News

Renovation riches – Russel and Heather Berndt

Renovation riches – Russel and Heather Berndt

Russell and Heather Berndt
Project: West Preston, Vic
Purchase price: $640,000
Renovation cost: $8300
End valuation: $710,000
Change in value: $61,700
Renovation time: 16 days

BY KIERAN CLAIR

“It was terrible. It was absolutely horrible and I thought, ‘Why did you bring me to this house’?”

This was Russell Berndt’s first thought when he pulled up in front of the property his wife, Heather, had picked for their very first renovation project, which was a venture that would result in almost $62,000 in value gain from 16 days’ work.

For 49-year-old Russell and 51-year-old Heather, the jump into becoming renovation moguls took some time. Russell says he’d been procrastinating for years, so to kick-start the enthusiasm, he decided to sign up for an education.

“I even procrastinated about doing the course!” Russell laughs.

“Jane (Slack-Smith) went through how you talk to agents and how to locate the properties. What areas to locate it in. Prior to that, I thought, ‘Oh you buy a house and that’s it…’ Education is worth many thousands of dollars, I think.”

Russell’s work as a maintenance manager at a theme park brought both strengths and limitations to the project. He’s a jack-of-all-trades who won’t shy away from getting his hands dirty, but his work schedule meant limited time to complete a reno.

“At the park, we close down for winter and reopen in summer. I can’t take holidays over the summer period and we do a lot of maintenance work, like a lot of rebuilding and what have you, in the winter period.”

This means once they found their deal, it was a rush to get things done. Armed with a bit more knowledge, the pair went hunting for their starter project looking in locations that offered both great capital growth and rental potential. The gentrifying suburb of West Preston was firmly on the radar. They found their ‘renovator’s delight’ after missing out on another property at auction.

A chat with the selling agent after the event resulted in a hot tip that became their first venture.

“It was an ugly, brown brick clad home with half a front fence. Unpainted. It looked horrible. The roof was rusted, the paint was peeling… so it was half galvanised and half paint. It looked horrible and I thought, ‘Surely this is not our strategy?’

“When I went inside, it had lath and plaster with large cracks in it. There were a couple of stumps that were quite poor. The floor was a little bit unlevelled. The carpet was quite dirty and it was many years without maintenance by the looks of it.”

A nice, functional kitchen

A nice, functional kitchen

Then came the first lesson in making money from projects – buy well. The condition of the home was putting off competing buyers, but for those who can look past the horror show and see the good bones, profit waits. The Berndts found themselves in a reasonably strong position and ended up acquiring the home for $40,000 less than the asking price.

Russell says they decided to keep the work basic, clean and broadly appealing. He says they budgeted a cost of $20,000, but came in well under.

“We spent $8300 in total, which consisted of a new north-facing corrugated iron roof, front picket fence, new carpet, a lot of plaster work, paint everywhere, glass replacement and 15 years’ worth of maintenance – it felt like it anyway.”

They also tackled a couple of troublesome stumps.

Having a small window of opportunity to take time away from his theme park work was a very big carrot for Russell to get the job done quickly.

“I ended up having three weeks off and some of that was waiting for the settlement to take place and collecting the keys. Then the next 16 days, we worked flat chat!”

It paid off when an assessment on completion revealed some very good news.

“It was re-valued just after (the renovation) at $710,000. It worked out to be for every dollar we spent, we gained $8 in equity.”

Russell has some advice for anyone looking to tackle his or her own deal.

“My biggest tip is knowledge. Knowledge is power – get educated.

“The second tip is do as much (work) as you can. A tradesman is $50 per hour to $80 per hour so the more you do, the better it is.”

Notice any cracks?

Notice any cracks?

But Russell says that if your time is limited, don’t be afraid to ask for a little assistance too.

“Because I only had 16 days and there was a fair bit of work to do, it nearly got overwhelming, but my son ended up helping us and a friend took some time off as well. Heather and a friend were able to come on the weekends and help too.”

Russell and Heather decided they wanted to get tenants in as soon as they could and allowed their property manager to bring prospects through while the home was still under repair. Russell thought tenants would be deterred, but it proved to be a canny move.

“We finished (renovating) on a Thursday night and the new tenants came in on the Friday morning. They wanted to get us out just for them to move in. We ended up getting $450 a week and signed a two-year lease.”

Russell believes there’s still a little more equity to be made from upgrading the home. By pulling off the external brick cladding and painting the weatherboards, he estimates the valuation could well go up another $50,000.

It should come as no surprise that the couple are now loading up and preparing to take another swing at a renovation. They’re going to build upon that hard won equity and ensure a comfortable retirement.

Russell says first-timers need to pay attention to a couple of aspects when considering a prospect. It’s too easy to make mistakes.

“Buying in the wrong area, paying too much, having the wrong property manager.

“Having the house empty. We kept it quite simple and clean and fresh, so we tried to attract the right type of tenant. Certainly the area is crucial.”

About Kieran Clair

Kieran Clair is the Editor of Australian Property Investor. He had almost 23 years experience as a registered property valuer, freelance writer and commentator before joining API in 2013. After three years as an award-winning journalist with the magazine, he was appointed Editor in 2016.

Original author: Kieran Clair
Women deserve respect on building sites
Five Sydney renovations suburbs to watch
 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Monday, 21 October 2019
If you'd like to register, please fill in the username, password and name fields.

Top Articles

Random Posts

Translate Site

Company

LINKTOSALE.COM.AU PTY.LTD.
ABN: 77 626 273 050
Perth, WA 6036

Subscribe To Our Newsletter

0
Shares
Cron Job Starts