Having taken a voluntary redundancy and fresh out of a property renovation course, Caroline Michell was desperate to get involved in property renovations – but she had to overcome a few financial hurdles first.
“After leaving a job I did not enjoy and completing a professional renovation course, I really needed someone to enter a joint venture property investment with.
I now had the skills necessary to release equity in a property, but I didn’t have the impressive income that would convince the bank manager to give me a chance.
Enter my twin sister, Ameliaranne. She had the job that could secure us a loan, but did not have the time to renovate. I wanted to make renovating properties the basis of my day-to-day existence. In our late thirties, and without a property to either of our names, we were both acutely aware that it was time to clamber onto the ladder.
Our first run on the board turned out to be an apartment in the Brisbane suburb of Ascot. We sourced it via a buyer’s agent. I’d spent three months researching properties with the initial view of having a third partner in the venture. Unfortunately, they pulled out and by that stage we just didn’t have the time to spend doing another three months’ research. We both knew our strengths and weaknesses, and bargaining was neither of our strong suits. So a buyer’s agent made sense.
We purchased a large, two-bedroom apartment in a small 1970s block for $366,000 in 2014. The Brisbane market is no stranger to apartments, and we knew it was important to source one that would benefit most from renovation work and stand out from the crowd.
I spent two months living in the property, systematically ripping out and replacing the kitchen, bathroom and flooring – $30,000 worth of work, all up. We had the place revalued in February for $430,000.
The reason the renovation went so smoothly is largely due to trust and having shared investment priorities. Ameliaranne acted largely as the silent partner throughout the process, trusting me to make the day-to-day decisions regarding the renovation. We’re both happy to take risks and we’re upfront with one another about the potential worst-case scenario arising from our investment decisions.
Having existing proof of my renovation credentials undoubtedly helped the process. We managed to sell my mother’s house in two weeks in what was, at the time, a terrible seller’s market after I finished $15,000 worth of renovation work on it.
The Brisbane property was leased out at $415 soon after I finished the work. Unfortunately, we’ve just had to renew the lease for $400 after the first tenant was needed to relocate. Hopefully we’ll get that back up in January when the lease comes to an end. The plan is to hold onto this property for the longer term. Ascot looks set for reasonable capital growth over the next few years, and the renovations have really helped our property to stand out both in the rental and sale markets.
We’ve subsequently used the equity we gained from the Brisbane property to fund an additional purchase that we are due to settle on soon. That’s another renovation job.
The ultimate goal is to gain enough equity in a property to fund a ground-up, large-scale renovation on a run-down property and make significant capital gains.
Having my sisters support along the way has made it possible to achieve my dream goal of renovating full time; a lifestyle that gives me great joy and satisfaction. By joining forces we can also secure a better financial future for ourselves.”