Clive Palmer has detailed "jaw dropping" plans to spend up to $4 billion to create an international hotel, casino and tourism destination on the Sunshine Coast on a par with world-class facilities in Dubai.
Palmer recently puchased the iconic Hyatt Coolum Resort, which is the largest employer in the immediate region, removing the Hyatt from management and renaming the resort as the Palmer Coolum Resort. Many jobs have been lost in the short term as he strives to stem the massive losses apparently incurred durng the 20 year Hyatt reign
The billionaire met Sunshine Coast Council Mayor Mark Jamieson for almost three hours recently to reveal his plans which might include possible development of a chairlift or skylink to Mt Coolum.
Bill Schoch, general manager of the Palmer Coolum Resort, is reported as saying the "multifaceted" plans involve a $3 billion to $4 billion investment which would put the Sunshine Coast on the international map.
Mr Palmer apparently wants to make a major destination of world-class significance at Coolum similar to developments in Dubai and it will be on a massive scale but it will all be done with local sensitivity according to Mr Schoch.
Mr Schoch said it would be some months before the plans were made public because Mr Palmer wanted to ensure his plans were likely to be approved by various levels of government before he announced them.
Palmer is known as an eccentric, vis a vis his tourist project to develop a Titanic replica, but as a multi-billionaire he has very deep pockets and everything he talks about must be taken at face value.
Wednesday, July 18, 2012
Friday, June 29, 2012
New international terminal opens at Sunshine Coast Airport
Sunshine Coast Council Newsletter - 28TH June 2012
Sunshine Coast Airport has begun a new chapter with the opening of its international terminal yesterday, just in time to accept the first-ever international scheduled passenger flight touching down on Sunday 1 July, from New Zealand.
The new terminal opens the way to further develop relationships with world tourism and business markets, to attract new business to the region and to assist existing businesses to expand and to export.
Recently completed works have added an extra 500 square metres to the domestic and international terminals by using cleverly designed moveable walls. The walls separate the international/domestic areas while international flight numbers are limited initially, and can be switched from domestic to international use and vice versa quickly and efficiently.
Sunshine Coast Airport is one of the three principal drivers of the Coast’s economy, along with Maroochydore city centre and the Sunshine Coast University Hospital precinct.
The latter is a $2 billion dollar development, and the portents for the Sunshine Coast business property market, including Coolum property and real estate is significant.
Further details on these developments may be found at http://www.coolumproperty.com.au/
Thursday, June 21, 2012
Don`t spend a fortune updating a tired bathroom
*Add to the illusion of space with a frameless shower screen & mirror
*Paint over tired tiles
Prep with a de-glossing liquid, prime & finish with specialist products, or professionally finish with thermo-glazing surfacing.
*Swap dated tapware for gleaming chrome
*Tired bath?
Try re-enamelling - done in situ in a day & surfaces will gleam, or replace with a modern style free standing one
*Clean discoloured grout
Ceramic tiles don`t wear but grout does. Clean the grout & seal, or if flaking & cracked, have replaced.
* Update your showerhead
An overhead rain-style showerhead simulates a downpour and is a popular option.
*Install a new toilet - go wall-hung for the latest look or a classic back-to-wall-close coupled toilet.
*New look vanity - keep the carcase but opt for new doors and drawer fronts in 2 pac with new handles & a reconstituted stone top.
Tuesday, June 5, 2012
Auctions just not accepted in Qld
Interesting PRD Nationwide survey result recently published ties in with earlier surveys re the very limited acceptance in Qld. of listing without a price, whether that be POA or the auction process. In Qld, only 25% of sales are conducted via auction.(Sunday Mail survey September 2011 found in Newsroom on my website)
Current auctions in the Coolum area are returning very low & in some cases record low prices for those that do sell, perhaps illustrating that only the savvy bargain hunters attend and unsuspecting sellers come to believe prices on offer are the full extent of the wider market. Clearance rates, ie both before and at auction, for houses in the last 12 months Coolum area is 17.8%, for the Sunshine Coast 22.6% (as per domain.com.au advice)
My earlier blog explores this proposition of under-selling, which when coupled with a growing number of distressed sales, forces buyer expectations down and prices lower. Perhaps the most serious impact of this is that valuers, who are under enormous pressure from banks to get values right, are hitting low, taking the low end examples as indicative of a wider market value. These times call for the experienced real estate agent with strong marketing and negotiation skills to bring sense to the sale process and produce a win-win for buyers and sellers.
STOP PRESS - recent media articles available on my website at www.geoffgrover.com.au
"Recent home buyers to find equity magic has vanished" Domain 26th May - the recent history of high price housing growths leading to bumper rises in equity are over for at least 10 years as buyers purchasing in the last 4 or 5 years have found
"Properties with no asking price deter buyers" Real Estate Business May 2012 - properties marketed without a fixed price (read auctions) are negatively affecting the pool of buyers according to a poll by PRD Nationwide with responses mainly from Qld & NSW.
Renovation explosion
The trend to renovate has accelerated greatly in the last decade, the value now accounting for 40% of national residential investment.
Government taxes & costs of moving are forcing this trend by adding on 6% to the value of a property, whilst gov`t taxes & charges add on up to 40% to the cost of a new build.
Kitchens & bathrooms make the biggest impact on buyers.
The HIA found the average cost last year to renovate a kitchen was $20,000, a bathroom about $15,000.
