ABC's & 123's of Renovation Management?

[harcoh]

G'day PI's. I'm taking on my first full reno consisting of new kitchen, new bath, re gibing all the ceiling and some walls, possible Hot water tank to high pressure (on the fence there), all lighting, minor electric (outlets, light switches), outside decking, replacement of windows, sliders, full paint in and out including roof (galv alum), yard and fencing. Oh and a garage (maybe? time & $$$)! Heaps of you have been here.

Successful and unsuccessful, I would like to hear what you consider priority 1,2,3. What worked and what didn't according to your plans. If you just want to suggest some of your basic A,B,C's regarding your reno process that would be great as well. I have a budget of course and I do believe I have covered all aspects regarding materials, permits, skip, additional labor, etc. Most of the labor will be done myself unless it requires special licensing of course.

I do have a general layout of how and when I will make my improvements though hearing from the experienced would and should fine tune my plans I'm sure. I understand that the work is different with most projects but any advice would be great.

[SuperDad]

Gosh harcoh,

That sounds like a complete rebuild.

I'm just off to work on my reno, but when I get back later I'll add some thoughts.

Paul.

[SuperDad]

One question,

Is this to be your own home, a buy-and-hold, or a do-up and flick?

Paul.

[Heg]

good luck!

Blimey - you've got your work cut out for you. Mark and Sharon (RTP) will probbaly answer this one for you but from my experience there are a few things you NEED to do.
Make sure you are on site every day to project manage. One trade not showing up or being late will throw out the rest of the trades and can cause major problems. Also talk to the trades before you start and find out what order you need to do things. It's no good booking the painter after the carpet layer has been in or the gib stopper before the windows are replaced. This may seem obvious but it will save you time and money if your plumber/painter/gib stopper only has to make three visits instead of six.
Order major items like kitchens, bathroom fittings and windows well in advance. It's easy to choose what you want and then discover there is a 12 week lead time. (and be wary of "it'll be here on Tuesday" - YEAH RIGHT)

[harcoh]

SD, Own home or maybe a flick. I'll let my wife decide when I am finished.

[Heg]

SD, Own home or maybe a flick. I'll let my wife decide when I am finished.

Makes a difference to the quality of fixture and fitting that you use so maybe a good idea to decide prior to doing the reno....

[Monid]

SD, Own home or maybe a flick. I'll let my wife decide when I am finished.

Wrong answer, you need to know which, since it will tell you what to buy. If it is for you definitely get a mains pressure cylinder. If not then leave it as is. Flicks you should mostly do cheap superficial work, since this will increase value as much as possible for as low a cost as possible. If it is for yourself then you want to make it a nicer place to live in, and should be willing to spend a bit more.

Cheers
David

[harcoh]

considering better quality items is important in todays market (i believe). I believe this will be a justifiable edge in reselling against most others that use the basic and cheapest. I'm not saying that i am going to purchase the most expensive and elite of fixtures, cabinets, appliances, etc. I will most certainly do my best to get the best value for my $$ though. My plan is to purchase things I would enjoy having in my home. Sticking to my budget. I am considering an achievable profit with the overall numbers as well.

Regarding the mains system I personally wouldn't have it any other way. Thats why I am on the fence.

Can you really say doing the least amount of superficial work on a reno will get you the most amount of $$$ in return in todays market or the market of 3 months from now?

I can see it when I walk those homes! It just makes me put in a lower offer.

[SuperDad]

harcoh,

I'm with you on the quality front, in many cases. Why replace old light fittings with chinaman's hats when, for an extra $15-$20 you can get a nice modern light? Why put down nylon/polyprop carpet when, for an extra few dollars and some good shopping, you can have quality wool carpet?

I am by no means a highly experienced renovator - I'm on to my fourth house now. (The third one is the one we are living in, and it is a bomb site.) I do think I have learnt a few things, though.

The two main things you need to know are:
(1) your time frame - how long will the project take?
(2) what skills do you have, and what will you need the professionals to do?

To a certain extent, your timeframe will determine what you can and can't do. You may, for example, fancy trying to stop the ceiling gib yourself. However, if time is a factor, it is likely best to get a professional. (They will also do a better job.)

If you are under time pressures, then this won't be the best time to try and learn new skills.

Also, is it completely necessary to re-gib, or can the old gib be salvaged with a sanf, fill and skim coat? This is a big job, especially ceilings.

