You know what they say, buy the cheapest house in the best neighbourhood! Well, that’s what our very own Carmen Campagnaro did here at her property in the GTA.
This house was reasonably purchased off-market, cosmetically renovated, and an in-law suite was added with a separate entrance. Read on to find out how value was created through a BRRRR (buy, renovate, rent, refinance, repeat) strategy!
Purchase Price: $750,000
Renovation Cost: $130,000
Total Cost: $880,000
Re-Appraised Value: $1,350,000
Refinance at 80%: $1,080,000
Equity Take Out: $200,000 + get to keep the property and rent it out
Approximate Monthly Mortgage Payments + Expenses: $4,500
Approximate Rental Income: $6,500
Approximate Monthly Cash Flow: $2,000
Paint it out!
If your cabinets are in great shape consider having them professionally painted to dramatically change the look. The cost to paint this kitchen was approximately $2000, which is a huge savings from having to replace the cabinets all together.
Hardware and Accessories
Update your kitchen hardware with something more modern to totally transform its look. In this case Carmen went with gold handles to match the new gold faucet and accents throughout the kitchen. The final look came together by adding a brand new stone counter top.
Add a bit of design flare without being too bold. In this case Carmen decided to use a classic Moroccan tile throughout the main floor. By going with a muted grey shade for the tile, she was able to tone down the pattern and still create a design statement without being too loud.
Look for a property that has wall-to-wall carpeting. Chances are there is hardwood hiding under that carpet just waiting to shine again. In this case Carmen was able to uncover a house full of beautiful hardwood that was in great shape. This created a huge savings for the project, by not having to install new hardwood throughout the entire house.
Don’t underestimate the value of first impressions! Curb appeal is very important to making a home more appealing to buyers. In this case, Carmen added some much needed architectural flare with a new covered front porch. She also went with a fresh new paint colour, one that makes the house really pop amongst the other homes.
If you are looking to increase
rents, consider renting your unit as a furnished rentals or Air BnBs.
Typically there are larger upfront costs and increased property
management required when using this strategy, however, the upside in
rental income compared to a traditional unfurnished rental, could really
make a difference in your cash flow and overall profitability.
Second Hand Treasures
Looking to furnish
your property on budget while still maintaining a unique and high
quality product? Consider sourcing materials and decor from second hand
sources such as Kijiji, Marketplace, estate sales, garage sales, etc.
You could find some incredible pieces for much less compared to the cost
of buying new! Not only are you cutting down on your renovation costs,
but you can create a unique and desirable finished product that stands
out from competition. Score!
In-Law Suite Success
This property was originally a standard 3 bedroom family home with an unfinished basement. Carmen saw the potential in creating a finished in-law suite in the basement of this home. By doing this, the basement apartment can add enhanced value to the home by offering additional space for blended or extended families. On the other hand, the basement apartment could also be rented out, and the rental income could be used to support the carrying costs of the entire house!
Are you looking for a particular property but are having trouble finding one available? Don’t be afraid to go door-to-door on the street you are looking to purchase. You might find an interested seller who is willing to do a private deal. This could allow you to purchase a property off-market, avoid potential bidding wars, save on fees, and score a great property, etc.