Posts Tagged‘house’

House Flipper: DIY Simulator 2018.

I haven’t spoken about it at all on this blog but I’m something of a DIYer. Whilst I had humble beginnings, fixing doors and replacing light fixtures, it soon graduated into a full on crusade culminating in my wife and I building a large workshop in our backyard. So when I stumbled across House Flipper, a game that essentially simulates what I’ve been doing IRL for the past couple years, I figured it’d be worth giving a try. The game is both strangely accurate in some respects whilst wildly off base in others which, honestly, isn’t out of line for games in this genre. Whilst it might not replace The Sims as the home building game of choice for many just yet it certainly does do a good job of emulating the painful yet rewarding experience that is renovating a home.

You play as a general contractor who’s looking to make a name (and fortune) for themself. You start off with humble beginnings, cleaning up trashed homes and doing minor repairs, but soon your skills graduate into full blown home renovation. You’ll be painting walls, laying flooring, replacing broken outlets and all sorts of other fun tasks that you’ll need to do to transform a run down hovel into a home. You’ll have to figure out the whims of your buyers and create the perfect homes for them so you can extract the maximum amount of profit from the houses you flip. One day you may even be able to upgrade your own place, doing away with your run down shack for something a little more fitting of someone of your stature.

House Flipper is a Unity based game that uses a lot of stock assets and so has that trademark “Unity Game” feel to it. There’s some noticeable performance issues with it however, most of which I think comes from the destructible wall simulation as it seems to get a whole lot worse when you’re swinging a sledge hammer. Still the amount of flexibility that the developers have put into it is commendable as you’re able to change pretty much anything you can see in the house. Probably most interesting is the fact that it also has full simulated night/day cycles, requiring you to turn on the lights if you want to continue renovating in the dark hours of the night. Honestly whilst it has the same trademark janky appearance that many of these simulator games has once you dig beneath the surface it’s actually quite impressive what they’ve managed to get done.

All the mechanics of the game are tasks that you’d be doing if you yourself were going to renovate a house IRL. The initial tutorial missions give you an insight into the various mechanics like cleaning, painting, tiling and adding/removing walls. You can keep doing those for quite a while if you want and it doesn’t take long for you to be making a decent amount of cash with each job. From there the next stage is flipping houses where you’ll spend time fixing up the place and then tailoring it to your buyer’s desires. Whilst you’re renovating a list of potential buyers shows up on the left hand side and they’ll comment on the changes you make. The one at the top is the person who will eventually buy the place and so it’s key to pay attention to what they’re saying. However many of the things you can do in renovating a house don’t mean anything to the potential buyers which, honestly, irks me to no end.

The initial missions are actually quite enjoyable as you have a fixed outcome you need to achieve before you can get paid. The devs have obviously had a great time setting up the various scenarios, like the college student party house where the tenants stole all the radiators, and completing all the tasks is a rather relaxing affair. You’ll quickly level up the various skills doing these missions as well and it quickly becomes obvious that not all of the upgrades are created equal. For instance the upgraded mop is far, far better than the increased cleaning speed and painting multiple walls at once is great only if you have the upgrade to not use paint on already painted surfaces. Once you’ve got that all mastered it’s time to flip some houses which, if you’re playing to the game’s mechanics, is actually boringly simple.

You see your potential buyers have in-built traits for things they want and things they don’t. As you go around fixing things up they’ll likely make a comment on what they like/hate and that can help you hone in on who you’d prefer to buy that particular property. However it gets weird really quickly as it’s not so much about what they lke but what they hate. For instance, in order to make one house attractive to the student I had to fill it with children’s toys to make sure that the other buyers wouldn’t like it. Similarly the only way I could figure out to discourage the old couple (who apparently likes multiple bedrooms but was just fine with a tiny house with only 1 room) was to leave empty paint cans around since they hate mess. Worse still the most time consuming things, like painting walls or replacing the siding on the house, seem to have absolutely no effect on what the buyers want. This leads to a weird game of cat and mouse where you try to figure out the right combination of dumb things to add in whilst ensuring you only pay attention to a select few items to renovate.

Of course in the end it doesn’t matter who buys the place (unless you’re going for achievements), the person at the top will pay the most and it seems that unless you really go wild with the renos you’ll always make some kind of profit. I’m sure there’s people out there who’ll enjoy doing up a place nicely just for the sake of it, heck I even did that a bit in the first place, but if you’re playing to the game’s core mechanics then there’s not really a lot of point. I’m sure the buyers AI will get tweaked at some stage to be a little more discerning as I really don’t want to have to play a game of “fill the house with things other buyers hate” every time I want to flip a place.

