Cherie’s South Windsor Renovation
THE STORY:
Cherie Barber takes on a mammoth project and converts a low earning single dwelling into a double dipping, high yield earning property for owners Selene & Wayne. When Cherie first assessed the property, she quickly determined that the main property was in dire need of a makeover, however this alone would not general any profit or enough increase in the rental yield to make the project viable. The owners had been toying with the idea of adding a granny flat to the rear backyard, and Cherie agreed this would be the best strategy to increase the overall rental income per square metre. With all hands on deck, Cherie and the owners managed to completely transform the front property and add a whole 2nd residence in just 18 days!
RENOVATION STRATEGY:
The overall strategy was to completely renovate the old 1960’s fibro house to the front of the block to increase rental income, above the current return of $360 per week. In addition to this, subdividing the large backyard into separate dwellings and erecting a 2 bedroom granny flat to create a secondary revenue stream. The combined property strategy was to:
- Maximise rental yield to make the property cash flow “positive”;
- Manufacture instant equity in a short period of time;
- To make the existing house appealing to tenants, post renovation;
- To attract a better quality tenant at a rental premium;
- To create a new rental revenue stream through the addition of a granny flat to the rear of the yard, capitalising on dead space.
- To create cash flow so the owners can go out and do it all again, immediately on completion of the renovation.
Property Value Before Renovation: $385,000
Renovation Spend – House: $38,551.37
Renovation Spend – Granny Flat: $72,346.24
Renovation Spend Total: $110,897.61
Renovation Timeframe: 18 Days
Property Breakeven Point: $495,897.61
Property Value – Post Renovation: $510,000.00
Profit Margin (After Reno Costs): $14,102.39
Rent Before Renovation: $360.00 per week
Rental Yield After Renovation: $700.00 per week
Hi Cherie, looks like a great reno on a tight budget! Was there any asbestos in the bathroom or walls that you had to remove – what was the cost to do this?
Hi Sian, this project was done over 10 years ago so we can’t recall if asbestos was in the bathroom or not. If it was, the cost to remove would be completely different now anyway. If you have a bathroom that has asbestos in it, best thing to do is phone a company like Jim’s Asbestos Removals and they can give you a quote, specific to your home. Sorry we aren’t more helpful in answering the first part of your question but hope that the recommendation to Jim’s helps steer you in the right direction. Cherie Crew x