Not Happy with My House - Opinions Required

Empharand on 09/10/2019 - 15:07
Last edited 09/10/2019 - 16:31

Hey guys,

Could I please have your opinion on this.

Long story short, I purchased a property in January 2017. 5 bedroom, 2 bathroom double story house on a 652m2 block of land, the house itself is located in South-East Melbourne close to schools, main road etc. The house itself was originally built in 1986 as a single story and was extended to a double story somewhere early 2000.

I'm starting to feel that the property is going to kill me financially with the work required and may not turnover a profit if I go to sell say 2-3 years down the track.

I have spent approx 5k in getting the odd thing fixed, however I still have a list of things that need to be done, which are as follows

  • New kitchen (current one is outdated, the gas oven is as old as the house)
  • Roof restoration
  • New back veranda (The current one is a little worse for wear and cannot be restored)
  • New front veranda (The current one is fine but the design is horrible, it really does negatively impact the street appeal)
  • Reno the upstairs bathroom (It's not old but the previous owners installed some stupid spa / shower setup which looks stupid)

Unfortunately I bought the house while the house prices were at an all time high (I'm not going into specifics of price) and with the above items I'm starting to think that I may have bought an investment requiring more work then what it will be worth. My plans with the house is to either sell it or lease it out in about 2 years time, the reason behind this is that I'm not happy with the house and the area; the area itself is fine (It's not in a crime ridden area or anything) however where I'm situated is extremely close to a school which does pose a problem with school traffic.

The investment potential is definitely there, it's close to pretty much anything a family would require. It's 800m away from a shopping centre, very close to a primary school and high school (both of which are decent public schools) and close to main roads and highways (All within 5km's) so my aim at this point is to fix as much as I can and lease it out until the equity rises and then sell it.

Am I over thinking this?
What do you think I should do?

Thank you.

Edit: Just fyi, I don't appreciate the comments regarding my choice in buying a house requiring work. Yes, I feel I made a bad investment, I lose sleep over it, however my request here is for opinions on how I can fix my situation, commenting on my choices isn't appreciated and isn't helpful.

Home & Garden

Comments

  • dasher86 on 09/10/2019 - 15:16
    +8

    Either it's a home and you're willing to spend for your enjoymentr and benefit and not worry about capital outlay, and enjoy for many more years.

    Or it's an investment and proceed with all projects with a view to get a return. If it looks stupid but won't get you a increased return for doing it, don't do it.
    Will renoing the bath get me more rent? Probably not.

    • HardlyCharly on 10/10/2019 - 03:04
      -1

      You have a point there, what may look stupid to the OP clearly didn't to the previous owners and won't to many potential renters/buyers in the future. In over a year of looking at houses I don't think I've seen a single one which didn't look ugly or disgustingly bland how it was, clearly the vast majority don't care. When I eventually buy I know I have to factor in renovations from the start no matter how good the condition of the house technically is, because I actually have taste.

  • [Deactivated] on 09/10/2019 - 15:16
    +1

    You're not happy with the location.

    You're okay with the house.

    You should find a new place to live as no amount of reno actually moves the house.

    You certainly do not view it as a home.

  • itsmattaitken on 09/10/2019 - 15:19

    Speak with some local agents and get a valuation done. As people have mentioned above, decide if you want to live in it or sell it. Houses are money pits regardless of where/what it is.

  • ihbh on 09/10/2019 - 15:22

    My recommendation is to try to do some cost benefit analysis and crystal ball gazing (talk to as many agents in your area as possible for guidance and opinion):

    1. Whatever you do you will lose money because you bought at the peak and prices have fallen. You need to accept this.

    2. You should try to minimise your loss/opportunity cost. (E.g you won't lose money if you sell it in 50 years time, but that doesn't take into account your opportunity cost.)

    => 2. What do you expect to get more from if you sell after the reno (assuming only take a few months at most):

    a. Selling price - purchase price - reno costs (with reno)

    b. Selling price - purchase price (as is)

    A bit more complicated is option c. for a. and b. where you defer the sale for X few years, but need to take into account rental income and holding costs (interest, operating costs, opportunity cost of your equity).

    Choose the option with the highest proceeds/lowest loss.

  • EightImmortals on 09/10/2019 - 15:43
    +6 
    New kitchen (current one is outdated, the gas oven is as old as the house)
Roof restoration
New back veranda (The current one is a little worse for wear and cannot be restored)
New front veranda (The current one is fine but the design is horrible, it really does negatively impact the street appeal)
Reno the upstairs bathroom (It's not old but the previous owners installed some stupid spa / shower setup which looks stupid)

    And you didn't notice these things BEFORE you singed the contract or negotiated a better price so you could afford to fix them up?

