenditure within the property. The adjustments will be made to your tax depreciation schedule for a small adjustment fee and should not cost you as much as the initial tax depreciation schedule. The new schedule will outline all the depreciation claims available for the life of the property (forty years).

Only deal with a credible provider of tax depreciation schedules

BMT Tax Depreciation is a leading provider of ATO compliant and comprehensive tax depreciation schedules. The qualified team at BMT meticulously prepare and customise each and every depreciation schedule, ensuring that owners maximise the deductions they are entitled to. Scrapping is a complicated process that requires the expertise of a specialist quantity surveyor in conjunction with an accountant. By requesting a tax depreciation schedule you know you’re not going to miss out on anything and your accountant will love you for it.

–Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT Tax Depreciation.  Click here  for more.

Categories
Bathrooms Kitchens RENO ADDICT

Shower yourself with $2,210 in bathroom and laundry deductions

When it comes to depreciation, the bathroom and laundry areas of a rental property contain some of the items most often missed by investors when claiming deductions.

While shower curtains and bathroom accessories such as toilet brushes, soap dispensers and hampers have relatively low depreciable values, it is items like these which can provide property investors with returns straight away.

Items contained in an investment property which have a depreciable value of less than $300 can be deducted as an immediate write-off in the first financial year after their acquisition. These plant and equipment assets experience wear and tear quickly so investors may also choose to update them frequently. This can become costly for an investor if they are not maximising their deductions and claiming them correctly.

2015_CH456

Similarly, low-cost assets which have a value below $1,000 when first purchased and low-value assets which cost more than $1,000 in the year of acquisition, but remaining deductions after the first year’s claim are below $1,000, are eligible to be added to a low-value pool. Pooling is a method by which plant and equipment items will be depreciated an increased rate of 18.75% in the first year and at a rate of 37.5% from the second year onwards.

Items which have a relatively low value add up and while bathrooms and laundries are not the only rooms in a rental property where these low cost items are found, it is a place Quantity Surveyors frequently spot them when completing a detailed site inspection.

To examine this further, let’s take a look at some of the deductions a specialist Quantity Surveyor found for a rental property owner in the shared bathroom and laundry area of their property.

In the first five cumulative financial years, the owner of this investment property can claim $2,210 in deductions from their shared bathroom and laundry area alone.

Plant and equipment assets commonly found in a bathroom such as the shower curtains, the hamper and bathroom accessories such as the tooth brush and soap holders all had low depreciable values of $30, $40 and $80 respectively. As these items all were beneath the $300 threshold, the investor could claim an immediate write-off for these items in the first financial year claim.

The washing machine on the other hand was found to have a depreciable value of $1,250. As this value does not meet the criteria for an immediate write-off or the low-value pool in the first or second year, the item must be depreciated based on an individual rate and effective life enforced by the Australian Taxation Office (ATO). However, after the first two year claims have been made the item will fall below the $1,000 threshold and the investor can then claim the remaining years at the increased low-value pool rate of 37.5%. This means, that within five years, an investor can claim $1,055 in deductions for the washing machine alone.

Clothes dryers are another common asset found in the laundry of an investment property which these same rules may apply to, depending on the depreciable value of the particular dryer found on close inspection. This is a good reason to have an expert assess the items in your property for you. A specialist Quantity Surveyor will ensure the maximum deductions for each item found within an investment property are valued and calculated correctly using the depreciation rules available.

Capital works deductions for items found in the bathroom of an investment property pertain to the structural and fixed items. Examples include the bath, tiles, sink, taps, cupboards, the shower and towel rails. Depreciation for these items will be calculated at a rate of 2.5% over forty years so long as construction commenced within the legislated dates enforced by the ATO. In the first five years, the capital works deductions found in the bathroom alone for this investor cumulate to $1,005. The results will multiply as all of the rooms within the property will have depreciation deductions available.

To maximise depreciation benefits, ask for the advice of a specialist Quantity Surveyor and obtain a depreciation schedule. The difference it can make when completing your annual income tax return and the cash flow benefit are well worth making an enquiry.

–Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT Tax Depreciation. Bradley joined BMT in 1998 and as such he has substantial knowledge about property investment supported by expertise in property depreciation and the construction industry. Click here for more. 

Categories
Expert Tips Real Renos RENO ADDICT

How to plan a 30-day flip with Three Birds Renovations

By Lana Taylor (one-third of Three Birds Renovations)

You’ve all heard the cliché that “you don’t plan to fail, you fail to plan”. Well, in the world of property flipping that couldn’t be more accurate. And the most crucial thing to realise is that most of this planning has to take place before the house is even yours – in the settlement period (which usually takes about six weeks).