Matusik`s rule of thumb to avoid over-capitalising is to cap spending at about 5% of the property`s value for kitchens, 2% for each bathroom, & 3% for landscaping.
If renovating primarily to sell,consider who is the most likely buyer
Knowing your target market will help to direct the renovation focus to areas that will appeal to potential buyers.
For instance, swimming pools have limited appeal to some because of the maintenance factor.
A property aimed at investors for rental return would benefit from bedrooms with their own bathrooms separated by a central living space. Spend only to ensure an achievable sale price comparable to your area.
Do your homework, call in your local real estate expert for advice.
Over-capitalising occurs when a property has been improved beyond its real estate value.
Michael Matusik, highly respected property analyst, advises that ideally the value of the dwelling should be between 1.5 & two times the value of the land on which it sits
Monday, June 4, 2012
Recent home buyers to find equity magic has vanished
THE sluggish housing market has sparked predictions that the latest generation of home owners will be unable to rely on their home as a key source of higher wealth, as many baby boomers did.
Instead, analysts say people who joined the housing market in the last few years are unlikely to experience the ''magic money machine'' effect of bumper rises in the equity in their homes.
In the late 1990s and early 2000s, house prices more than doubled, a trend that benefited even highly indebted owners. Rising equity - the proportion of the house's value belonging to the owner, rather than the bank - was credited with boosting consumer confidence and spending.
However, analysts say the trend is unlikely to return, with Sydney house prices down 2.6 per cent in the past year and the Organisation for Economic Co-operation and Development this week warning of further risks nationally. The head of research at RP Data, Tim Lawless, said home owners who bought in the last four years would find it much harder to build up equity. December figures from RP Data show 6.4 per cent of home owners had seen the value of their home fall to less than they paid for it. This proportion is likely to increase after recent price falls.
''Realistically, anybody looking to build up wealth and equity in their property needs to have a long-term view. They're not going to be accumulating equity in their property in the current conditions, or over the next couple of years, very quickly,'' Mr Lawless said.
A consultant, Martin North, said his surveys of consumers had found those who bought in the last four years - about a third of home owners - had received little or no capital growth.
''Property was a magic money machine for the last 20 years,'' Mr North said.
''You basically went on at the start with a high mortgage, paid it down, maybe traded up a couple of times, and you ended up with a very significant pool of equity.
''I don't think we're going to see that over the next five to 10 years … which means there is a generation now who won't get the sort of returns from their properties that they were expecting to get.''
Home owners aged between 25 and 34 have the highest proportion of debt to assets, at 63 per cent, statistics from the Reserve Bank show.
However, households are also paying down their mortgages at the fastest pace in years, and most borrowers are making more than the minimum monthly repayment.
This conservatism comes amid predictions house prices are likely to remain subdued. The OECD this week said the high dollar was ''generating substantial uncertainties that could weigh on employment, confidence and growth, with potential negative spillovers on house prices''.
Christopher Joye, an executive director of Yellow Brick Road Funds Management, predicted that over the next 10 years, house price growth would be about half what it had been in recent decades.
''For the last 20 years or so house prices grew by nearly 8 per cent a year, however over the last four years they've only grown by 2 per cent per annum,'' Mr Joye said.
''Over the next 10 years we only expect house prices to track household incomes and we project that disposable household income should grow by about 4 to 5 per cent per annum.''
The underselling syndrome
A tough market demands the need for an agent with superior marketing & negotiating skills to get the best price
Unfortunately, the quick route is often selected, agents simply taking to auction, attracting bargain hunters & low buy prices, not realistic market interest, or persuading sellers (often absentee landlords) to list at give-away prices that sell quickly.
Sales results are reflecting this—we are seeing record low prices due to these strategies & prices continue to be driven down.
I can quote numerous instances of sales that are destroying values. For instance, a villa in a quality & modern townhouse complex in Mt. Coolum recently sold for $340,000, the previous resale low was $365,000. I recently sold several for over $400,000.
In my frequent discussions with valuers, they are shaking their heads at the precedents these strategies are delivering & substantially impacting on bank lending behaviour.
Beware the underselling syndrome biggest & best & certain selling strategies are not necessarily the way to go—investigate all options.
The best option may not be a quick sale, but a sale at your best price – this is obtained by local area experts with extensive buyer reach & strong negotiating skills.
Recently I had 5 opens at Mt Coolum attracting a range of buyers & sold two properties on a win-win basis for both buyer & seller
The best option may not be a quick sale, but a sale at your best price – this is obtained by local area experts with extensive buyer reach & strong negotiating skills.
Recently I had 5 opens at Mt Coolum attracting a range of buyers & sold two properties on a win-win basis for both buyer & seller
Thursday, February 10, 2011
Flood impact on Sunshine Coast real estate
Prior to the floods, the overwhelming reports of analysts was for more of the same in 2011, a buyers market, plenty of stock for sale, no price growth, more a leakage downwards.
An ANZ report this month is the latest in a long line to confirm same (articles available via download from my website)
The coast was fortunate to escape the physical damage suffered elsewhere, the real damage being economic, such as devastating the Christmas tourist season.
Matusik is of the belief that ultimately we can look forward to some positive results with an economic boom for years to come, 2011 being a year of two halves.
He sees tourism bouncing right back, once mines are pumped dry we see a continuation of strong coal prices, moisture in the ground assists the next cycle of crops, and the infra-structure spending during the recovery creates strong stimulus.
