WA Advice on Cheap Renovations in Perth

Hey,

First time post, but have been reading the threads for a while so thanks for the information.

I am currently living in Sydney but I am moving to Perth once I have finished the renovation that I am on. (Carpentry job for a client not Property Investment).

I am moving there because I see all around the CBD there are properties within the 200k-250k mark with the potential for me to use my skills and renovate. I am a builder and have been for the past 12 years and I have always done residential work so I have seen it all.

I currently teaching myself the other side of the process which is the buying and selling of the house and everything else that comes with it which is new to me.

I am also single and plan to live in the house whilst renovating.

My question really is, is it too good to be true with these prices? I see I can buy a cheap 60/70s style place and transform it quickly and efficiently, to then maximise the end goal of being either hold on to it or rent the place out.

Anybody have an opinion on this plan?

All advice appreciated and thank you in advance.

Thanks

Luke

 

$200k/$250k not sure what you're looking at "around" CBD

 

https://www.realestate.com.au/prope...ge=rea:buy:srp-map&sourceElement=listing-tile

 

I’m not sure I’d call it “too good to be true” if after all that renovation work you wouldn’t barely get your costs and effort’s worth back in capital growth.

Which I imagine would be the case nearly all the time with properties in that price range.

Comparing prices to Sydney otherwise isn’t really that helpful.

 

Hey thanks for the response.

But would it not depend on how much you put into the renovation?

I’m not talking about knocking the place down. I’m talking about new bathroom & new kitchen and modernising the place.

I know how to do it quickly and efficiently being a tradesmen.

and yep I’m definitely not comparing prices from Sydney to Perth. Two different leagues

 

Why don’t you compare renovated / better looking with unrenovated properties in the same suburb and see if the price difference is worth it? And best to look at sold price section (adjust for price movement if they are sold at different times; and other attributes) - for sale price is not as reliable.

 

Brookdale is not exactly around the CBD. It is the suburb next to Armadale on the outer fringe of Perth.

 

okay mate well thank you for your input

 

This might be a better project, original 60s kitchen. Looking at block value in area possibly over priced
10 Berehaven Avenue, Thornlie, WA 6108 https://www.realestate.com.au/property-house-wa-thornlie-137264118

 

I found another down this way that was as is, requires/ being sold as needing renovation but I can't refind it.

28 Andromeda Street, Rockingham, WA 6168 https://www.realestate.com.au/property-house-wa-rockingham-136895450

 

What would these rent for, pre and post reno?

 

100% ill have

there are houses very similar currently being advertised for rent at between $370 - $410 a week in Rockingham

 

Without the reno what would it rent for?

 

https://www.realestate.com.au/property-house-wa-rockingham-136895450 that is the property that is going for $280,000.

https://www.realestate.com.au/property-house-wa-rockingham-137975382 this is a similar property that is a 3 minute drive from the above property. Currently under offer at offers from $399,000.

Difference of $119,000. These numbers are rough but I know that I would be able to transform property number 1 into or better than property number 2 within that budget, I would 100% have money left over.

I am new to all of this, but from my building experience I know that renovation would not cost me anywhere near $119,000

 

Not many 3x1 under $300 a week in Perth greater area.

 

Your idea has merit. As a builder you'd be one of the few people who could put in a lot of sweat equity for less than the average Joe.
The prices in those areas are cheap for a reason, I'm assuming we are looking at areas which are 30km or so outside of the CBD and are generally in very low socio economic areas. So you'd need to be careful that you're not buying into trouble.
My opinion is if you could increase the budget and put those skills to use in a better area the the ROI would be even better.
From a strategy point of view if you are using sweat equity to increase yield/value then you will need to consider what entity (personal name, trust etc) you are going to keep them in as it will have some tax ramificatiions if you do a few.
Also please be aware that if you are used to renovating in other states that renovating in Perth is not that easy. Often the floor are concrete so there is a lot of cutting and chasing in concrete to move plumbing then there are brick internal walls that are a hassle to move, cut, chase unlike timber framed internal walls.

 

Thank you for your input. I will have a look at better areas and yep Perth is a lot more brick & tile and not so much timber, so I’m prepared for that.

 

Madora Bay @Luke Turner might pick up a gem or two.

 

How many places are you going to buy?
One at a time then onsell and buy another?
Or buy a few and hold?

If you can only afford one then you may be wasting your time rennovating in a boom market.
Say you rock into Perth with 360k in cash
eg - you buy for 300k , renno for 50k (add 10-15 for purchase at least) , sell for 420, profit after costs 50k, time between purchase and settlement minimum 6 months , but only 3 months of physical work, 3 months potentially wasted or just labour elsewhere

then you go to buy the same 300k house again but now market has grown and that house is 350k - can you still afford to purchase and renno whilst paying living expenses with only circa 400- 410 in cash?
Point is that whilst you are making money you are still kind of chasing your tail and if you get caught out with a big market boom in between the time you sell and settlement then your plan could be ruined or you will have to take a step back to cheaper properties.

I say all this assuming you wont be able to borrow money.
Best way to avoid the above tail chasing scenario in a boom market is to have multiple properties on the go at all times so you are never out of the market when it moves.

 

If you're looking to build a portfolio of multiple properties and have confidence in the Perth market, I'd be stacking up on assets to expand my base rather than waste the money on renos. That can always be done later. If you have the serviceability and want to build a portfolio I reckon hold off on renos and expand your base first. Especially if you believe there's more growth to come.