At the moment it I’d probably class this more as “interior decorator simulator” more than anything else. Whilst all the things you do here are most certainly realistic when it comes to home renos there are some omissions which make it fall short of a true renovation simulator. For instance you can’t seem to change the place where the plumbing runs for the sink, even though you can absolutely move the shower around as much as you want. Similarly the wiring for lights and switches seems to just be for whatever room they’re in which, IRL, isn’t always the case. It’d be great if they had something like a structural view which allowed you to see all the pipe and electrical runs in the walls and you had to contend with them when you were doing demolition. Maybe in a future update something like that will come.

House Flipper certainly isn’t for everyone but if you, like me, are one of the few who have feet in both the gamer and DIY camps then it’s definitely worth having a look at. Whilst it is unmistakably an indie Unity game that belies the huge amount of work that went into developing the simulation engine to support it. The core mechanics are solid and the initial jobs you take are a great way to get into it. The house auctions are a little too weird and unpredictable for my tastes and ultimately that’s what made me put the game down for now. However this is one of those games that I’m sure will mature over time and, if the devs open it up to Steam Workshop, there’d be an endlesly supply of new content for it going forward. If another trip to Bunnings isn’t in the budget then maybe a copy of House Flipper might be on the books.

Rating: 7.75/10

House Flipper is available on PC right now for $19.99. Total play time was 4 hours with 17% of the achievements unlocked.

Print Yourself a House.

Ever since I first saw a 3D printer I wondered how long it’d be before they’d start scaling up in size. Now I’m not talking about incremental size improvements that we see every so often (like with the new Makerbot Z18), no I was wondering when we’d get industrial scale 3D printers that could construct large structures. The steps between your run of the mill desktop 3D printer and something of that magnitude isn’t a simple matter of scaling up the various components as many of the assumptions made at that size simply don’t apply when you get into large scale construction. It seems that day has finally come as Suzhou Yingchuang Science and Trade Development Co has developed a 3D printer capable of creating full size houses:

Details the makeup of the material used, as well as its structural properties, aren’t currently forthcoming however the company behind them claims that it’s about 5 times as hard as traditional building materials. They’re apparently using a few of these 3D printed buildings as offices for some of their employees so you’d figure they’re somewhat habitable although I’m sure they’re in a much more finished state than the ones shown above. Still for a first generation product they seem pretty good and if the company’s claims hold up then they’d become an attractive way to provide low cost housing to a lot of people.

What I’d really be interested to see is how the cost and materials used compares to that of traditional construction. It’s a well known fact that building new housing is an incredibly inefficient process with a lot of materials wasted in during construction. Methods like this provide a great opportunity to reduce the amount of waste generated as there’s no excess material left over once construction has completed. Further refinement of the process could also ensure that post-construction work, like cabling and wiring, are also done in a much more efficient manner.

I’m interested to see how inventive they can get with this as there’s potentially a world of new housing designs out there to exploited using this new method. That will likely be a long time coming however as not everyone will have access to one of these things to fiddle around with but I’m sure just the possibility of a printer of this magnitude has a few people thinking about it already.

Affordability, Statistics and the Australian Housing Market.

Before I get into what could be a slightly ranty post about the Australian property market I feel it’s prudent to mention that I’m an owner-occupier, investor and would be regarded as being particularly well off when compared to the average Australian. Thus my views may be somewhat skewed by the fact that I have a vested interest in the property market. However I believe that there’s a lot of disinformation out there about housing prices and what constitutes “affordable” property, especially when the entire market is boiled down to single figures. What I intend to show you is that whilst Australian property is more than likely above fair value this does not preclude the average Australian family from owning their own home, nor are first home buyers priced completely out of the market.

There’s been a report circulating recently from NATSEM that says we’ll need a decade of flat housing prices in order for them to come back to affordable levels. This sparked quite the reaction in the media, strangely lacking any direct finger pointing that usually accompanies issues like this. There’s no question that the last decade has seen some extremely wild growth in the Australian property market and for years people have been predicting the ultimate downfall of the Australian housing market. The Global Financial Crisis was supposed to be the trigger that sent property prices tumbling but it had the opposite effect, with extremely low interest rates pulling many into the market and increasing demand significantly. Now that the pressure is back on with interest rates at their pre-GFC levels the question of affordable housing is a hot topic, but it’s not all bad news for those chasing the Australian dream.