The coast itself has solid infra-structure capital commitments in place, such as the $1.6b airport upgrade. The next 6 months will be tough, but economically will be much better as we head into spring.
ANZ Report
Home prices are expected to remain flat this year amid signs the slowdown in price gains could become entrenched, says the ANZ Bank.
It estimates house prices will plateau this year, as contending forces of rising interest rates and a strong demand for employees work themselves out in the market.
"Further price weakness is expected over 2011 as the prospect of additional rate rises weigh on both affordability and investor sentiment," said an ANZ senior real estate economist, Ange Montalti.
An ANZ report this month is the latest in a long line to confirm same (articles available via download from my website)
The coast was fortunate to escape the physical damage suffered elsewhere, the real damage being economic, such as devastating the Christmas tourist season.
Matusik is of the belief that ultimately we can look forward to some positive results with an economic boom for years to come, 2011 being a year of two halves.
He sees tourism bouncing right back, once mines are pumped dry we see a continuation of strong coal prices, moisture in the ground assists the next cycle of crops, and the infra-structure spending during the recovery creates strong stimulus.
The coast itself has solid infra-structure capital commitments in place, such as the $1.6b airport upgrade. The next 6 months will be tough, but economically will be much better as we head into spring.
ANZ Report
Home prices are expected to remain flat this year amid signs the slowdown in price gains could become entrenched, says the ANZ Bank.
It estimates house prices will plateau this year, as contending forces of rising interest rates and a strong demand for employees work themselves out in the market.
"Further price weakness is expected over 2011 as the prospect of additional rate rises weigh on both affordability and investor sentiment," said an ANZ senior real estate economist, Ange Montalti.
Thursday, October 14, 2010
How to trim the costs of your renovation
How to Trim the Cost of Your Renovation
– 27 Secrets for Keeping More Money in your
Pocket
Prepared by Hotspace Consultants, which is the brainchild of Jane Eyles‐Bennett - award winning interior designer, serial property investor and master renovator!
www.hotspaceconsultants.com
Renovating can be a fun, rewarding and exhilarating experience. And whether you’ve renovated your own property or properties in the past or just witnessed other people’s experiences,
you’ll know that there are plenty of things to learn and traps to avoid during
the process.
The one area where the majority of people trip up is with their budget.
This could be because they simply plan to do too much to their property and end up over-capitalising. Or because they spend too much money on getting what they
plan on doing, done. Or worse, a combination of both!
As a comprehensive 'to-do'-type checklist (including all the colours, fixtures, fittings and materials to use throughout every part of your renovation), freshlywritten specifically for your property, it’s a sure-fire way to only do to your property what is going to add value.
It’s also the smart way to make sure you only spend what you need to spend on your property - and avoid overcapitalising.
The 27 ‘secrets’ in this report give you some good ideas for reducing your renovation costs for the things you do decide to do to your property – so that you reduce the risk of over-capitalising
and increase your chances of making a profit!
AROUND THE HOUSE
Repair and Re-use
Re-use fixtures and fittings whenever possible. Particularly with low budget reno’s, re-using as much of the existing fixtures and fittings is essential. However, you’ll find this may sometimes be the case on more expensive properties too. Only change and update the ‘must do’ items (just make sure the new colours and finishes will tie in with whatever is remaining in the space). You may need to perform some repair work in order to reuse some fixtures and fittings – so work
out the cost to repair vs. the cost to replace before deciding.
Sell, sell, sell
Consider selling everything and anything you are removing from the property.
What you consider as junk might get you even a few dollars toward your renovation costs. Even if you sell the old oven for$50, the old laundry tub for $30, and the old light fittings for $60, there’s $140 to spend on paint or a plumbing job. Your trash is often someone else’s treasure – and it’ll save you on dumping costs too.
Relocate
There are a few things around a property that you can generally relocate to enhance your renovation. Plants are usually easy to relocate, as are pavers and curtains, light fittings and plenty of other things. You might relocate some of your existing fittings to less important or
prominent parts of the property and install new fittings into the immediately obvious areas (e.g. exterior, kitchen and lounge).
Do your own demolition
If you’re a little bit handy, then doing your own demolition is a great way to reduce costs. If you are retaining some of the surrounding elements, then be extra careful when pulling things apart. If you’re not careful, the extra costs to repair the damage caused when you hastily removed a bench-top or vanity or tiles – or whatever, could have better
been spent on someone else doing the work for you.
Remove your own rubbish
Removing your own rubbish and demolished materials from the property is a good way to save costs. It can be messy work, but can save you hundreds (maybe even thousands) of dollars. Tell your trades-people that you will remove all the rubbish yourself and for them to let you know in advance when it will need to be taken away. Sometimes a skip bin is much more practical, so weigh up your options first.
Get a ‘Scrapping Report’ to give your accountant before you start your renovation
In many cases, the fixtures and fittings inside an older property can still be written off prior to removal. This is called scrapping’ or ‘writing off’ and can amount to thousands of dollars in some cases. Although you do not directly save money (in fact you will have to pay a few hundred dollars for the report), you will gain the deductions at the end of the year when your tax return is completed.
Get a Depreciation Schedule once your renovation is completed
Once your renovation is completed, the new fixtures and fittings may then be depreciable. A qualified Quantity Surveyor will do this report for you to pass to your accountant, again for end of year tax deductions.
