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Buying a “Fixer upper”

Home or investment

Design Quiz (FRee)

budget template (FREE)

pinterest & Mood Boards

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Buying a “Fixer Upper”

5 Key things to know before you buy

For first or second time home owners, it’s important to calculate your own purchasing power, ​leverage ratio and risk appetite before committing to any property purchase. For many people, ​your primary residence is the most expensive asset you’ll own and you are locked in on a ​mortgage for up to 30 years. In Australia, most stand alone family homes sitting on a block of ​land will be negatively geared, meaning the fixed expenses associated with the property (including ​mortgage, interest payments and council rates) will be greater than the potential rental income ​earned from renting out the property. In these situations, there’s no cash flow from the property, ​and you’ll be relying on other sources of income (such as salary) to pay off your monthly ​expenses. The “investment” doesn’t pay off until you sell your property and you’ll be relying on a ​future capital gain, assuming the property has appreciated in value over time, to make a profit. In ​the interim, many folks find themselves in the position of being “asset rich and cash poor”.

In this environment, it’s crucial to calculate your maximum purchasing power. Once you’ve put ​down a deposit (typically 20% of the purchase price) and paid the stamp duty, which together ​probably comprises a significant chunk of your savings, you’ll need to determine what you can ​afford to pay on a monthly basis. The rule of thumb that most banks suggest is:

• The monthly property expenses (including principle, interest, and other taxes and rates), ​should be less than or equal to 25% to 28% of your monthly gross (or pre-tax) income.

For example, if your household income is $250,000, then your monthly mortgage and interest ​payments should be no more than approximately $5,830 (28% monthly gross salary). This means ​you can borrow around $923,000 from the bank. Assuming you have $220,000 to put towards a ​deposit (20%), your maximum purchasing power is $1.1M.* All major banks will have a mortgage ​repayment calculator, so make sure to re-crunch those numbers with the latest interest rates.

Once you’ve determined your budget, it’s time to go house hunting. During this often stressful ​and confusing time, there are a few golden rules to help ground the process and avoid being ​distracted from the goal.

Research the market dynamics to understand whether it’s a sellers’ market or a buyers’ market. In ​a sellers’ market, it is very easy to overpay, as buyers are pressured to pay a premium above asking ​price to secure the desired property. A buyer might only get one bite of the apple and are ​therefore encouraged to put in a “best and final” offer. New listings move quickly and the better ​properties might be off the market in days or weeks rather than months. Under these conditions, ​sale prices may be 10-20% above the top range of asking.

To avoid overpaying, a buyer should calculate the average price per square meter for the desired ​property compared to similar properties in the neighborhood. For example

• 6 months ago, the neighbor’s house was sold for $1.2M. The land size is 300 m2. That means ​the average price per square meter for the neighbor’s house was $4,000 (sale price / land ​size). You notice three other comparable properties being sold at $3,900 to $4,100 per square ​meter.
• A new property is now asking $1.4M for 300 m2 land, which equates to $4,670 per square ​meter. That’s a 17% increase. The buyer will be overpaying.
  

In a buyers’ market, the opposite is true. There will be more inventory available and buyers might ​find themselves picking between equally attractive options in great locations. This would be the ​best time to buy. Using the above example, the buyer should look for a property valued at below ​$3,900 per square meter.

Sellers of a newly renovated property will generally expect to be paid a premium for the labor, ​time and expense of undergoing a renovation. Depending on your circumstances, you may need ​something turn-key (for example, young family or lack of time and resources to undertake a ​renovation). However, if there’s an appetite to do some minor cosmetic work (e.g. a fresh coat of ​paint, and updating the bathroom), you’ll more likely than not be able to unlock additional value ​in a future sale, meaning you’ll make back the cost of the renovation plus a profit, depending on ​the quality, function and appeal of the renovation.

If you purchase a “fixer upper”, which is a house with good bones but needs a makeover, then ​you’ve entered the reno world.

It may be tempting to jump head first into a renovation, but it’s important to set up some ​grounds rules. If there’s intense time pressure to complete every room as soon as possible, that’s a ​red flag. A renovation is an expensive and permanent project. A rushed timeline can lead to ​mistakes and design regrets that can’t be remediated without another renovation. Going through ​the necessary research and planning will help minimize the Common Mistakes to Avoid, identify a ​consistent Design Style as well as stay within Budget.

1. Property as an investment
   

2. Leverage Ratio and purchasing power

3. How to Avoid overpaying for a property

4. Buy a Fixer upper over a Turn Key Property

5. don’t rush the renovation

Identify THE Purpose

When kicking off a new renovation, the first thing to determine is what’s your end goal? Setting a purpose informs how you will budget, ​prioritize and manage the renovation. Depending on the main objective, where you focus your time, resources and effort may differ.

