[Nathan Birch]

Purchase price: $106,000
Value at purchase: $140,000

Equity Gain: $65,000
Rent: $145pw

Current Value: $200-220,000 (after $12,000 renovation)
Current Rent: $270pw

Therefore within 6 months yield is 13.2% of purchase price. Interest rate @ 5.2% fixed on $102,000 + Council rates $1000pa + Strata $1200pa + Management fees 5.5% + Tenant Insurance $300pa = Cash flow positive $97 per week or $5044pa.

This Unit is Located 20km from Sydney cbd, and had a full renovation down to the light switches, doors, hinges, everything was removed and replaced.

The big play card here is the equity Gain of $94,000 over 6 months allowing to redeploy funds into future purchases and repeat process once again.

When doing unneeded renovations I always look at what equity can be gained, along with the CoCR. I aim to make a 40% return pa if I am doing a reno to improve cashflow. Therefore Increased rent in this scenario is $125pw or $6500pa, $6500/$12000 = 54% pa return on investment .

Attached File(s)

•  1.bmp (801.65K)
  Number of downloads: 69
•  2.bmp (801.65K)
  Number of downloads: 28
•  3.bmp (801.65K)
  Number of downloads: 22
•  4.bmp (801.65K)
  Number of downloads: 12
•  5.bmp (801.65K)
  Number of downloads: 16
•  6.bmp (801.65K)
  Number of downloads: 14
•  7.bmp (801.65K)
  Number of downloads: 15
•  8.bmp (801.65K)
  Number of downloads: 11
•  9.bmp (801.65K)
  Number of downloads: 9
•  10.bmp (792.8K)
  Number of downloads: 9
•  12.bmp (801.65K)
  Number of downloads: 10
•  13.bmp (801.65K)
  Number of downloads: 9
•  14.bmp (801.65K)
  Number of downloads: 13
•  15.bmp (801.65K)
  Number of downloads: 12
•  16.bmp (792.8K)
  Number of downloads: 17
•  17.bmp (801.65K)
  Number of downloads: 15
•  18.bmp (801.65K)
  Number of downloads: 18
•  untitled.bmp (801.65K)
  Number of downloads: 18

[firstmillion]

Hey Nathan,

How did you manage such a reno in 12k budget? Do you have the break up ?

[Nathan Birch]

$1500 kitchen
$4000 bathroom
$2500 flooring
$1000 paint/doors etc
$3000 labour

Approx.

[MJ Anthony]

Nathan Birch, on 07 March 2010 - 10:53 PM, said:

$1500 kitchen
$4000 bathroom
$2500 flooring
$1000 paint/doors etc
$3000 labour

Approx.

Now you need to explain the other part - ie, how you managed to do the reno in $12k.

I spent $20k on my first reno. New bathroom, new lights and paint inside. Painting inside required a complete primer due to the previous owners painting the walls with gloss. Urgh. Anyway, my point is, I didn't renovate much of the house, and spent $8k more....

[Nathan Birch]

Just contacts, and planning

[tyger]

Nathan Birch, on 08 March 2010 - 09:05 PM, said:

Just contacts, and planning

I can second those figures.. can definitely do a full reno for $12k.

[James]

I see a lot of people doing reno work on their properties. Experience suggests an average of about $12-15k, which matches my own experiences. There's also the odd $20-30k when new rooms are being added.

[Andrew]

For some people, if you can do alot of the work yourself then you can save alot of money...if you have friends that are tradies that do cash jobs on the cheap - even better

[Nathan Birch]

Yeh can save some money if you plan a renovation properly you can get others to do your labour.

This project didnt involve much of my labour. I filled the skip up, and I held the door whilst it was being planed, the rest was done using others labour.

[KISSfan]

Nathan Birch, on 21 March 2010 - 11:34 AM, said:

I held the door whilst it was being planed

Can I take some of the credit for that too, lol.

I also took enquiries from the neighbours.

I'm cracking myself up here Nathan.

Regards
Marty

[Nathan Birch]

KISSfan, on 21 March 2010 - 05:03 PM, said:

Can I take some of the credit for that too, lol.

I also took enquiries from the neighbours.

I'm cracking myself up here Nathan.

Regards
Marty

Oh credit to yourself aswell mate sorry for not mentioning you, we worked hard that day.

I forgot to mention my site manager "Paul". LOL

[KISSfan]

Nathan Birch, on 21 March 2010 - 08:47 PM, said:

we worked hard that day.

I was in supervisor mode that day.

Regards
Marty

[joyce]

I completed a full unit reno on 6k. I did some work myself such as ripping out old cupboards etc and used builders trade accounts and paod them back cash.

Do what you have to. Be nice to your tradies.

Also i have sold a car and car pooled to finance property. You do what you have to for long term gain. Its a way of life, thinking and attitude that some people naturally do not have.

It also comes down to drive, thinking outside the square and pro activeness.

It is so easy once you start.

I always buy low start up, they return profit quicker and allow instant equity if you get the price down and minus the deposit.

[KISSfan]

joyce, on 30 July 2010 - 03:14 PM, said:

I completed a full unit reno on 6k. I did some work myself such as ripping out old cupboards etc and used builders trade accounts and paod them back cash.

Hi Joyce.

If you don't mind me asking, what did you do/get for 6K.

Regards
Marty

[MaceTyz]

Hi guys,
Congrats on the profits you've done VERY well!

I am 23yrs old and bought my first property around 18-24mths ago for $294K and needed to paint throughout and lay carpet + put in an inbuilt bar into the downstairs room. I have recently had the place revalvued at $350K however the valuers did a drive-by valuation only. How can you be sure of getting a bank valuation via a walk-through so that the reno's and additions you have made can be taken into account (obviously if you spent $20K putting in a new kitchen and bathroom you would want those seen).

Thanks guys!!