This week the team cover off on how in this current market First Home Buyers may be better to sacrifice the 'dream home' first & start with a fixer upper- Aaron talks about the process of renovating his home & how it was the best option for him.

What do you think? Buy New or Upscale the Old?

Episode: | SE3EP80
Show Title: | Renovating For Your Future
Cast: | Aaron Horne, Patrick Berry & John McGregor
Show Length: | 21 minutes 47 seconds

Patrick: If you can pick some of those bigger items and find a way to make them happen then that'll help you grow the equity to do the smaller items throughout the whole house 

[intro music]

Going once... going twice... SOLD! You're listening to The Property Pod!

Aaron: All right, guys! Welcome back to The Property Pod! Your weekly engagement here into real estate in the Hobart Marketplace. I'm your host, Aaron Horne, and I'm joined-- as always--by our two real estate agents: John McGregor [John: That is me!] [laughter] and Patrick Berry!

Aaron: Bit excited this morning, John?

John: No, is this the way you pause, as it was like: "present" [laughter] 

Patrick: Aaron's getting his old school teacher back then [laughter] 

Aaron: Yes, we are all here in the room and we're all very excited to be back with The Property Pod.Whether you're listening on a super yacht in the French Riviera or you're a nun listening in your chair knitting beanies for your grandson, we are here for you. 

John: Wow, that works perfectly.

Patrick: I like the reach you've got these days. 

John: I was pretty happy with that.

Aaron: I was lying in bed last night thinking about that one just kind of been like, how can i reach out to our two biggest fans? We've got Megan in [um] France and then nun sitting around.

Patrick: I apologize, Simon. I know you love to walk the dogs on a Sunday morning and listen to the pod, so my shout out is to you.

Aaron: Oh, nice! Actually we got a really good feedback for last week's episode from Simon. says [John: Yeah!] he was tracking along-- [Patrick: walking the dogs to the cafe and wanted to reach out and say: Congratulations to your dad, Chris. He really enjoyed listening to the show.]  

John: [Uh] that was actually really nice to hear. Hey, we had a few comments like that, too. I think people are actually surprised by the depth of dad's experience [um] because he's always fun to joke around; he's been good at his job. But, you know, it does stretch back a lot further than probably people appreciate but it's really nice for Simon to say that actually. 

Aaron: Even as you went into like all the stuff in the very long-winded intro that you read out which i did like Pat's joke at the end he's like all right that's the end of the episode [laughter] we're all done. But as we've gone through that, I was just kind of like: oh man! he's like had his finger in so many pies across so long and is really really engaged in the real estate industry so yeah it was very very interesting listen [uh] having your dad on and I did wonder you went to Adelaide for the weekend with the whole family [John agrees] Were you overshadowed by his celebrity now that he [uh] like there was Luke? [Patrick: he's been on the pod] 

Aaron: Yeah, now he's been on the pod, did you just feel like?

John: Let's just say, he's brought back a fur coat. [laughter]

Aaron: All right, boys. [uh] That's enough chit chat for this morning. Let's jump into a very well-

researched show. [the two agree] so just a shout out to our-- we actually have a new staff member on board who's helping out with the pod and helping out with all things content across the 4one4 Property  Co.We've kind of been promising for ages on the pod that we wanted to kind of be an information hub--a place where people can come and find all the stuff they need to know and we want to really help [um] grow everyone's kind of knowledge based on all things real estate. We're not here to be gatekeepers of information; we're here to kind of share it, so Niño has come on board and is absolutely killing it in [um] the research department and kind of helping us with blog posts, helping us with our social media and yeah absolute--

Patrick: We've got big plans for Niño. He's going to help us with, like Aaron said, blog posts, researching our podcast each week, but he's also going to help us put some Buyer Guide books together and some educational suburb books based around, you know, what it's like to live in a suburb, what demographic it is, and it's a wealth of info, so we really want to build a catalogue of just information to really help people better understand the property market.

John: Yeah,  absolutely! And I think, another reason why I'm excited about, is that that's his job at the moment like just create content, research, you know, provide and then reach out and obviously, in the meantime he's reaching out to us as well and get content, you know, ideas from their agents and everyone in our office as well, which is cool. 

Aaron: Yeah, it's one of those things where it's something we've always wanted to be doing, but we've just kind of had time constraints and found it too difficult. Yeah, we found a way to make this work and so it's very exciting.