Owner Occupier: You’ve purchased your primary residence and plan to live here for at least the medium term. Generally, the goal is to increase ​both the objective and subjective value of the property. This means, making necessary capital improvements house (including maintenance) that ​the next owner can appreciate. This is also your chance to infuse some personality into the home, in the style that most appeals to you.

Investment property: Your goal is to achieve a high rental yield by minimizing the time the property is vacant between tenants. So you’ll need to ​create a multifunctional space that is workable for the majority of tenants. Often this means neutral spaces, lots of storage and fixtures or ​appliances that are easy to repair.

Renovating a Home you own

You’ve just purchased your family home. It’s got great bones, but needs some ​work. As you prepare your budget, some basic principles may help every dollar ​go that extra mile.

Make sure you allocate enough budget for necessary structural and functional ​repairs or improvements first. These will help your home appreciate in value ​and also improve the long term quality of living. If you hired a building ​inspector prior to purchase, you may already have an action list of items to ​work with.

For free-standing houses, some common repairs to prioritize before cosmetic ​touch-ups include

• Fixing a leaky roof
• Re-stumping the foundation
• Replacing old plumbing behind the walls of your bathroom and kitchen
  
• Removing hazardous substances, such as mold/water damage, termite ​damage
  
• Adding central heating/cooling or solar panels for energy efficiency or a ​water tank
• Replace old/broken decking, patio or fence
  

For apartment buildings in high density cities (such as in Manhattan, New ​York), building regulations will govern what you’re allowed to do, and non-​compliance attracts heavy penalties. You may also be shut down by your ​building super or management for not obtaining the approvals. In such places, ​most structural or technical work will require a building permit from the ​Department of Buildings, and you’ll need a licensed architect or general ​contractor to help you submit the necessary paperwork. This will impact your ​budget and project timeline.

1. Prioritize Capital Improvements
   

2. budget basics

Whether house or apartment, we recommend following the same order to ​determine the priority and scope of your project.

1. Identify your capital repair needs (what’s a “must” v what’s a “like to ​have”) and budget those out
2. Understand your local building or council approval requirements and ​related timing/expense
3. Determine which items will need a licensed professional (such as ​plumber, electrician, roofer)
4. Finally, what remains will be your cosmetic or DIY budget.

For a home you own, patience is a virtue. You may have a bit more time to ​play with and can stagger the DIY components until after the essentials are ​taken care of. Your home is a living project, so take the time to do each stage ​right.

3. Prioritize bathrooms over kitchen

If you’re dealing with an outdated kitchen and bathroom(s) and have ​a modest budget, you’ll need to determine which room comes first.

For most people, a new bathroom will get you the most bang for your ​buck. This is because a basic bathroom renovation

• is typically 20-50% of the cost of a kitchen
• requires less decision making on fixtures and fittings
• can be completed sooner (which gives your whole home that ​“newly renovated” glow earlier)

Bathrooms also have a tendency to “date” quicker than a kitchen so a ​refresh is often more impactful here.

Pro Tip: For small bathrooms, if you’re not sure about matching your ​wall tiles to the floor tiles, select from the same tile series, and use the ​smaller tile for walls and larger tile for the floor. That will guarantee a ​cohesive, well-designed and elevated look.

For a more sophisticated approach, check out the tips in our “Room ​by Room Guide”.

4. customize your space

Add features or spaces that bring you joy.

I’m a huge coffee drinker and have a little red barista coffee machine. ​So when the opportunity arose to renovate our kitchen, we created ​this “coffee nook” for my daily morning ritual.

It has created a little moment of magic every morning, ever since.

What’s your coffee nook? Is it a reading area? A yoga retreat? ​Cabinetry for your collectibles? A music room or workshop?

To truly transform your home into a sanctuary of joy and ​inspiration, take time to design functional areas that mean the most ​to you, no matter how big or small the space is.

You’ll never regret adding something that facilitates your passions, ​habits and routines. This is also your permission to color-drench, ​adorn your walls with wallpaper and invest it custom fittings and ​fixtures.

Pro Tip: See the Common Mistakes to Avoid before making ​committing to big expenses.

Renovating your investment property

If your project is for an investment property, the focus will be slightly different. Other than capital improvements, which should still hold ​priority, think about what will get you the biggest return on your investment. This means, appealing to a wider audience.

