Walking The Talk
The Talk Mortgage educator and property owner Keelan Clark certainly practises what he preaches as he starts his investment portfolio. Joanna Mathers writes
1 February 2022
Keelan Clark is just beginning his property investment journey. Formerly from Norfolk Island, where he owned a property with his siblings, he works for mortgage and insurance consultancy firm Finax as an educator. And he’s just completed his first renovation, on a property in the Auckland suburb of Favona, and is now planning his next move.
Clark was looking for a property where he could put into practice the knowledge he gained through working with mentor Lucia Xiao.
The property he discovered in Favona was rundown, but had good bones, and room to expand. It was owner-occupied, but in need of a fair amount of work. At 615 square metres, it also had space for an extra dwelling; a gold-standard means to adding value in a city focussed on intensification.
The house had a leaking roof, a leaky hot water cylinder, and other interesting quirks. “The owners had installed lights in the shape of a heart in one of the rooms,” says Clark.
“They had been removed and there was the filler which had created a heart shape.”
The house wasn’t up to building code, and it certainly didn’t meet rental standards. Dogs had dug potholes in the backyard, which all needed to be filled.
He would go on to secure the property in June last year, at a cost of $800,000 — a steal in the red-hot Auckland market. The aim was to buy-renovate-hold — a policy that Finax has in place for all their property investments.
The L-shaped 1970s’ weatherboard property had three bedrooms. There were a lot of unusual design elements that wasted space; two sets of doors to one deck, for example.
“As each door needed room for people getting in and out, this space was not being used effectively,” says Clark.
By removing these two doors enough space was created for an extra bedroom, adding value simply and effectively.
None of the changes that needed to be made required consent, but they made a huge difference. The existing kitchen was poky and dark, with an oven that didn’t work. It was accessible via two entrances, and needed to be gutted. One of the entrances was sealed off, and the kitchen reconfigurated, with a new door added and transformed into an L-shaped configuration.
Keelan Clark scored a rare $800k bargain in Favona for his first reno project.
The benchtop is often the focal point of a kitchen, so invest in the best your budget can afford for maximum appeal. Laminate or engineered stone are two good options for affordability, quality and style. If redesigning, ensure there’s enough bench space to spread out when prepping, cooking and placing appliances.
Kitchen splashbacks are one of the easiest ways to add appeal. There’s plenty of material and colour options, they’re affordable to install and require minimal maintenance. For your tenant or future owner, they add a premium feel while also functioning to prevent grease and grime build-up in high-use areas.
While outdated cabinets detract from visual appeal, they also represent an outdated method of storage for key things like plates, cups, cookware, containers and utensils. Consider the convenience of finding an item, and if your cabinets are too high or too deep to see into, it might be time to update. If that’s outside the budget you could consider partially upgrading your lower cabinets into large draws. Lastly, if your cabinets have good bones you can always opt to refresh the top coat to match the visual style of your other improvements.
Ovens, Cooktops, Rangehood
The oven, cooktop or rangehood is one of the easiest ways to gauge the age of a kitchen, and potentially impress or deter potential tenants or buyers. You can boost kitchen appeal in a big way by installing modern and effective hardware. Keep in mind the functionality and maintenance of ceramic, induction or gas, and always plan this upgrade in accordance with your benchtops, splashback and cabinetry.
For a seamless kitchen renovation that adds appeal for prospective tenants and buyers, start with a budget, make your decisions based on what you can afford, and choose the upgrades that will have the most impact. Builderscrack.co.nz connects you with the right tradespeople to achieve an amazing outcome on your kitchen project —no matter what your plans.
The bathroom was ugly and old, with a water-damaged floor. The walls were OK, so they were kept.
The old shower was removed, a new shower and vanity installed, and custom made cabinetry replaced the tired, old woodwork.
All carpet was replaced, and the house was repainted in Resene White. The addition of a new bedroom, the new paint job, flooring, kitchen and bathroom instantly added rental value, and attracted a wider pool of interested tenants.
The pre-renovation rental estimate was between $580-$610 a week. The renovation cost around $60,000 and added nearly $100 a week in rent (if the lower figure was taken). It is now rented at $670 a week.
Unfortunately, Covid slowed the process down significantly, but the renovation was able to be done in five weeks. The new tenants moved in on New Year’s Eve and love their new home. Now it’s time for the second stage of the plan — adding a dwelling. Clark is looking at adding either one large or two small properties, but he’s leaning towards the former as he doesn’t want the homes to feel too crammed.
‘I run a first home buyers’ course that helps people who don’t know how to buy a property gain the knowledge they need to succeed’ - Keelan Clark
“For a property of around 100 square metres, we would be looking at a build cost of between $300,000 and $350,000,” he says.
He’s currently working through costs with a building company. Again, this will be a renovation-and-hold, and he’s expecting to get between $670-$700 a week rent for the completed home if he decides on a four-bedroom option.
Value Of Owning Property
“Because there is already a house on the property, the grounds are all prepared for a new dwelling, so it makes the process much quicker,” Clark says. He has been lucky enough to have parents who know the value of owning property. They “pushed us” (he and his siblings) into buying a home to share when they were young.
“They worked in banking and really pushed us into property,” he says. That property was rented out for nearly six years and the tenants loved it so much they went on to buy it. Clark studied business in New Zealand, which provides him with a solid foundation when it comes to the all-important figures that underpin successful investment. He is passionate about educating people who are unaware of the nuts and bolts of property.
“I run a first home buyers’ course that helps people who don’t know how to buy a property gain the knowledge they need to succeed,” he says. And the success of his first renovation venture proves he’s walking the talk.