John: Welcome, Niño, as our official copywriter! [the other two agree] absolutely and the most comprehensive useful notes we've ever had on the pod.

Patrick: Yeah, we're not actually guessing  this week

John: We've got notes. [laughter] so look out! [laughter]

Aaron: All right! So, let's jump into this first article here that [um] he's put it together.

Basically, what we wanted to focus on today was [um] was kind of renovating and first homebuyers, so jumping into the marketplace and kind of knowing not to stretch beyond your means, i guess would be a really good way of summing it up straight away

Patrick: I think, [um] Aaron, you're a prime example of this before it actually became a trend. 

Aaron: Yeah, look. I was trendy before--way before my time... [laughter] I've been cool since way back when. [laughter] 

Patrick: Yeah, I remember in high school, very cool! [laughter] 

Aaron: Thank you very much!

John: It's funny because it's true. Tell us about your story, like what was the genesis to start thinking about that to begin with?  

Aaron: Yeah, it's actually kind of ties in really well with [um] one of the articles that [um] Jarrad Bevan had written for the [uh] "Renovation: the key to success for first time homebuyers". So, the story goes that Robert Jurasovic, I hope I didn't say that wrong--he's right. He's a 21-year-old first-time homebuyer who made a purchase in Blackmans Bay. [um] He looked for properties kind of all through the Kingsborough area, all through Hobart, [um] but a way to find it at a lower price is he found a unit that needed a little bit of fixing up and he's going to go in there, fix it up a bit kind of mess with the kitchen, and give it a bit more extra life and [um] and go from there. So, that's basically the story of my first home. It's funny because we looked into new builds and kind of thought: is this something you want to do? and for me, the main idea just kind of was like: I don't feel like this would be mine, I don't feel like i would have that ownership on this--that kind of kit home that's been built and it's kind of just got all the bells and whistles already there. I love to kind of tinker; i love to have the [uh] freedom to make my own thing and yeah within a week and a half of discussing with Sarah, my partner, [um] like: Oh! do you think we should look into buying a home together? I walked into a house that, took the photos of, and just fell in love instantly and could kind of already see the changes I wanted to make, like it was definitely well-loved. It had been lived in by a family, I think, for the entirety of its life and from there, we came in and we like pulled out a wall. The first thing we did was pull out the carpet and kind of polish up the floorboards and just give it a new lease on life, so--

Patrick: I think, the biggest thing you did was really that wall 

Aaron: Oh yeah!

Patrick: Taking for anyone that doesn't--people don't know,it was sort of a kitchen dining space and then the lounge room was on the other side and both spaces were quite skinny and they were long, but skinny. [John: They had to walk through like a "U"] yeah, and [um] by just removing this one wall back to the sort of the start of the hallway and it just really opens up the space and now, you have this really modern open-plan living area which is what you would normally come to find in those newer spec homes that people built.

Aaron: Yeah, so it was kind of one of those things where we looked at the [um] oh i looked at it straight away and i was just like, i mean, if you just pulled this wall out--if you can--it will just open up this space.

John: You can do anything with enough money [laughter]

Aaron: Well, funnily enough, yeah! It was one of those things where it was a load bearing, so we had to [um] you know, get someone to come in and work out how to put in the beam and do all those things, but it was funny the day before we pulled out the wall, I was like: "what if I'm wrong?" "what if this just messes with everything?" "This is my biggest investment ever."

Patrick: I immediately regret this decision

John: Yeah, you can always build a bag! [laughter]

Aaron:  Yeah, I didn't think of that! But yeah, so I had a little panic that, like "what if I'm wrong?" But it was one of those moments of "this is make or break" and I feel like it's really made the property what it is, and you walk in you're engaged in this big family area straight away.

Patrick: I think [um] as well just the whole reconfiguration, you didn't do a lot of big changes, but you did some important ones like the laundry at some stage have been turned into an external laundry that you can access from inside the house, adding a small cavity slider which I think you did through the walking--not the walking dead--it was impressive.

Aaron: It used to be, yeah, so you just that classic. You go down the hallway and there's the two linen closets, it's like: oh, if we just move a smaller closet into the laundry space which was really large that'll open up a chance to be able to get into access yeah internally which--

Patrick: And then, the other thing I really loved as well is just the addition of the french doors to the backyard, just to create that "inside-outside" experience, so [um] you know, sliding doors become really popular, but just those classic doors that you guys have installed I think just really adds to the character of the house and just connects that backyard to the living space really well.