Some basic tips for a low budget touch up with maximum impact are:

• A fresh coat of paint - never underestimate the magical power of a newly painted room. If you only do one thing - do this. ​Remember to save the left over paint for easy touch-ups. When choosing the right paint for your room - always grab at least 3 ​samples and swatch them across your wall. Let it sit for a few days and notice the color at different times (morning, afternoon and ​evening with your lights on). Prioritize neutral tones on your walls and cabinetry. Warm whites, greys, taupes, and beiges will ​accommodate most renters and their furnishings.
• Buy midrange appliances that have longer warranties or are easily serviceable. When the tenant calls with a broken dishwasher, you’ll ​be able to quickly get that fixed without having to order parts on backorder.
• Any additional built in storage space - such as wardrobes, shoe storage and bathroom storage - will always be appreciated.

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iDENTIFY Your INTERIOR DESIGN Style

Before getting started on any project, we need to have a design vision. But even that can be surprisingly tricky. With so many ideas out ​there and everyone having an opinion on how to do things “right”, things can get overwhelming quick.

Before my first renovation, I did what every DIY renovator does - scroll Pinterest for ideas. Nothing wrong with that approach, but ​without a general direction, I found myself toggling between entirely different aesthetics (Scandi or Hamptons? Minimalism or Mid-​Century Modern?). This lead to decision paralysis about the endless possibilities, and not knowing how to “maximize the potential” ​of my space.

What I needed was to understand my own distinct design aesthetic. This may be a theme, vibe or feature that brought me the most ​amount of joy when I walked into a room. Like your personal fashion style, a space should be a reflection of you - your personality, ​quirks, passions and values. At its core, this is an exercise of self-exploration.

Things finally turned around when I took an online design quiz (Houzz had an amazing quiz at the time). This simple exercise helped ​me focus, narrow down the inspiration more effectively and eliminate distractions.

You can take a FREE Design Quiz below. Or, a quick google search will generate a bunch of results for comparative purposes.

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renovation BUDGET Template

Budget Basics

A good budget is realistic, well researched and contains ​some flex for contingencies and unexpected costs.

Your budget should be detailed enough to keep you on ​track of developments, and be reviewed regularly to ​minimize cost blow-outs.

I prefer keeping my budget in excel format, with drop ​down selections to help me categorize, prioritize and ​plan. I like to drop the doc into a Google Drive so my ​partner and I can both access and update in real time. I ​also like to add links to products and prices, to take ​advantage of sales and discounts.

1. Start with a “Wish List” of everything you’d like to do for your ​project. Include both capital and cosmetic improvements
2. Research the cost of necessary items, approvals and professional ​services by prioritizing the capital improvements first. What ​remains is your cosmetic budget
3. Try to be disciplined in your budgeting process. If you are ​running low on funds for non-essential works, consider delaying ​or using the opportunity to learn how to it yourself (Youtube ​tutorials are great for this)

If you need help getting started, I’ve shared a FREE Budget ​Template that includes everything you need to self-manage your ​whole renovation.

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HOW TO USE Mood Boards

5 fool proof rules FOR A COHESIVE LOOK

These days, there are tons of free platforms like Pinterest, Instagram, AD and ​Houzz to draw inspiration from. However, with so many ideas out there, it ​can be overwhelming to find your inner authentic style.

To avoid decision paralysis or making some common mistakes, do a few short ​exercises:

1. Your Interior Design Style: Take an online quiz to identify your inner ​style - feel free to use mine (click Design Quiz , it’s free) or any other quiz ​from a quick google search
   
2. Mood Boards: Mood boards have long been the tried and tested way to ​bring together a cohesive room. When setting up an online mood board, ​Pinterest is hard to beat. For those extra go getters, you can also use a ​storage box or wall to display pictures, textiles and samples that most ​appeal to you. During the inspiration sourcing stage, don’t overthink - ​you’re ultimately distilling a consistent and central theme for you
3. Cooling Off Period: To distinguish between what’s trending from ​what’s your true style, you need time for ideas to settle. This may be a few ​days to a few weeks. If you are still drawn to the same designs after the ​cooling off period, you’ve found your style
4. Bring Your Samples: When shopping for that tile, fixture or furniture, ​do not get sidetracked. Bring your photo/inspiration with you and stick ​to it. Otherwise, you’re coming home with mismatched items that don’t ​fit the rest of your space
5. Capture Your Inspiration: Next time you’re at a cafe, hotel or restaurant ​that inspires you, snap a few photos and study them. Identify what ​appeals to you and then mirror the components at home

BREAKING IT DOWN

FEATURED ROOMS

kitchen

So you’re re-doing the kitchen. Congrats! I love kitchens, because its an exciting opportunity to create something eye-catching, bespoke and functional, no matter your budget. Here, I’m sharing some lessons from my own kitchen projects.