So for all you budding flippers out there, get your notepad and pencil out as I interview our Operations Guru-slash-Standover-Woman, Erin Cayless, to share the 10 steps to success when planning a 30-day flip. And even if you’re not flipping a house, just renovating your own home, you might pick up some tips on how to make your reno as fast and painless as possible. There’s nothing worse than a home reno that drags on ’til the cows come home — all that dust!!

river bennett photography 078

Lana: HOW IMPORTANT IS THE PLANNING STAGE OF A RENO?

Erin: In my opinion it is the most important part of a reno. Without thorough and detailed planning, the reno will fall apart and run over budget. This is especially important if you are running the reno yourself to maximise your profit rather than paying a builder to do it.

Lana: WHAT ARE THE STEPS TO PLANNING A 30-DAY FLIP?

Erin: I think there are 10 main steps:

Step 1. Before buying the house, contact a local certifier to get the 149 certificate checked. This will confirm that the renos you want to do at that property, can be done e.g – a 149 will tell you if you are in a flood zone which could mean you need to get a DA (Development Application) and that could take months. That would be a showstopper for us as we are only interested in doing renos that are either Exempt or Complying Development as a CDC can get passed through council much more quickly.

Step 2. Assuming you get past step 1 and have purchased the house ie – exchanged contracts, you need to spend time at the property to work out exactly what changes you want to make. This will include drawing up a new floor plan. We hand-draw our plans using a pencil, ruler and rubber (it’s easier and more enjoyable than you think). Remember, you don’t actually own the property yet, as it hasn’t settled, so you need to negotiate “access visits” with the agent. On one of our projects, the house was already vacant and the owners were happy for us to spend as much time in the house as we wanted. This is the ideal scenario as it gives you maximum time for planning. If the house is still occupied, you should still get at least 2 access visits and if that’s the case, try and stretch them out to be several hours in duration.

Step 3. If your reno plans extend beyond replacing just fixtures and finishes you may need to engage a structural engineer. If so, meet them onsite to discuss your hand-drawn plans and see if they are possible. The engineer will tell you how much significant structural work will be required to meet your reno vision.

Step 4. Meet a builder on site to run through your plans. Share with him any feedback your engineer may have given you. Give the builder a written scope of work (which you may have adjusted during his visit) and ask him to come back with a quote. You should repeat this step with a few builders to get comparative costs. Once you’ve received all the quotes from your builders, check to see if they are within your budget. Discuss with each builder if necessary – especially if you need to bring costs down. Appoint a builder.

Step 5. Engage a draftsman to draw up official plans for the certifier and ask your engineer to return to the site so he can prepare final drawings. Give the draftsman’s and engineer’s plans to the certifier for the CDC (Complying Development Certificate) application. The sooner you get the plans to your certifier the better. This also allows the certifier time to give you feedback on your plans if they think they need adjusting in order to get them through council.

A Three Birds reno BEFORE
A Three Birds reno BEFORE

House 2 after

Step 6. Choose a proposed start date for your reno. You can’t start your reno the day after settlement because you need to wait for council to issue the CDC, and that process can’t commence until they you are confirmed as the new owner. Get your solicitor to send a letter to your certifier confirming you as the new owners. How long the council will take to issue your CDC depends on the council and can take between 2-21 days. Ask your certifier to give their best estimate on how long approval will take based on the complexity of your plans and their experience with that council. Use that as your start date.

Step 7. Sit down with your builder and develop a week-by-week, day-by-day reno schedule with him. His work schedule will determine when other trades need to be onsite so it’s important to sort this out first before locking in other trades like plumbers and electricians.

Step 8. Co-ordinate all other trades (eg – tiler, plumber, electrician, landscaper, glazier, painter) to meet you on site and quote. Give them a written scope of work including the dates they are required on site (which you should have worked out with your builder prior). Get a few different companies to quote for the same scope of work so you can compare costs, then appoint your Tradies. This should ideally happen 2-3 weeks out from settlement.

Step 9. Determine what fixtures and fittings you want and can afford. You need to know this so you can order in advance and have them ready onsite when the Trades need them. Some things have long lead-times (eg window shutters) so you need to place orders in the pre-settlement planning phase.

Step 10. You’ve settled on the property and the house is yours. Get the letter from your solicitor (see step 8) and await your CDC. You may need to adjust your reno schedule based on exactly when the CDC comes through.

Lana: IS THERE ANYTHING YOU’VE EVER FORGOTTEN TO DO?

Erin: Ordering the porta-loo and working out where to put the man-hole — gets me at every house.

Read all Three Birds’ posts | Send Three Birds  question | Find out more about Three Birds

Categories
Styling

Come and join us at the Home Staging Symposium 2016!