As heg suggests, get all of the tradies lined up well ahead of time, and order all materials ahead of time also. I took over a property last Friday. Over a month ago I organised for carpet to be installed on 19th December (next Wednesday). That was the only day they had left this year. My choice of capet layer was determined by where I sourced my carpet. This imposes certain deadlines - most importantly, I need to have the old carpet lifted, and the ceilings and walls painted by next Tuesday. I am right on track - carpet is lifted, and I am priming the ceilings later today. The new kitchen benchtop was ordered last month. Once carpets are in, I can then paint door and window frames, and doors. (Ideally this would be done before carpet, but timing did not allow this.) And so on.

The point of my example is that it is crucial to have a plan, and stick to it. In order to know how to structure your plan, you need to know the best ordering of the tasks to be completed.

I'll give my opinion on a priority list in the next post.

Paul.

[SuperDad]

Priority list.

1. Ceilings.
2. Electrical work. Once the ceilings are in, you get your lights in, and then you can work after dark in good light. I find halogen work land, while handy, are not as good as ceiling lights. On the subject of electrical work, this is really where you need to decide whether you are going to live there, or sell. I don't believe the cost of putting in extra sockets, for example, pays a good return. Many people don't look at the number of powerpoints in a house when buying. Also, most people don't view a house at nighttime, so would have no idea whether the lighting is adequate. Electrical work is expensive.
3. Painting. You can paint most areas while tradies are doing kitchen and bathroom. If ou are going to do kitchen and bathroom yourself, be prepared for things to take twice as long as you think, and be prepared to uncover problems. Also be aware of what requires consent and what does not. a sure spanner in the works of any house sale is non-compliant works.
4. If you are going to replace the HWC, make sure the plumber does this while they are onsite doing other work. You will need a sparky to wire it in after it has been plumbed in. Try and find a plumber who is qualified to wire it in - this will save money.
5. Flooring. Ideally this should be done last.
6. Outside work - this is ideal to do while tradies are inside.

Oh, and one important thing I forgot in my previous post was: Budget. Have a good idea of what return you will get for each dollar spent, and how many dollars you have to spend.

Have fun.

Paul.

[SuperDad]

A final thought

You need to be clear on your intentions for the property from the start.

Are you aware of your tax liabilities should you intend to do up and sell?

Have you purchased the property yet?

Paul.

[leapy]

• Try rigorously to come in within budget.
• Definitely have a contingency source of funds in case of unforeseen blow-out.
• Work with tradies you are able to communicate well with - inevitably there will be times when you are going to have to have uncomfortable discussions with them.
• Get tradies to agree to deadlines then do your utmost to keep them to those deadlines. Remind them that you are a small business too.

Just a couple of quick thoughts. Good luck.

[dasphinxter]

You need to be clear on your intentions for the property from the start.

Are you aware of your tax liabilities should you intend to do up and sell?

Have you purchased the property yet?

Paul.

Hi Paul,

Is this the same for property where there is no improvements to be done eg brand new building. Whats stopping you from changing your intention after you have settled into an LAQC if things change?

There must be instances or a time where you can safely liquidate properties in your LAQC with out 'tainting' the entity. Do you have to pay IRD anything over and beyond depreciation 'claw back' on that sale?

Regards
Alex

[Heg]

Hi Paul,

Is this the same for property where there is no improvements to be done eg brand new building. Whats stopping you from changing your intention after you have settled into an LAQC if things change?

There must be instances or a time where you can safely liquidate properties in your LAQC with out 'tainting' the entity. Do you have to pay IRD anything over and beyond depreciation 'claw back' on that sale?

Regards
Alex

My advice ? -Seek professional advice from an accountant who knows what they are talking with regard to property trading / investing . Money spent now getting everything into the right structure will save you a fortune in fines/penalties etc from IRD later down the track.

[harcoh]

You need to be clear on your intentions for the property from the start.

Are you aware of your tax liabilities should you intend to do up and sell?

Have you purchased the property yet?

Paul.

Well SuperDad, My intentions are to make something out of nothing. The potential is there. Through thorough research I was able obtain all the facts needed (without spending a dime on QV, Torrent, or the like... extremely tempting at times) to purchase the right property for the right price. This took a good month or so and about 9 other different offers on different properties until I finally worked a deal on my terms. I know 'whats for sale in the area, for what price, how long it been for sale. What ever has been sold I find out (or trying to find out) what it sells for. Buying right was my first goal and it has been achieved. So yes I have purchased. Appreciate all your thoughts as well, good stuff aye.

As far as tax, My philosophy is this ' If taxes need to paid then I have earned a profit'. I am learning and open for suggestions (legal) regarding Tax on a sale of property.

Now, Contingency. Leapy, I have a contingency in place of course (around 15% of my overall budget). Am curious what others may think about that. For my first big reno I think this should be adequate.

Budget Budget Budget!!! All over it. well actually, I will be all UNDER it!

Heg, Monig, Cheers, keep em coming.