Aaron: Again it was one of those things that I kind of saw straight away in my mind's eye and just was like: "oh, this is kind of what i think will go here" and yeah, speaking to a builder, he was like: "yep, sweet! we can definitely arrange that." [um] so, i guess, yeah, the really important thing is kind of being open to the idea of what you walk into and see you can change and you can adapt to [um] to fit yourself.  

John: And did you start the work immediately? how long did you live in there before you started the--  

Aaron: So the day we took [uh] possession, I pulled up the carpet [um] I knew that they had some floorboards under there, but i didn't know what condition they were in and they actually were already kind of polished from the beginning, but I imagine it might have been something to do with [um] keeping the temperature in and stuff with the carpet, but we've since put--what's that stuff called? insulation! and stuff [the other tow agree] so, we've rectified that issue, but [um] yeah no, it was just one of those things where we started straight away with that and then just tinkered away so it was probably a... ...two-year protest, I want to say. How long have I been in there?

John: I'll be about that and look, you've still got things you've worked on

Patrick: Like it's just a completely different place to what it was [Aaron agrees]

John: Well, that was because it was that [um] the facts that he mentioned in the, you know, the Finders First Home Buyers Report 2021 just said one in five or twenty percent plan to renovate immediately after buying or 30 percent will do something within the first 12 months, so it's right in line with that, but one of the things that, sorry--

Patrick: I mean, oh you go I was just going to jump in on there and just say that [um] what I really like about how Aaron and a lot of people that this article sort of references is that when you try to do it over the course of a couple of years as well, it gives you opportunity especially in the market or in-- for the property to grow equity and then with the renovations you do that adds equity, but then you've got the ability to [um] redraw against that to be able to do the next part of the project, so you might not be in a position to buy it on day one and just jump in and gut the entire place and rebuild it yeah, if you can, fantastic; that's awesome! But if you can pick some of those bigger items and find a way to make them happen, then that'll help you grow the equity to do the smaller items throughout the whole house. 

John: Yeah, that's so good. Because one of the things that that blog said--that the reference I really like, he just said he had a very small list of must-haves

Aaron: Oh yeah, I loved that when i read that.

John: It's always the case that everyone has a complete flip when the first time's like we must have-- and then we get it too, though. What property looking for? Well, it must have this, this, and this and this [Aaron: it has to be in this suburb]   

John: I won't pay above that it's like, oh it's like: mate, you--you're just setting yourself up for failure and disappointment, because it's just like sometimes and even like my first little unit was a small little two-bedroom in an apartment building [um] at Claremont [um] and then it's like: well, but it was--it was a first unit it was just like, great i mean, you know, it was pretty well the cheapest I could buy, but I've got something then [um] and you can start to build up from there over time and obviously, he's sort of taking the same approach. He's like: right, I'm just going to get in; I'm going to get started; I'll just grab something; I'll do some bits, and you know, take the long term so it's probably a much easier process I'd assume for him to find something after he, you know, cut down his list.

Patrick: I think as well, what [um] some people might think as well is like: oh we'll buy this we'll fix it up we'll flip it and we'll go buy the other thing, [John agrees] but i think what happens as well is that it becomes a home and then people start to love it for different reasons to what it actually was when they first bought it.

Aaron: Yeah, a hundred percent, and that was kind of the one reason why I was really motivated to get in and make something my own was--I was kind of: oh we can like it'd be so interesting to see the ex-homeowners come in and just be like oh look what you've done to the place like, because I'm sure they would have.

Patrick: Our family memories are gone... [the other two agree]

Aaron: So yeah, so all the joy we get out of it, they're like: oh well, such and such we used to mark their height on that wall and now it's gone so it's interesting, because yeah, you can really put your own stamp on things [um] and it's not just about building equity or making [um] kind of monetary gains. It was kind of that I'd really like this for, you know, if I'm cooking in the kitchen and Sarah's in the [um] living room with Jack, so I want to be able to be watching that and be part of it rather than being like: oh, I'm in the kitchen and I can hear them having a great time, so--

Patrick: We-- [um] when we moved from our first place to our  second place, we had Parker's height all on the inside of the architrave on the door, I pulled that bit arc and took it with me and put a new vid on but I don't know whatever happened [laughter] to it and then I always think: what a waste of time, that was pulling that off, painting that up, fixing it all back up, so I could take some little pencil marks with me and then, I don't even know what as part of the move, it just-- 

John: The intention was good [laughter]

Patrick: So yeah, I know that sort of sense of home and making it your own piece Aaron: Yeah no, it's really cool.