We’re excited to tell you about an event we are part of this year, for aspiring and existing home stagers. There’s no doubt about it, home staging is growing in size and credibility as a profession in Australia and it’s no longer seen as just faffing about with cushions! These days vendors, and real estate agents, are realising they can add thousands to their sale price by employing the professionals at making homes more stylish, appealing and saleable.

iihs 2016 symp TWITTER blue

Naomi Findlay of the Institute of Home Staging, one of our resident experts on sister site Reno Addict, is the brains and enthusiasm behind this major event in Sydney in June. The owner of successful business Silk Home in the Newcastle and Hunter Region of NSW, she is passionate about educating people who want to learn how to sell their home, or other people’s homes, for more, and professionalising staging in this country.

naomi findlay

There’s a whole host of great speakers planned and I’m excited to be one of them! I hope to see you there!

Find out all about it and get your early bird ticket pricing here.

Categories
Expert Tips RENO ADDICT

5 property trends to watch in 2016

Image: Property Management Insider

Interest rate movements, changing neighbourhoods and shifts in investments are all elements that will inform the trends for the coming year.

What’s in store for 2016? Here are 5 hot topics to watch this year.

1. Take interest in rates

It’s anyone’s guess what the Reserve Bank will do with interest rates this year. Many believe rates will remain on hold due to stable economic growth, a fairly valued dollar and inflation remaining well within the target range. Prudent investors however, will be keeping a close eye on global markets, especially China, which may impact the RBA’s current neutral stance. Should the interest rates change in either direction, though, it typically takes more than one consecutive movement to have any real impact on property spending or the economy more broadly. In short, there is unlikely to be any surprises here.

Image: Property Management Insider
Image: Property Management Insider

The banks, on the other hand, are in an interesting position. Historically, they have followed the RBA’s lead, passing on hikes or cuts to variable rate mortgage owners. More recently, they have begun to act independently, sometimes raising variable rates of their own accord. Having now filled their coffers with healthy loan books driven by record low rates on offer last year, they now face some pressure by the Australian Prudential Regulation Authority to stem further growth in lending. This, to me, has the highest probability of causing a rise in mortgage rates.

Let’s not forget that cash is still cheap at the moment, however. A standard variable home loan costs 5.6% compared to 17% in the early 1990s. If you are planning on holding your property for the long term, rises and falls in interest rates are par for the course and, as long as your budget allows for these changes, you should be well positioned to ride out the natural fluctuations over time.

2. Neighbourhood watch

I specialise in the inner city Sydney property market and now, more than ever, I’m seeing buyers on the hunt for good value close to the city. Although finding these ‘diamonds in the rough’ is still possible with perseverance and a good agent, it is now harder after such an extended period of high demand. I would say suburbs like Darlington and Waterloo have a lot of potential because the CBD’s natural harbour borders mean expansion will inevitably head towards the south.

High potential areas like these often start out with a number of properties in need of renovation, but since they are well located, they develop quickly. Buyers swoop in and over a few years start to update the properties and upgrade the area. The area gentrifies, cafes and new services move in and property values accelerate.

If you’re looking to buy in or near a city, ask yourself these questions: Where is the CBD expanding? Where is the closest train line? What suburbs have the most potential for renovation? Where are the suburbs with edgy culture forming? Which suburbs have had consistently strong rental yields with minimal price growth?

3. Investors for rent

Rent yields affect investor demand so when property prices go up 30-40% and rents stay stagnant, investors start to drop out of the market. A few years ago, a 4-5% yield was quite common but because of higher purchase prices over the past two years, 2-3% is the going rate, making it less attractive for investors. I expect there will be fewer investors until rents catch up, and that’s likely to take some time.

4. Monitor stock levels

Stock levels relative to demand have a big impact on property prices. Whether it’s a buyers’ or sellers’ market can change quickly and this is largely driven by sentiment. If sellers decide not to list, that will lead to a restriction in stock levels. More competition for properties often ignites further price growth, leading to a better market for sellers. Once more stock comes on the market it could go the other way. You’ll get the best buying opportunities when stock levels increase.

5. Run the numbers

The continued strength of the one-bedroom market has really surprised me over the past 10 years. According to census numbers, the demographic which contains singles and couples without children has grown significantly in the inner city area, which seems to underpin the demand for one bedroom properties.

People in this demographic have leant towards one-bedroom apartments as it allows them to live in the location of their preference while minimising spending on first time property purchases. The choice of lifestyle over backyard space means there is a level of consistent demand for proximity to amenities like cafes, theatres and shopping centres despite the smaller square meterage.

There’s a census later this year, with the results available in 2017. I’d be watching this demographic and their preference for dwelling location.

Personally, I don’t think the market is going to do anything spectacular this year. Because we had 20-30% growth in most markets in 2014/15, it has to pull back because that kind of growth is unsustainable. In many ways it’s a relief for buyers looking to enter the market, so I expect they’ll relish my prediction that 2016 will be a fairly steady one for growth.

—Mark Foy is one of our resident experts and principal director of Belle Property Surry Hills in Sydney. Read all his posts. Send in your questions for Mark.