    • Empharand on 09/10/2019 - 16:18

      These things are purely cosmetic, and I was happy with the house at the time. I didn't anticipate that those items would have a considerable impact on my financials.

      • 87percent on 09/10/2019 - 17:54
        +10

        Lol.. sorry but you didn’t think BUYING A HOUSE would impact your financials?!?

  • Skramit on 09/10/2019 - 15:47
    +10

    Property investment is a long term game. 2017 to now…. you're freaking out a bit early IMO.

  • chumlee on 09/10/2019 - 16:05
    +3

    In my opinion the first thing you should do is get your vision tested so you don't make anymore mistakes after you have looked at something

    • Empharand on 09/10/2019 - 16:15
      +1

      Yeah noted thanks.

  • [Deactivated] on 09/10/2019 - 16:50
    +4

    Speak to a couple of REAs in your area. Decide if you want to sell or rent.Do that, then move somewhere you like better.

    Next time, I would recommend factoring the reno costs when making an offer.

    Edit: went through your previous posts and it appears that you're sharing your 5-bedroom house with 4 mates. How are you not making a profit on this 'investment'?

    • 87percent on 09/10/2019 - 18:02

      Looking at his post history, op sure does have a lot of problems with others. Overhanging tree, electricity company, AFP, Vivid Wireless

  • mini2 on 09/10/2019 - 16:55

    You don't need a new kitchen if it's still functional, you might need something to spruce it up a bit.

    Same probably applies to the verandah and upstairs bathroom. Like Jar Jar Bink said, go talk to a REA. Not necessarily wanting to sell it but steal some ideas/tradie contacts (if you don't have them) from them. Except they'll be annoying you for the next 6 months after the initial chat.

  • tsunamisurfer on 09/10/2019 - 17:39

    OP…It is less likely that you will be able to claw back the expenses of doing your list of things when you sell unless you do a lot of it yourself and source material yourself.

    If you do want to sell in future, try to spend the optimum amount that has the most value.

    Eg if the kitchen looks like crap…spruce it up with new cabinetry, maybe a cheap IKEA kit.

    If you are looking to rent out please be aware of what it means if your property is currently your PPOR as there are Capital Gains ramifications.

  • Meho2026 on 09/10/2019 - 17:58

    If you dont know for sure at this stage if you are going to rent it out or sell it then just fix the roof, forget the rest unless the back veranda is unsafe.

    If the kitchen and stove function leave them, put a new kitchen later if you decide to sell.

    If you rent it out and the property appeal to tenants is the location they will overlook a daggy kitchen as long as its fully functioning, same goes for the bathroom.

    If you replace both of them now and end up renting it out the tenants will trash them anyway.

    Leave the front veranda alone until its time to sell.

    For renting, if it aint broken dont touch it. For selling fix everything up right before you sell.

    You can easily live with the things you dont like for another couple of years to achieve your long term goals.

  • profar on 09/10/2019 - 18:00
    -5

    Your lucky OP Liberals won the election if they didn't I guarantee you be in a much bigger most likely 6 figure hole !

    Just saying things could have been a lot different with your financial happiness !

  • spackbace on 09/10/2019 - 18:18
    +1

    Don't fix shit, and live in it for 10yrs. So what if the spa/shower combo doesn't look great? If you can't afford to fix it then don't!

  • Mechz on 09/10/2019 - 20:59

    Can you subdivide? You can get approval for a build and split the block then sell the approved site for a reasonable amount. Unfortunately for you the market is only going to soften over the next few years but since you say it's only cosmetic issues just suck it up and you'll come out on top.

    Side note, just buy a cheap oven and put it in to get you by.

  • jm48 on 09/10/2019 - 22:15
    +1

    5 bedroom
    I'm situated is extremely close to a school

    Get married, have lots of kids and congratulate yourself on your good planning :)

  • ShannonN on 10/10/2019 - 00:59

    You've said most reno things are cosmetic But I see roof restoration on the list. That sounds like the only thing I'd spend money on just to be sure no leaks etc that can cause damage to the house. The rest you can live with.

    Like others have said, if you want to live there long term spend money to update all that needs updating, then you can call it a home.
    If selling or renting out spend only whats needed to pass a inspection, move on to a newer more what you want home

  • brad1-8tsi on 10/10/2019 - 08:40

    My rule of thumb (right or wrong) is:

    Don't treat the family home as an investment. Any capital gain beyond inflation is a bonus.

    Do renovations that will improve your lifestyle and enjoyment of your family home.
    These might give some capital gain. The main aim is not to do anything that will make selling harder.

    If you bought the family home as an investment you have to treat it with the same cold, logical eye as an investment.

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