An article by Katie Marshall – Author of Chicks and Mortar
A Lesson in Property Investing
A few years ago, I was inspecting a split-level property for the purpose of completing to sell. The property was a new build that was abandoned mid way through.
A Diamond in the Rough?
The property had reached lock up stage but work had not proceeded past the sheeting on the walls. You could see there were grand plans for the property. It was located in a prestige suburb and the size and layout of the property indicated it was going to be a big home when completed. Unfortunately it just didn’t get there.
A Victim of the Floods
To add insult to injury this property sat dormant during Queensland’s wettest periods and was victim to the effects of the 2011 Queensland floods. A huge amount of water had run through the sloping lot and caused significant damage in the process.
There was flood damage to the walls throughout the property and more concerning, the entire back section of the structure had dropped and separated from the front section. You could see right through the wall on both sides.
An Investor’s Perspective
As an investor looking to ultimately renovate this property to on sell, it was so important to get the right advice and recommendations before putting in an offer. The ability to make money was the ultimate goal we wanted to achieve. So before even submitting an offer, it was time to call in the engineer.
Could we reach our goal?
To make sure we reached our goal we needed to know:
- Accurate costings to repair the property – When doing a cosmetic renovation, it can be relatively straight forward to work out a budget and costings. With structural renovations or where major damage has been done to a dwelling, as shown in this property, it is more complex to work out the costs involved. Even a rough estimate can be way off. A structural engineer with more knowledge and experience will be able to help you work out more accurate costings.
- If there are any hidden costs – With major renovations or repair work to existing properties it’s so important to bring in the services of a structural engineer at the very beginning, (even when looking at a potential purchase) so they are able to inspect and advise on the hidden costs associated with the repair work that you may overlook. They will also be able to advise on other alternatives that may be more suitable that you may not have known about.
- Any potential problems that may arise in the process – A property with damage of this nature, it may not be as simple as underpinning and continuing with the build. It’s important to know how much damage has been done to then assess if there is any potential problems that may arise with the repair and also if final sign off on this property would even be achieved. Again, this is no time for guessing.
As our ultimate goal was to complete the build and sell for a profit, it was essential to get the advice of an engineer. Based on this advice we receive, we chose to pass on the property and move on to other projects.
Handy Advice from an Engineer
While an owner-occupier may be willing to invest more money into the project to see it through to completion, as an investor, the risk was too great.
If we hadn’t called in the engineer at the very beginning, we would never had known the full extent of what we were in for before it was too late.
It is never too early to get professional advice on structural renovations or repairs.
About Katie Marshall
Katie Marshall is a designer, project manager, property investment adviser and author. Katie has been investing in property for over 14 years and has worked in the property industry for over 10 years working on Residential and Multi Residential projects in Brisbane and on the Gold Coast.
In 2009 Katie founded Chicks and Mortar, a company that educates and supports women on their quest to build wealth and security through property, and in 2014 Katie released her first book, Chick and Mortar – A woman’s guide to investing in property.
Check out more about Katie and Chicks and Mortar at:
Buy Chicks and Mortar – A woman’s guide to investing in property at:
Website – www.chicksandmortar.com.au
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