Our new challenge: renovation
We suddenly, unexpectedly have to move (ugh!) and the rental market right now is extremely tough. So after a fruitless search for another rental, we're moving into Mr Bargain Queen's investment property. He bought the place with his brother years ago and never intended to live there himself. Living there will be $100+ per week cheaper than renting another place would cost us, or $60/week cheaper than our current expenses. More importantly, it will mean The Bargain Queen can direct her considerable design talents to renovating the place.
Ideally, at the end of this adventure we'll sell the place for a decent profit. However, since the Sydney property market is pretty flat, it might be harder to sell than we'd like. So we're hedging our bets a little and only making improvements that would improve the rental return as well as the sale price, just in case.
So how does The Bargain Queen start a project like this? Poring over the gorgeous pics in decorating magazines? Choosing colours? Heading to a showroom to buy a bunch of great stuff?
Nope, none of the above. The Bargain Queen's starting this adventure with a whole lot of research. She's in new territory here, so before she spends a single cent she's building up her knowledge so she knows exactly what's involved, can pick a good deal when she sees it, and hopefully avoids all the pitfalls.
So far this has involved:
- Checking the place over. The Bargain Queen's biggest concern right now is that she's yet to see in inside of the apartment she's agreed to live in for the next few months. She's had a really thorough look at the outside but because the tenants live there for a few more weeks, she hasn't been able to go inside. All she has is a roughly drawn sketch, showing that the place has a bedroom, loungeroom, kitchen, bathroom, external laundry and car space. Mr Bargain Queen is in the process of arranging a visit through the real estate agent but these things take time and until then, The Bargain Queen's working blind...
- Researching sale and rental prices. Before she redraws any money from the mortgage to pay for the reno, The Bargain Queen is making sure each improvement will pay off financially. That means knowing what different types of places in the area sell for, and what features put apartments at the top - and bottom - of the price range. The state government in Sydney releases official sales and rental figures which give average price and price range for apartments in the area, but they're always a few months out of date. For more detailed information, she found sold property details on realestate.com.au which include the full listing for each property as well as the sale price. This is great for figuring out the features that more and less expensive properties in the area have, but since it doesn't list every property that's sold in the area, she's also going to visit some open inspections to get more of a feel for the market in the area.
- Talking to people who've lived there. The Bargain Queen would ideally live in the place for a while before she starts doing anything, to get a feel for what it's like in each month of the year, but to finish renovating by the end of the year that just won't be possible. So she's really lucky that her mother-in-law and brother-in-law have both lived there! She's starting picking their brains about what it's like to live there (way too hot in summer), who's who in the owner's corporation and a whole lot of other things you only know if you've lived there.
- Reading up on council regulations. The apartment is in a heritage-listed building, so there are a lot of regulations around what can be done to it. A lot of this information is on the council web site in long, boring policy documents; the rest depends on calling the council, speaking to the right person and asking the right questions. It's a lot of work to make sure everything is bureaucratically correct but considering they can order that unapproved building work be reversed, it's worth making them happy!
- Learning more about heating and cooling. One of the most important improvements will be installing a reverse-cycle airconditioner, or some other heating and cooling solution(s). Since The Bargain Queen has never done this before, she's learning as much as she can beforehand. The most helpful web site she found is the government's energysmart site. So far, she's determined that a full ducted system will be out of her price range, but that a split system might be feasible; and that the whole 50sqm (500 square foot) will need a 4-5kW airconditioner to keep the whole place cool. (Or 4kW to just cool the bedroom, lounge room and kitchen.)
- Researching the cheapest sources of materials. To find great bargains, you need to know where to look - and when it comes to building materials, The Bargain Queen doesn't know this... yet. So she's been comparing prices from the comfort of her computer and has already found some hot tips. eBay is a great source of doorkobs - there are a lot listed at half the hardware store price or less - and also has a few listings of other people's left-over building materials. For bigger materials like tiles, basins, taps etc. she'll be checking out Laws Auctions for surplus supplies. She's also pored over the Ikea catalogue to see what they offer and establish some benchmark low prices, and she picked up a hot tip while reading the newspaper articles on domain.com.au: some people in ritzy suburbs re-do their kitchen every five years and get rid of top-quality cabinetry, stone benchtops, designer tapwear and great appliances cheaply when they do. The Trading Post has a few of these listed so The Bargain Queen's investigating what would be involved in retro-fitting a kitchen into the apartment. Fingers crossed all this research will lead to some great bargains! (PS: While these links are Sydney- and Australia-specific, most cities will have similar resources if you take a look.)
- Hunting out contacts. Talking to a pro can provide an enormous amount of useful information in just a few minutes, but good advice can be expensive. So The Bargain Queen's been taking stock of the pros in her life with a view to casually discussing her renovation with them as necessary! A couple of The Bargain Queen's brothers have worked in the building trades, so even though they're in another city, hopefully she'll still be able to ask them a few questions. Two of her closest friends are lawyers who are used to her begging them to look at contracts occasionally. Mr Bargain Queen's best friend has been renovating his house - and his wife's an architect. Plus Mr Bargain Queen's cousin is also a builder, albeit on huge commercial projects. And Mr Bargain Queen's brother (joint owner of the apartment) knows a couple of handymen and most of the people in the owner's corporation. So with any luck, if The Bargain Queen can't find some information she needs, there'll be someone she can ask... and if she remembers to discuss the project with some of these people when/if it seems appropriate (being careful not to wear out the friendships because they're much more important than a house!) they'll tell her when she's getting things really, really wrong.
- Reading a home improvements book. Which home improvments are a DIY job and which are best left to the pros? And more importantly, which DIY jobs are actually within The Bargain Queen's reach and when should she bring in a handyman instead? There are lots of books with step-by-step pictures showing how to carry out various DIY home improvement jobs. The Bargain Queen's reading one of them, not only to answer the questions above, but also so that she understands what she's paying others to do to help make sure she doesn't get ripped off.
- Salivating over the decorating mags. OK, The Bargain Queen's not just sticking to the serious stuff - she's allowed to drool just like everyone else. Home decorating mags are a great source of ideas and the pictures are so beautiful! There's just two things she's keeping in mind when she reads them: firstly, she's choosing things that will impress future tenants or buyers so her own taste is irrelevant; and secondly, her budget is nowhere near a typical magazine home budget so there's no point falling in love with anything 'til she's checked how much it costs. With those things in mind, she can enjoy those gorgeous photos, make note of some good ideas, and still not succumb to decorator fever... we hope!