HOW TO BUY
Buy at auction
There are warehouses all over the place that sell all sorts of fixtures and fittings for bargain hunting renovators. Try auction houses for vanities, taps, baths, appliances and even kitchens. You’ll benefit from end of line items that retailers are trying to get rid of.
Buy in bulk
Some retailers will negotiate their price with you – particularly if you buy more than one or two items at the same time. Buy all your appliances, bathroom accessories, flooring, lighting etc. all at
once to increase your negotiating power. At the very least, try to negotiate free delivery.
Don’t buy retail
Go direct to the source for your best bargains. For example, kitchen retailers usually sub-contract the making of your kitchen to a cabinet-maker – and charge a hefty margin as a result. So buy directly from the manufacturer or at the very least, wholesaler to save truckloads of money. Hunt around for manufacturers and wholesalers selling direct to the public for things such as appliances, flooring, lighting, plants, landscaping supplies and anything else you need for
your renovation.
Set up trade accounts Many retailers will let you set up a trade account if you own a company and can provide them with the details. Discounts will vary depending on how much you buy and how well you can negotiate.
Buy on-line
Shopping on-line usually means you are buying wholesale because there is no showroom and associated costs for sales staff etc. This is in theory, however! Double check that you are getting a good deal and that delivery is included in your costs. You might do your research at local
retailers but then buy the products you select, from an on-line seller. Try:
WHAT TO BUY
Choose in-stock items
Suppliers are much more likely to ‘cut you a deal’ if the products you’re negotiating on are in stock.
Buy factory seconds
Plenty of retailers sell seconds all year round – not just at sale time. Sellers with large showrooms often have an area set aside for less-than-perfect stock ready to
be bought by bargain hunters. Don’t take their discount price at face value – even
though it is already discounted; try your luck on reducing it even more. You’re really doing them a favour by helping clear their floor for full priced stock!
Buy Asian imports
Years ago Asian imports were not the quality they are these days. You can buy an excellent range of well priced items and I particularly favour the cheaper imported products if I am selling a property immediately. Always buy good quality, but you can get away with slightly lower quality in many cases.
Replace like with like
When replacing some fixtures and fittings, it’s a good idea to keep their same size and/or location. For example; replacing light fittings in the same location will save you costs on repairing and painting the entire ceiling. Replacing cabinet handles with the same size as previously will ensure you use the same fixing holes again (and not left with gaps you need to fill). Keeping flooring the same thickness helps eliminate problems with the skirting boards in some cases. Think about what you are replacing and how its differences will affect the areas
surround it.
Replace with bigger and better
This is true ONLY in some circumstances. For example if you are replacing the bathroom vanity but not upgrading your floor or walls, then make sure the footprint of your new vanity is bigger
than the footprint of the old one. This will ensure that any floor and wall damage caused when the old vanity is removed is concealed by the new vanity.
Consider what damage is likely to be caused when removing any item that is going to be replaced and when possible, replace it with something bigger/taller/larger. Eg: a larger wall tile
area to cover damage caused when the old ones are removed, a larger toilet
footprint to cover the old footprint,
larger light fittings to cover fixing holes etc. Eliminating ‘making good’ (restoring damaged surfaces) is a great way to keep costs down.
MANAGING YOUR RENOVATION
Work out your budget BEFORE starting your renovation
So, 1) know your budget and then 2) work out what to do to your property with that amount of money. DO NOT do this the other way round. You must fit your renovation to your budget NOT fit your budget to your renovation. The latter will always lead to overcapitalising.
Know exactly what you’ll do and what it will cost
Knowing in advance exactly what you are going to do to your property is essential for sticking to your budget. You will already have worked out how much money you plan on spending, so now it’s time to work out what – exactly – you are going to do, and what it will cost. Get pricing from reliable and recommended trades-people on every aspect of your renovation before you start a thing. Try to get fixed pricing for everything (as opposed to un-capped hourly rates) and assemble all your supply/delivery/labour prices together on a spreadsheet.
Buy in advance
Give yourself plenty of time to hunt around for the best bargains. Buying in a rush often leads to spending too much. Put the time into researching exactly what you need (dimensions, colour, specifications required) and who will sell it to you for the best price.
DIY Finishing – painting, tiling, gardening etc
If you’re a little bit handy and you have the time, then doing your own ‘finishing’ can save you thousands. I’m not a huge fan of DIY simply because it tends to take so much longer than paying someone else to get it done for you (taking into account the holding/mortgage costs you’ll be
paying for the duration of your reno if you’re not living there). Use good tools and educate yourself on the best way to perform the job at hand. The internet is of course a great place to get help – try
www.eHow.com and type in the search function whatever it is you need to know.
Supply your labour to your tradespeople
Being the errand runner or ‘lackey’ to your trades-people will save costs on their running around for you. You will need to be available to do many sorts of things – sweeping floors, going down to the hardware store, stripping paint, cleaning glass, stripping wallpaper, sugar soaping walls etc. It’ll be physical work but will save you having to pay skilled trades-people to do unskilled work.