The Budget Kitchen

For a low cost yet high impact look, consider these quick fixes:

1. A fresh coat of paint for your cabinets
   
2. Replace cabinet handles with a modern twist
3. Replace or repaint the backsplash
4. Install under-cabinetry LED lighting

These can all be done as a DIY at a lower cost using supplies from your local hardware store. There are many helpful Youtube tutorials that offer a step-by-step guide. This is great for an investment property, or if you’re a renter yourself (with permission from the landlord).

The Full Kitchen

This is a big investment in your home, so it’s worthwhile investing in quality pieces and ​colors for a timeless look.

Countertop

Choose a high quality, durable material such as natural or synthetic stone. Do your ​research and take the time to find the right material, finish and texture. I like quartzite for ​its heat resistance and avoid marble due to its porous properties. Engineered porcelain is a ​new technology that’s also gaining popularity.

Pro Tip: If you are using tiles on your backsplash, always ensure the tile color matches the ​veining on your countertop. Always take a few sample tiles so you can do a color ​comparison.

Cabinetry

• For a sophisticated look, build the top cabinets to the ceiling.
• Build in one or two glass display cabinets to showcase your dinnerware. However, ​avoid using glass doors or open shelving for everything, as we all need hidden storage ​for our daily kitchen utensils, appliances and cookware
  
• Consider adding more dimensional elements by having top cabinets set back
• Don’t skip the handles if in doubt
  
• When choosing a finish, avoid gloss or lacquer - not only do these “date” your ​kitchen, they are also hard to repair if damaged
  
• Check in with your needs - plan for dedicated spaces such as pull out spice draws, a ​sliding pantry, a baking station, coffee nook, or built-in space for appliances such as ​your microwave. Get creative.
  

Electrical and Lighting

• Under-cabinet LED lighting is a must if you want to take your kitchen to the next ​level. Choose a warm tone (3000 - 4500k) for optimal results
  
• Take your time finding the right island bar lights, they can really pack a punch.
  
• Add more power sockets than you need for countertop appliances. If you have an ​island, add power sockets here too. We generally go for 6 or more built in sockets for ​each kitchen - this gives us enough flex for charging phones and laptops in the ​kitchen without having to unplug the toaster.
  

master bathroom

According to online surveys, something like 63% of renovation projects involve a bathroom remodel. It’s no wonder - on a tight budget, redoing a bathroom is much cheaper and impactful than a full kitchen makeover.

The Bathroom Remodel

Bathrooms can be tricky because they involve small spaces with minimal storage. However, if you follow some basic rules, you can achieve a show stopping look on a budget.

1. Invest in one to two “wow” pieces - like a high end vanity or designer mirror cabinet, and save in other areas (such as tiling)
   
2. If in doubt, use the same tile series for the walls and floors
3. Tiling should go all the way up to the ceiling for both water resistance and aesthetics
4. Avoid high gloss tiles or dark colored grout
5. If you live somewhere where winters are cold or damp, add a ceiling heat lamp or in-floor radiant heat
6. Decide on accent lighting before tiling and fixtures are installed - once your walls are tiled, it may be too late to pull out electrical wires for additional lighting

LIVING ROOM

The Basics

If you’re on a budget, revamping your living room might be as simple as doing two to three things, in the following order.

Paint Color - honestly, it still surprises me how transformative a fresh coat of paint is. If there is only one thing you do in this room, it is to find ​that shade that breathes life into your room.

Pro Tip: Make sure to do 3 or more swatches on your wall before choosing the final color.

Lighting - lighting is not purely functional. Changing up the light fixture or adding recessed lights or cove lighting can really shake up your space. ​The right light fixture can serve as the centerpiece of the room.

Pro Tip: You can also use large mirrors or sky lights to illuminate a darker space.

Joinery - Ever notice the number of bookcases on your Pinterest mood board? If you have the resources, a pair of built-in bookcases really ticks ​both boxes - function and aesthetics - making it a design workhorse.

A living room is where your home decor and furniture truly shines. This is your opportunity to add your personality and style once you’ve ​identified your taste and aesthetic (you can take a FREE Design Quiz here).

Copyright © 2024 Notre Jardin Interiors. All Rights Reserved

Creating beautiful spaces is a passion project outside of my ​corporate day job. I believe anyone can learn the design and ​management skills to transform your home into a space ​that reflects your lifestyle, passions and values.

After a decade of home renovation projects both in city ​apartments and suburban houses, I’m excited to share what ​I’ve learned along the way, including the basic building ​blocks of a self-managed renovation, from inspiration to ​completion. I believe that creating an inviting home should ​be assessable and affordable to everyone, and that you ​don’t have to spend a fortune to achieve a sophisticated, ​polished look.