First-time homebuyer: How a couple made money on their first home

0

A young couple who bought a house that was being sold for demolition turned it into a lucrative one.

Steve Mucha and his partner Ivette first entered the real estate market four years ago, when a unique opportunity presented itself to them after three months of unsuccessful research.

“We knew we wanted to buy a house, but we weren’t sure if we would buy an investment property or a house first,” Steve explained. “Then we saw our future property appear around the corner from where we rented in central Perth.”

While prices in their area were generally too high for the couple’s budget, this property was being sold for demolition, making it a bargain at $493,000. These days – thanks to renting part of the property on Airbnb for $80 to $94 a night – this bargain helped pay for their second home.

“It had a bird’s eye view of the city, but it certainly attracted more developers than regular buyers. So we decided to take on the project and combine investment and home ownership into one,” he said.

Steve works as an architect, which gives him a little edge when it comes to renovations. The couple were therefore open to the idea – but certainly not planning a project as big as the one they have taken on.

“It really fell into our hands and we had to deal with it,” he said. “Because we took out an additional loan for the renovation of $150,000 from the same lender, our total mortgage was $593,700.”

“The layout was really stuffy. It was built in the 1950s, so small kitchen, small living room, small bedrooms. We really had to change everything – it took about four to five months.

The couple created a plan to turn a three-bedroom, one-bathroom property into one that also included separate accommodation under the same roof that they could rent out as an investment.

“We added another bathroom to the master bedroom,” Steve explained. “Close the door so you can’t access it from inside the house and turn the outside window into a door. We also added a small kitchenette from Ikea and a small built-in robe, desk and a bed made of shipping pallets.

“The renovation cost us a total of $170,000,” Steve said.

“It’s small and super efficient. We had permission to run it like an Airbnb, or rent it to a third party. We are 90% busy now, and the unoccupied days are really just so we can clean it up properly in the meantime. We have very high demand.

Combining investing and living is something Steve now thinks more people should take advantage of.

“In Perth there’s something called the granny flat project, which basically means you can add a small auxiliary or additional living space if your house is a certain size,” Steve explained. “Then you can rent to third parties.”

“It’s something I think more people should take advantage of, especially if they’re struggling to pay their mortgage.”

The best part was that the couple found out that the bank would lend them money for the renovations, so they no longer had to save a deposit.

Lucky, given that the property disqualified them from receiving help through the homeownership program.

“It took us about two to three years to save a 10% down payment on our wages at the time (we now have a combined total of about $240,000), plus a bit more for renovations,” a- he declared. “It was really good for us.”

To save deposit and mortgage payments, while paying rent and living expenses, the couple we had to drastically reduce their lifestyle.

“We’ve really minimized our costs for things like entertainment,” Steve said. “We didn’t really reduce our food intake because we’re both very healthy and didn’t want to sacrifice that. But our car – it was a gamble if it would work every time .

It was a sacrifice they consider worthwhile, especially now that they are on their second property thanks to the money they made with Airbnb. In fact, Steve is so happy with the result he has since started a business share how they did it.

However, he admits that other homebuyers may want to consider their own abilities before committing to such extensive renovations.

“I probably wouldn’t recommend it to someone who wasn’t in the business – there are a lot of decisions to make and if you don’t have the experience it could be very stressful,” he said. he declares.

“If it’s just a cosmetic renovation, like we’re currently doing on our second property, I would recommend it. Very simple changes, such as flooring, paints and accessories, can add a lot of value.

“It was also a bit emotional, but we managed to get through it. We made it work.

Share.

Comments are closed.