Supply products to trades-people and pay them labour only
This is a great idea if you have some experience. Buy the materials, fixtures,
fittings, products etc. for your renovation and deliver them to site for your tradespeople to install. Trades-people will usually add a margin on to any materials, fixtures and fittings they provide, so supplying your own can be an excellent way to trim costs. However, be wary that if there is any problem what-so-ever with what you are supplying to the tradesperson, then they will take no
responsibility for it. For example, this is particularly a problem with electrical
items where the fitting is installed by the electrician but doesn’t work. With a ‘labour only’ contract, you are paying the electrician to install your lights/switches/fans etc only. If there is a problem with the fittings then they will charge you extra to replace or repair them. So on the face of it, supplying your own materials is a good idea, but unless you are an experienced renovator, it can cause real problems. Be careful.
Hire or borrow tools if you choose to DIY
If you’re going to do all or some of the renovation yourself, then you’ll need some tools of the trade. Unless renovating is your business, then you’ll want to avoid spending money on tools as
much as possible. Borrow as much as you can, then hire the rest. Buy tools if you absolutely have to – but if you’re forced to buy the tool to carry out the job, then work out if you’re financially better to just pay a professional to do it for you.
Renovate the whole property all at once
Rather than spreading your renovation over a period of months and having one room completed at a time, it is a real cost saver to have it all done at once.
This of course is not practical if you or someone else lives in the house, but it is the best thing to do for a vacant property. Trades-people will charge more to keep returning, and fixtures and fittings will cost more if purchased individually (rather than in bulk), so get it all done in one go.
Manage your renovation well
When your renovation is under way, visit the site briefly and frequently (if you are not doing the work yourself) to resolve inevitable issues that will arise and risk your budget blowing out. Good
communication between yourself and your trades-people is essential. Make sure they know you are available any time to answer questions and discuss problems throughout the course of your project.
Keep track of variations
Problems and un-planned situations are always going to happen during a
renovation. Even the most experienced renovators can’t predict every problem that arises. The trick is to track and monitor your renovation spending on a daily basis. You will have your costings laid out on a spreadsheet – so as soon as you know about a change to the specification (and price), update your spreadsheet accordingly.
WHAT TO DO NEXT
Establish the potential re-value of your property after it has been renovated
Ascertain how much money you should spend on your renovation to get the best return & avoid over-capitalising
Discuss possible renovation changes that will most effectively magnify the value of your property
Clarify how a Renovation Action Plan will help you:
o Reach the upper limit of your property’s re-value potential
o Ensure your renovation costs stay on track & you don’t overspend
o Know exactly what changes to make to your property in the form of a to-do checklist –
including what areas to
renovate and what colours, products, fixtures and fittings to use throughout
o Transform your property into a valuable asset to re-value (and benefit from the increased
equity) or sell
Presented by Geoff Grover, The BUYER Reach agent, REMAX Property Associates
Coolum Beach, Sunshine Coast
– www.geoffgrover.com.au. – Mobile 0414 337 402 – geoffgrover@remax.com.au
Geoff recommends Jane Eyles‐Bennett of Hotspace Consultants for a professional
Renovation Action Plan
www.hotspaceconsultants.com - info@hotspaceconsultants.com
– 27 Secrets for Keeping More Money in your
Prepared by Hotspace Consultants, which is the brainchild of Jane Eyles‐Bennett - award winning interior designer, serial property investor and master renovator!
www.hotspaceconsultants.com
Renovating can be a fun, rewarding and exhilarating experience. And whether you’ve renovated your own property or properties in the past or just witnessed other people’s experiences,
you’ll know that there are plenty of things to learn and traps to avoid during
the process.
The one area where the majority of people trip up is with their budget.
This could be because they simply plan to do too much to their property and end up over-capitalising. Or because they spend too much money on getting what they
plan on doing, done. Or worse, a combination of both!
As a comprehensive 'to-do'-type checklist (including all the colours, fixtures, fittings and materials to use throughout every part of your renovation), freshlywritten specifically for your property, it’s a sure-fire way to only do to your property what is going to add value.
It’s also the smart way to make sure you only spend what you need to spend on your property - and avoid overcapitalising.
The 27 ‘secrets’ in this report give you some good ideas for reducing your renovation costs for the things you do decide to do to your property – so that you reduce the risk of over-capitalising
and increase your chances of making a profit!
AROUND THE HOUSE
Repair and Re-use
Re-use fixtures and fittings whenever possible. Particularly with low budget reno’s, re-using as much of the existing fixtures and fittings is essential. However, you’ll find this may sometimes be the case on more expensive properties too. Only change and update the ‘must do’ items (just make sure the new colours and finishes will tie in with whatever is remaining in the space). You may need to perform some repair work in order to reuse some fixtures and fittings – so work
out the cost to repair vs. the cost to replace before deciding.
Sell, sell, sell
Consider selling everything and anything you are removing from the property.
What you consider as junk might get you even a few dollars toward your renovation costs. Even if you sell the old oven for$50, the old laundry tub for $30, and the old light fittings for $60, there’s $140 to spend on paint or a plumbing job. Your trash is often someone else’s treasure – and it’ll save you on dumping costs too.
Relocate
There are a few things around a property that you can generally relocate to enhance your renovation. Plants are usually easy to relocate, as are pavers and curtains, light fittings and plenty of other things. You might relocate some of your existing fittings to less important or
prominent parts of the property and install new fittings into the immediately obvious areas (e.g. exterior, kitchen and lounge).
Do your own demolition
If you’re a little bit handy, then doing your own demolition is a great way to reduce costs. If you are retaining some of the surrounding elements, then be extra careful when pulling things apart. If you’re not careful, the extra costs to repair the damage caused when you hastily removed a bench-top or vanity or tiles – or whatever, could have better
been spent on someone else doing the work for you.