John: Thoughts with that one, too, is we had--often I'll just say to clients: hey, don't--[stutters] if you've never done it before, don't rush in and do a reno [renovation] before you know, before you've even lived in the home, because, you know, you're coming in with a whole waft of expectations of what you think you want, but you haven't actually--what you think and you know how you experience it when you're living there are two very very different things and how that played out was a house that had sold a young couple at Montague Bay and i think that's right [um] [Aaron: no one's fact-checking]

John: Yeah, one nearby even stuff [um] and that [uh] they had [um] it was sort of a 1930s, 1940s [uh] brick home. We had a lot of like retro features as well. [um] you know, really high ceilings, you know, beautiful boards underneath, but there's obviously the kitchen's really perky, the bathroom is really pokey, so it wasn't--wasn't perfect by any stretch of the imagination and they actually got me there before they [um] to say: hey, look. Here's what we're thinking of doing. How do you think that would play out? If we were to look at resale long down the road and we had a really good long discussion and, you know, throwing back, you know, things from Pinterest and images, etc [uh] and then when I asked how they go and they said: oh look. We've decided to hold off for, you know, at least 12 months just while we live in the house, because we thought about what you said, though, okay, it's actually a very different experience than what we thought we'd want, so now, like older expectations and what they want to do have started to change, because now they're actually living in the house. All of a sudden, what they thought they would have done by ripping that down and putting that, they're like: now that would have been a terrible idea; wouldn't have worked at all.

Aaron: Yeah. Well, I guess that was my fear [uh] leading straight into walking and being like: oh yeah! I'm going to rip that out, put these things in, and luckily--[Patrick: It sounds like you got lucky John saying.] yeah no, well that's what I kind of mean 

Patrick: I mean, Aaron, you really rolled the dice on that. 

Aaron: No, well, I was kind of petrified the day before I just mentioned before, so yeah.

John: Well, it's sort of again, though, someone--some plans are much easier to work with than others that you can just very quickly see the difference in the what you're trying to achieve, and i think what your story was most important is that: "what I want?" I want a feeling where [uh] Sarah and Jack are playing and I'm in the kitchen and I can see and experience it [Aaron: yeah ]that's what i want. Yeah [Aaron agrees] and that makes a clear sense. Sometimes, people go: "I want to open a plan" why? you know, like, what what are you trying to achieve out of it?

but I think, trying to match a story like that is perfect.

Patrick: I really like your theory, Aaron, but by the time they get to, you know, five, six, seven, you'll wish those balls were there [laughter]

Aaron: oh my god!

[laughter]

John: It was a terrible decision, Sarah.

Aaron: Just sticking with [um] renovation stories, here, it looks like [uh] one of the most viewed properties in all of Tasmania [uh] in recent weeks was just a fixer-upper kind of in looks like Fletcher Avenue. You're talking about a 1940s 1950s build; this was a 1964 home. Looking at the photos, it looks really tidy looks; like it's just kind of one of those unassuming properties that you kind of would just think, you know, it'll get garner a little bit of interest, but it must have just been priced in a really good spot. Moonah, I guess, is sought after in [um] in that it's location's really nice and--

Patrick: It went to market; it offers over 405 and for Moonah, that's incredibly cheap

John: Yeah, absolutely. Well, the median--Moonah is now close to 450 to five getting close to 500.

Patrick: Yeah, so for property, it's a very low price, so I was going to always go gangbusters

Aaron: So, that's kind of because it's got kind of a few things that need to fix up it's kind of not meeting the regular market trends of being like a modern kitchen or something in it yeah probably, it's a bit lower.

Patrick: I think the way, John and I--correct me if I'm wrong, John, but what we would normally do in pricing is we figure out what the median is and then we look at a lot of homes. We get a feeling of what the average place looks like, so therefore, the average price plays should achieve "X" [um] but then there's always homes that don't meet the average maybe they've got a rundown part of the property or something's just not right whether there's a structural issue so then that'll adjust the price down or maybe it's been fully renovated and it's not a 1950s home anymore, and it's really modern place so therefore, it's better than the median price, so the median sort of starts our expectation and then we grow from there depending on what the property is, don't we?

