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House Reno Proposal

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  1. #1
    Join Date
    Dec 2007

    Default House Reno Proposal

    Hi I am in a tricky situation and am sure there would be someone out there that would have been throught it before.

    My wife and I and 1 yr old son are renting a house at the moment, my father in law has showed us this property that is owned by a friend of his.

    The proposal is that she is kicking the tenants out and has asked us if we would like to move in, only problem is the place is in a mess, mould throughout the house, cielings, walls bathroom, kitchen is in a mess, painitng needed both inside and out, just a good cleanup and some of the timber framing in the windows need replacing. She has told me that I can do work on the place and it will come off the rent, is this a wise move or should I ask for cash, anyone had problems with this,I am really keen as I can see a lot of work there but its the fact of living in the messs while working on the property.

    She has said that she was just going to repaint over the mould? should the gib just be pulled down?

    I am super keen but some good advice would help me make my mind up.


  2. #2
    Join Date
    May 2008
    Eagle Heights Qld


    It all depends on the people you are dealing with and your own attitude. I did excactly what youre planning to do about 25 years ago in Germany. We did end up in court and I won so he had to pay the court costs as well and I didnt have to pay any rent for nearly 2 years.
    I would sit down and do the whole deal in writing. Including all the numbers and most importantly what you think you should get paid per hr.
    If I was doing it again I would rather pay the standard rent and send the owner a bill from time to time so everybody knows whats going on.
    You could even quote each job and get the ok before starting.
    I wish you luck and try to use your head more than your heart.

  3. #3
    In with the new namtrak's Avatar
    Join Date
    May 2001


    Run a mile.

    The only way to do it, would be to pay full rent and charge her by the job accordingly. If she is looking at painting over the mould then already she is looking at ways to save money (which is deductible anyway) - sounds like a court case waiting to happen.

    Look at this way, say the rent is $200 per week, and she offers you a discount of $50 per week. Then as a labourer that would be 2 hours a week, as a tradie 1 hour week - do you think she would be happy if you only put in 2 hours a week on her house?

  4. #4
    Senior Member
    Join Date
    May 2007
    Cronulla, NSW


    I would not be paying full rent while having the discomfort and inconvenience of living in a demo site. I assume the rent AFTER the reno's were finished, however, would be much higher than possible at present so you might also try to consider building in a bit of rent relief later on so your work does not price you out of your home!

    While cautious, if you were keen to proceed, I suggest you negotiate a much lower rent for a specified period (6 mths/12mths?) during which time you agree to live in the current sub standard conditions while also renovating to a proposed program of works. This would be on the understanding that at the conclusion of the specified period both parties agree to renegotiate the next period and work to be completed....or to walk away without any penalty.

    I don't know what the tax arrangements are for properties in NZ but presumably the lower the rent received the less the tax to be paid, so there is some benefit to the owner in NOT getting the full rent while the reno's are being undertaken.

    Could get complicated and nasty real quick if either side has unrealistic expectations or plays silly buggers so it will really depend upon the bona fides and personalities involved if it is going to work out as a win-win....

  5. #5
    DNL is offline
    Senior Member
    Join Date
    Aug 2007


    Put it this way, I think there will be limited gain for you in this situation. not only do you live in a work site with the inconvenience, you get to pay for this privilege and then work you ass off to get a better house, pay higher rent, and reap no capital gain!

    Time is money! Cost the reno - then deduct this from the rent and have the owner pay you the balance. Even at $400 per week rent this is $20,800 per year - how much for the repairs, labour, supplies - that's a crap wage f in my book but a good deal for the owner, who benefits from tax benefit for income and tax benefit for repairs while the property is earning an income.

    While this may be cynical, the fact the owner wants to paint over the mould may indicate her desire for quick fixes at cheapest price with no regard for the output. Why don't you offer to buy the house and do it up for yourself? There is only one party benefiting here - and that's not you.

    Bottom line, irrespective what we all think, do the figures and if you think you are getting a good deal, then go for it. Be prepared for lots of angst though, shortcuts and bodgeys.


  6. #6
    Join Date
    Apr 2008


    Renovating is painful hard work. Only do it on a place you own and will receive the benefits of.

  7. #7
    Golden Member GraemeCook's Avatar
    Join Date
    Apr 2006


    Rotten timber and mold suggest that parts of the house are waterlogged - damp, cold and miserable to live in in winter. Would you want to live in these conditions??

    It can be tricky and sometimes expensive to identify how damp is getting into a house and then remedying the problem. In Aus there are engineers specialising in this issue. Would your dads friend bear these costs?? Probably not - she sounds a cheepskate.

    Another approach would be to get a licensed valuer to do three professional rental valuations of the house:
    ** as it now is,
    ** as a construction site, and
    ** after full professional restoration.
    And then get a couple of quotes for a full professional restoration, specifically including elimination of dampness.

    This will open your eyes fully, and give you a sound basis for negotiation. I think the cheepskate will run faster than you should. And we haven't mentioned complicated issues like legal responsibility, insurance and subjective differences in expectations.

    Personally, if you want to do some renovations, then I think that you put a minimum deposit on a house and renovate your own property.

    Good luck, (but hope you don't need it)


  8. #8
    HELLO Make it work's Avatar
    Join Date
    Sep 2007
    Somewhere in Sydney


    I have heard of these arrangements working perfectly, the previous owner of my house told me he did this with a young fella when he bought this house as a deceased estate in the 70's, the deal was that the tennant get all the contents of the house and garage to do as he wished in return for cleaning up and painting the place. Eventually, the tennant sold off the stuff and did a good job.
    He eventually moved out leaving a clean and empty house for the landlord.

    As Graeme said though, damp has a cause and if not addressed could cause health issues.

    Do it if you can come to an agreement with the landlady and above all have it documented clearly enough to not have any dispute over the outcome.

    All the best, if you do it.

    Alan M

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