Remove your own rubbish
Removing your own rubbish and demolished materials from the property is a good way to save costs. It can be messy work, but can save you hundreds (maybe even thousands) of dollars. Tell your trades-people that you will remove all the rubbish yourself and for them to let you know in advance when it will need to be taken away. Sometimes a skip bin is much more practical, so weigh up your options first.
Get a ‘Scrapping Report’ to give your accountant before you start your renovation
In many cases, the fixtures and fittings inside an older property can still be written off prior to removal. This is called scrapping’ or ‘writing off’ and can amount to thousands of dollars in some cases. Although you do not directly save money (in fact you will have to pay a few hundred dollars for the report), you will gain the deductions at the end of the year when your tax return is completed.
Get a Depreciation Schedule once your renovation is completed
Once your renovation is completed, the new fixtures and fittings may then be depreciable. A qualified Quantity Surveyor will do this report for you to pass to your accountant, again for end of year tax deductions.
HOW TO BUY
Buy at auction
There are warehouses all over the place that sell all sorts of fixtures and fittings for bargain hunting renovators. Try auction houses for vanities, taps, baths, appliances and even kitchens. You’ll benefit from end of line items that retailers are trying to get rid of.
Buy in bulk
Some retailers will negotiate their price with you – particularly if you buy more than one or two items at the same time. Buy all your appliances, bathroom accessories, flooring, lighting etc. all at
once to increase your negotiating power. At the very least, try to negotiate free delivery.
Don’t buy retail
Go direct to the source for your best bargains. For example, kitchen retailers usually sub-contract the making of your kitchen to a cabinet-maker – and charge a hefty margin as a result. So buy directly from the manufacturer or at the very least, wholesaler to save truckloads of money. Hunt around for manufacturers and wholesalers selling direct to the public for things such as appliances, flooring, lighting, plants, landscaping supplies and anything else you need for
your renovation.
Set up trade accounts Many retailers will let you set up a trade account if you own a company and can provide them with the details. Discounts will vary depending on how much you buy and how well you can negotiate.
Buy on-line
Shopping on-line usually means you are buying wholesale because there is no showroom and associated costs for sales staff etc. This is in theory, however! Double check that you are getting a good deal and that delivery is included in your costs. You might do your research at local
retailers but then buy the products you select, from an on-line seller. Try:
WHAT TO BUY
Choose in-stock items
Suppliers are much more likely to ‘cut you a deal’ if the products you’re negotiating on are in stock.
Buy factory seconds
Plenty of retailers sell seconds all year round – not just at sale time. Sellers with large showrooms often have an area set aside for less-than-perfect stock ready to
be bought by bargain hunters. Don’t take their discount price at face value – even
though it is already discounted; try your luck on reducing it even more. You’re really doing them a favour by helping clear their floor for full priced stock!
Buy Asian imports
Years ago Asian imports were not the quality they are these days. You can buy an excellent range of well priced items and I particularly favour the cheaper imported products if I am selling a property immediately. Always buy good quality, but you can get away with slightly lower quality in many cases.
Replace like with like
When replacing some fixtures and fittings, it’s a good idea to keep their same size and/or location. For example; replacing light fittings in the same location will save you costs on repairing and painting the entire ceiling. Replacing cabinet handles with the same size as previously will ensure you use the same fixing holes again (and not left with gaps you need to fill). Keeping flooring the same thickness helps eliminate problems with the skirting boards in some cases. Think about what you are replacing and how its differences will affect the areas
surround it.
Replace with bigger and better
This is true ONLY in some circumstances. For example if you are replacing the bathroom vanity but not upgrading your floor or walls, then make sure the footprint of your new vanity is bigger
than the footprint of the old one. This will ensure that any floor and wall damage caused when the old vanity is removed is concealed by the new vanity.
Consider what damage is likely to be caused when removing any item that is going to be replaced and when possible, replace it with something bigger/taller/larger. Eg: a larger wall tile
area to cover damage caused when the old ones are removed, a larger toilet
footprint to cover the old footprint,
larger light fittings to cover fixing holes etc. Eliminating ‘making good’ (restoring damaged surfaces) is a great way to keep costs down.
MANAGING YOUR RENOVATION
Work out your budget BEFORE starting your renovation
So, 1) know your budget and then 2) work out what to do to your property with that amount of money. DO NOT do this the other way round. You must fit your renovation to your budget NOT fit your budget to your renovation. The latter will always lead to overcapitalising.
Know exactly what you’ll do and what it will cost
Knowing in advance exactly what you are going to do to your property is essential for sticking to your budget. You will already have worked out how much money you plan on spending, so now it’s time to work out what – exactly – you are going to do, and what it will cost. Get pricing from reliable and recommended trades-people on every aspect of your renovation before you start a thing. Try to get fixed pricing for everything (as opposed to un-capped hourly rates) and assemble all your supply/delivery/labour prices together on a spreadsheet.
Buy in advance
Give yourself plenty of time to hunt around for the best bargains. Buying in a rush often leads to spending too much. Put the time into researching exactly what you need (dimensions, colour, specifications required) and who will sell it to you for the best price.