John: Well, it's--we actually, at the moment, there's correspondence going out into our local industry from the property agents board with concerns about under quoting, at the moment, when antiquating is specifically when it's advertised way below what the owner's expectations would be in order just to bring people in, so--

Aaron: I saw that article [um] come through into my emails yesterday. I was like: we've already got this great show planned [um] perhaps, that's something we could address just moving forward just because it's a pretty interesting idea in such a hot market. 

John: Absolutely! [um] and I think, at the end, I suppose, if we just park that thought in many ways, because it is like, when you, like as you said, when we had four hundred thousand dollars for a house in the Moonah,

Patrick: so cheap [laughs] as in real cheap.

John: So, the idea that it went, you know, 20 percent above the asking price--

Aaron: Yes, I think just the stats here are saying [uh] the home was sold for 486 thousand, so-- 

Patrick: 11 offers on the property, but that's not unusual. A lot of properties get multiple offers.

John: But yeah, obviously, you know in up with markets it's hard to know where the end game is going to be. Sometimes, though, with properties, where there may be a stretch of you know 20 percent above the asking price in an area like Moonah, that can be concerning and you could really understand why consumers are like: "why the hell was it even priced at that point, anyway?" I think, though, hiking back to the article where Moonah transformed was that in order the next suburb over which is Newtown which is considered, you know, an affluent area in that sense [uh] very sought after [um] is that you can buy the same house in you--we were able to instill can, by the same house and Moonah as opposed to Newtown like 20 percent less than the hour--less price--and you save about three to five minutes worth of drive time, so what happened with you know Moonah and Lutana, in the those first suburbs closest from the Hobart [um] Municipality... as it all of a sudden they became exceptionally trendy so, I mean it has got the commercial aspect, it has got that urban aspect, it has got a whole other ways that it's transforming, so bringing back also to where you've got this retro design which is starting to become exceptionally popular, you know, those triangle brown dresses and stuff like that are all exceptionally [um] you know, that's the--that's the current--

Aaron: I don't know what the triangle brown; I was thinking of that rattan kind of stuff that's coming back at [um] but yeah triangle brown…

John: That's what happened to my hand, because legitimately a house we sold in Maple Avenue which would have been identical to this Fletcher one, [um] it was filled with like a 1950-60 furniture, like--it's like it hadn't been touched throughout history. It was like a museum piece; [Aaron agrees] it was remarkable [um] but when we sold that, it was just before like our generation specifically like that's become our antique in some ways [uh] 

Patrick: I can see that

John: So, it's like, but that was before it was popular, so no one was like...

no one wanted it.

Aaron: That's a [um] it's a really interesting kind of statement you've made, John, because we've actually got another Niño article coming through later this week about Moonah and it's [uh] rise in kind of trendiness and just how, you know, you don't have to go to the North Hobart strip anymore to get really good food, that's the Moonah strip is becoming a new place to [um] kind of--to eat and go out. You don't have to go into the city anymore to do that, so--

John: People coming into Moonah for coffee specifically from both sides of--

Patrick: Oh yeah, I don't know who does that [laughter]

Aaron: No, so that's a really good [uh] it's a really good point to [uh] to probably finish on today, John, so yeah, we will [uh] we'll link that article into the show notes for this one [um] really enjoyed having a well- researched show that was... 

Patrick: Oh, I'm feeling slightly guilty because Niño has done three articles and we've covered one so 

John: Oh, we crossed off, too, there. Was that--was all right. 

Aaron: It's all good. It just means he's got less work to do this week [uh] because we've already got some other stuff to talk about next week [Patrick: beautiful!] 

Aaron: Awesome! So good to have you guys back. I've done pretty well with the buttons today.

John: Is it flowing a bit more naturally now?

Aaron: Yeah, it's probably easier with three rather than four, but we'll just see what happens in the future. [laughter]

Patrick: Awesome! Thank you for a good show, guys!

Aaron: All right, see ya! Bye!

[extro music and disclaimer] You have been listening to The Property Pod, recorded and edited by 4one4 Media House in conjunction with 4one4 Property Co. This podcast is general information only and the thoughts and views expressed is the opinion of our panel and listeners should always seek then use their own investigation into any topic we discussed to ensure they fully understand their own situation. It does not constitute and should not be relied on as purchasing, selling, financial, or investment advice or recommendations, expressed or implied, and it should not be used as an invitation to take up any agent or investment services. No investment decision or activity should be undertaken on the basis of this information without first seeking qualified and professional advice.