SUTHERLAND SHIRE - RENOVATION
GENERATING $460,000 EQUITY IN A SHORT 18 MONTHS
We transformed this original 1980's home in Sydney from a $700k home into a $1.3million 'work of art', by spending only $140k.
OUR STORY
With this next renovation project, we wanted to find a freestanding house in Sydney’s Sutherland Shire. The stunning beaches, national parks and all-round lifestyle location was the driving reason behind my decision. We knew this was going to be challenging though, given the median price for 3 bedroom houses was around $800,000 and we wanted to buy a 4 bedroom house for this next project - all for under $750,000.
Reaching out to some local real estate agents, we were able to locate a house (pictured below) that was about to be listed on the market. It ticked all of the boxes so far, being a freestanding 4 bedroom house with the scope to renovate. The first obstacle we had to overcome was the price. With an auction guide of $730,000 - $750,000, we knew we had to work quick and be strategic with our approach, in order to secure this property within budget.
With no time to waste, we organised a private viewing with the agent and got out to the property on the same day. It was in original condition (apart from carpet and paint) and was ripe for a renovation, which aligned perfectly with our strategy and goals for this acquisition.
After going back to the office and crunching some numbers, we knew this was the one given its potential to add-value. Starting with a slightly lower offer of $680,000 to test the waters and give us some room for negotiating, this was rejected - no surprise really. They came back to us with a counteroffer of $720,000 to sell it pre-auction.
After going back and forth with negotiations for the next 24 hours, we were motivated to get this one over the line. We submitted a ‘best and final’ offer, along with a signed contract in front of them - how can anyone refuse this, right? The next call we received was one of the most exciting to date. Our offer of $700,000 had been accepted - a done deal all within 48 hours!
10% deposit:
PURCHASING
COSTS
LMI:
Stamp duty:
Legal fees:
Disbursements:
B&P inspection:
TOTAL:
$70,000
$15,600
$27,000
$1,900
$1,600
$660
$116,760
RENOVATION STRATEGY
As we used most of our budget on the acquisition, we decided to rent the property out for 6 months allowing us to save additional funds for the renovations, plus get some capital growth which we could extract later on.
We put the property on the market for $500 per week (3.7% renal yield) and found a tenant quickly. A lovely local family who just sold their home and needed a bit of time to find and buy their new home - this worked out perfectly! The tenancy went smoothly and we were now approaching the 6 month expiration. We asked our mortgage broker to order a valuation so we could see how much capital growth gains were made in this short timeframe.
The valuation came back at $780,000 which meant we had achieved approximately 11% capital growth in 6 month. We were stoked! We could now extract 90% of this equity from the lender (as our loan was at 90% LVR) - that’s $72,000 to contribute towards our renovations.
We spent the past 2-3 months planning the renovation (design and layout) along with calculating what it was going to cost all up. We even had a few different designs ready to go, depending on how much equity we were going to be able to extract. We decided to go for our $120,000 renovation design (plus a $20,000 buffer for any surprises). This meant a contribution of $48,000 from our own pocket to begin with and the buffer set aside for later use.
Before
After
During
LIVING, DINING & KITCHEN
Rather than having 3 small rooms for each of these uses, we decided to create a modern ‘open plan’ area.
This would combine all three rooms to open up the whole space and make it feel larger, whilst allowing natural light to flow from front to back.
Two structural walls were removed to make this happen with some large LVL’s installed in the roof space for a streamline appearance - what beams!
Before
After
BEDROOMS
The bedrooms were OK however the awkward position of the doors limited the use of each space. We relocated two of the doors, so those bedrooms could accomodate built-in wardrobes.
Given the limited living space for a 4 bedroom house, we also decided to turn one of the bedrooms into a multi-purpose space. This would allow the room to be used as a 4th bedroom, rumpus room or even as an extension to the living area. This was achieved by relocating the door to the other wall and putting in a double cavity slider, allowing the doors to be hidden away from sight in the wall when not required.
The other major change was the master bedroom. We wanted to create more of a ‘wow’ factor when walking in, which meant more space was needed here. We decided to combine the bathroom and WC in order to relocate the bathroom door - this allowed us to increase the size of the master bedroom and put in a huge built-in wardrobe. Who doesn’t love storage, right?
Before
After
Before
After
BATHROOM & WC
As previously mentioned, we decided to combine the bathroom and WC so that we could create a proper master bedroom.
The original bathroom contained a combined bath-over-shower, however we were really determined to put in a freestanding shower with seperate bath. This would appeal to more families in the future and is a safer option for elderly people - rather than having to step up and over into a bath just to have a shower.
This required careful planning given the small space. We chose a cavity slider to maximise the internal space within the bathroom, whilst moving the opening slightly to the centre of the hallway for aesthetics. This now creates a stunning look when viewed down the hallway, with the bath tub and lit-up niche in direct view.
After
After
LAUNDRY
Before
After
The original laundry was not going to win any design awards either - it was literally a tub on a concrete slab with external access to the room.
Having internal access is desired in today’s households, so this was an important change we wanted to make to this room.
The other big change was the addition of a shower and toilet given this was a 4 bedroom house. We thought it’s essential to have a 2nd shower and toilet.
Getting the design right was important and challenging, given the room was only 2m x 2m and we had quite a bit to fit into this space.
The large custom made 2m x 1.2m wall mirror was strategically chosen to create a sense of space and rebound natural light throughout the room. It feels twice as big now!
Before
After
Before
EXTERIOR
It was time to get rid of the 80’s brick design and bring new life into this home.
We were tossing up between painting, rendering or bagging the brickwork. We decided to go with the bagging option for the following reasons: it’s easier to DIY than render, it looks more expensive than just painting the bricks and we love the textured finish - putting some character back into this tired facade.
We also removed the two large trees in the front yard - these were overhanging the house and considering we’re in bushfire zone, we decided this was the safest option. We also levelled up the front yard (to prevent water runoff towards the house), laid new turf, put up a retaining wall and added a nice merbau deck with flush lighting for that grand entrance effect.
The roof was restored and painted monument, along with the gutters and downpipes. The garage was updated with epoxy flooring, a merbau door was added and a workbench with plenty of storage.
The front porch was also transformed with light grey tiles over the original concrete slab, a merbau ceiling with black framed LED down lights and oversized pot plants to tie it all in nicely.
The backyard is yet to be completed., so stay tuned for the amazing transformation to come!
After
Before
After
THE
RESULTS
Purchasing Costs:
Renovation Costs:
Valuation:
Net Equity Gain:
ROI (OVERALL PROJECT)
ROI (ON CASH INVESTED)
$746,760
$140,000
$1,300,000
$413,240
47%
151%
THANKS FOR JOINING US ON OUR JOURNEY
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