DIY Finishing – painting, tiling, gardening etc
If you’re a little bit handy and you have the time, then doing your own ‘finishing’ can save you thousands. I’m not a huge fan of DIY simply because it tends to take so much longer than paying someone else to get it done for you (taking into account the holding/mortgage costs you’ll be
paying for the duration of your reno if you’re not living there). Use good tools and educate yourself on the best way to perform the job at hand. The internet is of course a great place to get help – try
www.eHow.com and type in the search function whatever it is you need to know.
Supply your labour to your tradespeople
Being the errand runner or ‘lackey’ to your trades-people will save costs on their running around for you. You will need to be available to do many sorts of things – sweeping floors, going down to the hardware store, stripping paint, cleaning glass, stripping wallpaper, sugar soaping walls etc. It’ll be physical work but will save you having to pay skilled trades-people to do unskilled work.
Supply products to trades-people and pay them labour only
This is a great idea if you have some experience. Buy the materials, fixtures,
fittings, products etc. for your renovation and deliver them to site for your tradespeople to install. Trades-people will usually add a margin on to any materials, fixtures and fittings they provide, so supplying your own can be an excellent way to trim costs. However, be wary that if there is any problem what-so-ever with what you are supplying to the tradesperson, then they will take no
responsibility for it. For example, this is particularly a problem with electrical
items where the fitting is installed by the electrician but doesn’t work. With a ‘labour only’ contract, you are paying the electrician to install your lights/switches/fans etc only. If there is a problem with the fittings then they will charge you extra to replace or repair them. So on the face of it, supplying your own materials is a good idea, but unless you are an experienced renovator, it can cause real problems. Be careful.
Hire or borrow tools if you choose to DIY
If you’re going to do all or some of the renovation yourself, then you’ll need some tools of the trade. Unless renovating is your business, then you’ll want to avoid spending money on tools as
much as possible. Borrow as much as you can, then hire the rest. Buy tools if you absolutely have to – but if you’re forced to buy the tool to carry out the job, then work out if you’re financially better to just pay a professional to do it for you.
Renovate the whole property all at once
Rather than spreading your renovation over a period of months and having one room completed at a time, it is a real cost saver to have it all done at once.
This of course is not practical if you or someone else lives in the house, but it is the best thing to do for a vacant property. Trades-people will charge more to keep returning, and fixtures and fittings will cost more if purchased individually (rather than in bulk), so get it all done in one go.
Manage your renovation well
When your renovation is under way, visit the site briefly and frequently (if you are not doing the work yourself) to resolve inevitable issues that will arise and risk your budget blowing out. Good
communication between yourself and your trades-people is essential. Make sure they know you are available any time to answer questions and discuss problems throughout the course of your project.
Keep track of variations
Problems and un-planned situations are always going to happen during a
renovation. Even the most experienced renovators can’t predict every problem that arises. The trick is to track and monitor your renovation spending on a daily basis. You will have your costings laid out on a spreadsheet – so as soon as you know about a change to the specification (and price), update your spreadsheet accordingly.
WHAT TO DO NEXT
Establish the potential re-value of your property after it has been renovated
Ascertain how much money you should spend on your renovation to get the best return & avoid over-capitalising
Discuss possible renovation changes that will most effectively magnify the value of your property
Clarify how a Renovation Action Plan will help you:
o Reach the upper limit of your property’s re-value potential
o Ensure your renovation costs stay on track & you don’t overspend
o Know exactly what changes to make to your property in the form of a to-do checklist –
including what areas to
renovate and what colours, products, fixtures and fittings to use throughout
o Transform your property into a valuable asset to re-value (and benefit from the increased
equity) or sell
Presented by Geoff Grover, The BUYER Reach agent, REMAX Property Associates
Coolum Beach, Sunshine Coast
– www.geoffgrover.com.au. – Mobile 0414 337 402 – geoffgrover@remax.com.au
Geoff recommends Jane Eyles‐Bennett of Hotspace Consultants for a professional
Renovation Action Plan
www.hotspaceconsultants.com - info@hotspaceconsultants.com
Saturday, September 11, 2010
Tuesday, August 17, 2010
Home loans fall to nine year lows
The LCTeam reports on 9 August that home loan commitments fell to nine year lows in June as investor demand weakened and housing momentum slowed, posing monetary policy concerns for the central bank, economists say.
The housing recovery was now at an end as higher interest rates continued to bite, they said.
Australian housing finance commitments for owner-occupied housing fell 3.9 per cent in June, almost twice the market forecast of 2.0 per cent, the Australian Bureau of Statistics (ABS) said on Monday.
Total housing finance by value fell by 1.9 per cent in June, seasonally adjusted, to $20.710 billion. CommSec economist Craig James said the figures showed “continued weakness” in the housing market.
“In the last couple of months, investors had served to prop up the overall market, but that wasn’t the case this time around,” Mr James said. “It must be starting to come as a concern for the authorities.”
He said Australia was now seeing the “loss of momentum” in the housing market, with housing finance commitments at nine year lows.“Certainly, the rate hikes that have been applied late last year and early last year are continuing to bite.”
He said weakness in retail spending, the housing market and manufacturing services and construction now revealed an economy that had “lost its way to some extent,” he said.
Mr James said the poor construction finance figures would signal concerns about a lack of demand for projects in the second half of the year.
The ABS said finance for construction projects fell by five per cent in June.
AMP Capital Investors chief economist Shane Oliver said the falls pointed to an ongoing deterioration of the housing sector.“It’s basically telling us the housing recovery that we’ve seen over the last 18 months has come to an end,” Dr Oliver said.“We can’t rely on housing construction to continue pushing the economy ahead. We’re going to be more reliant on the consumer and particularly business investment.”
Weakness in housing finance would also flow through to weakness in house prices, which was becoming evident towards the end of June, Dr Oliver said.“It’s another reason for the Reserve Bank to leave rates on hold.”
Westpac economists said the figures “surprised on the low side” as the investor upswing “took a breather”. A decline in housing finance in June was expected, but not one of that magnitude, they said. “We would interpret this as the tail end of weakness in response to the RBA’s rapid fire normalisation of rates,” the economists said in a statement.
The Reserve Bank of Australia (RBA) may well leave rates unchanged for the rest of this year.“ This points to finance demand stabilising and most likely moving higher during the second half of 2010.”
The housing recovery was now at an end as higher interest rates continued to bite, they said.
Australian housing finance commitments for owner-occupied housing fell 3.9 per cent in June, almost twice the market forecast of 2.0 per cent, the Australian Bureau of Statistics (ABS) said on Monday.
Total housing finance by value fell by 1.9 per cent in June, seasonally adjusted, to $20.710 billion. CommSec economist Craig James said the figures showed “continued weakness” in the housing market.
“In the last couple of months, investors had served to prop up the overall market, but that wasn’t the case this time around,” Mr James said. “It must be starting to come as a concern for the authorities.”
He said Australia was now seeing the “loss of momentum” in the housing market, with housing finance commitments at nine year lows.“Certainly, the rate hikes that have been applied late last year and early last year are continuing to bite.”
He said weakness in retail spending, the housing market and manufacturing services and construction now revealed an economy that had “lost its way to some extent,” he said.
Mr James said the poor construction finance figures would signal concerns about a lack of demand for projects in the second half of the year.
The ABS said finance for construction projects fell by five per cent in June.
AMP Capital Investors chief economist Shane Oliver said the falls pointed to an ongoing deterioration of the housing sector.“It’s basically telling us the housing recovery that we’ve seen over the last 18 months has come to an end,” Dr Oliver said.“We can’t rely on housing construction to continue pushing the economy ahead. We’re going to be more reliant on the consumer and particularly business investment.”
Weakness in housing finance would also flow through to weakness in house prices, which was becoming evident towards the end of June, Dr Oliver said.“It’s another reason for the Reserve Bank to leave rates on hold.”
Westpac economists said the figures “surprised on the low side” as the investor upswing “took a breather”. A decline in housing finance in June was expected, but not one of that magnitude, they said. “We would interpret this as the tail end of weakness in response to the RBA’s rapid fire normalisation of rates,” the economists said in a statement.
The Reserve Bank of Australia (RBA) may well leave rates unchanged for the rest of this year.“ This points to finance demand stabilising and most likely moving higher during the second half of 2010.”
Sunday, August 1, 2010
Time on the market & pricing
Everybody says you can only go down in price when listing, you can`t go up, hence the basic incorrect premise when starting off selling is set in stone. Combined with the inexperienced real estate agent providing a "big" start price so they don`t lose the listing, the downward spiral starts.
Michael Matusik, probably the most respected Queensland property analyst in the business, put it in very sharp perspective in his latest article in the Courier Mail 31 July 2010.(full article available by download from my website at www.geoffgrover.com.au) He says that his research shows that the first offer can often be the best offer, the next one 5% below and the third offer often not eventuating.
The question is asked as to why buyers and sellers pontificate over small sums relative to the total offered price and try to hold their positions? Over time, these sums become regarded as trifling, and almost a laughing matter in retrospect of a few years duration.
Is it a macho thing where one can`t seem to be giving in? It all puts in clear perspective the skills of an experienced real estate agent in enabling relativiites to be examined rather than claiming moral ground and a perhaps phyrric victory! It is, after all, a win-win scenario we are all seeking.
Residential properties are in essence a place to enjoy living in and to hold relative value, not a speculative investment to make money at the expense of fellow man (and woman), and those that seek that journey are destined to be very lonely people indeed and to stuff up their sale process to their extreme detriment in the meantime - my advice if you are this way structured, please don`t give me a call to sell your property, even though my record shows I perform at a level way, way above the industry average - check out my report card at www.geoffgrover.com.au.
Michael Matusik, probably the most respected Queensland property analyst in the business, put it in very sharp perspective in his latest article in the Courier Mail 31 July 2010.(full article available by download from my website at www.geoffgrover.com.au) He says that his research shows that the first offer can often be the best offer, the next one 5% below and the third offer often not eventuating.
The question is asked as to why buyers and sellers pontificate over small sums relative to the total offered price and try to hold their positions? Over time, these sums become regarded as trifling, and almost a laughing matter in retrospect of a few years duration.
Is it a macho thing where one can`t seem to be giving in? It all puts in clear perspective the skills of an experienced real estate agent in enabling relativiites to be examined rather than claiming moral ground and a perhaps phyrric victory! It is, after all, a win-win scenario we are all seeking.
Residential properties are in essence a place to enjoy living in and to hold relative value, not a speculative investment to make money at the expense of fellow man (and woman), and those that seek that journey are destined to be very lonely people indeed and to stuff up their sale process to their extreme detriment in the meantime - my advice if you are this way structured, please don`t give me a call to sell your property, even though my record shows I perform at a level way, way above the industry average - check out my report card at www.geoffgrover.com.au.
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