For starters let’s dive into the (thankfully unbiased) figures from the NATSEM report. On the surface it looks bad for Australia with the median¹ house price being a whopping 7.3 times that of the median income, 50% higher than what it was back in 2001. However whilst I believe using the median as the measure is by far more intellectually honest than other measures it does hide some important information from the reader. Although the median Australian house price might be $417,000 that also means that 50% of all Australian houses are valued somewhere below that particular line. For first home buyers this means that they shouldn’t be shooting to buy a house at the median price since there is an ample amount of stock available at a much cheaper price bracket. The houses above the median then are usually more suited to those looking to upgrade and not those trying to break into the market.

For interest’s sake I’ve done some calculations based on some typical scenarios. The first is a median income earner attempting to buy a median house with a typical interest rate:

  • Income: $57,000 /year, $3,823.33 / month after tax.
  • Home loan: $396,150 ($417,000 house price, 5% deposit, 7.1% interest, principal and interest) =  $2,662.25 / month
  • Repayment as percentage of total income: 69.63%
In this situation I am in agreement with NATSEM that this is completely unaffordable. I believe that this is a pretty atypical situation however as a single person buying (or financing) a house should definitely not be shooting for a median property, opting instead for the lower end of the spectrum with smaller town houses or apartments. However a more typical scenario would be a young, childless couple (I’ll stick with median incomes) looking for their first home, shooting for the lower end so they can break into the market. Taking these factors into consideration we get:
  • Income: $114,000 /year, $7,646.66 / month after tax.
  • Home loan: $356,535 ($375,000 house price, 5% deposit, 7.1% interest, principal and interest) = $2,396.03 / month
  • Repayment as a percentage of total income: 31.33%
In this situation it’s starting to look a lot better with the percentage of total income spent on housing much closer to the 30% of total income that the banks usually use when determining loan size. The above scenario isn’t too far from the situation I was in when I purchased my first house back in 2007 and whilst it wasn’t the easiest thing in the world to do (it was helped a lot by renting out the spare rooms) it was definitely possible. This doesn’t disprove the point that Australian house prices are unaffordable for median, single income earners however but even in 2001 it would’ve been a struggle.

Since the media hasn’t played the blame game yet I thought I’d throw my hat into the ring on this one. Investors who are negative gearing would be an easy target with this one and they’re usually the first to get blame for high housing prices. However in Australia the vast majority of property, to the tune of 68.90%, is owner-occupied (I.E. people who own it live in it). The remaining 31.10% is investors but the vast majority of investors only own 2 properties, their home and another investment. It then seems infeasible for investors to be solely responsible for housing price gains when the vast majority of property is in the hands of owner-occupiers or one time investors. The price rises logically then come from the majority, but how are they doing so?

Simply put it’s people leveraging the equity in their own homes in order to upgrade to a bigger, better home whilst keeping the loan repayments at a similar level. The initial 2001 – 2004 boom meant that many had enough equity to upgrade and many did so over the years. Of course being rational actors they attempted to maximize their sale price in order to reduce the loan on the next property and this put an upward pressure on housing prices, both on the low (the one they were selling) and high (the one they were buying) end of the market. The interest rate scare of 2007-2008 put enough pressure on people to curtail this behaviour for a while, but the GFC dashed those high rates and the upgrades began again in earnest.

I’ve long been of the opinion that there will never be a house price crash, instead I foresee a long time of stagnant or small negative growth whilst wages catch up to bridge the affordability gap. The simple fact is that prices can only drop significantly if people are forced to sell and although many first home buyers who bought in during the lowest interest rates are feeling the pressure now they form only a small part of the market, not enough to trigger a price collapse and most will simply delay selling until conditions improve.

It is unfortunate that the Australian dream is out of reach for a median single income earner, but many factors point towards housing becoming more affordable for them in future. The government could do a much better job of incentivizing the construction of low cost housing as current market conditions favour bigger, higher cost houses. Additional land releases and incentives for desirable, low cost housing would also go a long way to putting a downward pressure on house prices. It’s not a problem that can be fixed overnight either and we’ll need long lasting reforms in order to keep housing affordable, lest the prices rise and the cycle start all over again.

¹The median in statistics refers to the value in which 50% of the total data set is above that value and 50% is below it. It’s much more resilient to use this figure when you have outliers on either side of the equation which in the case of Australian property and wage figures there are many. Using the average would then be less representative of the real world.

Buying Property: A Geek’s Perspective.

Buying a house is an experience of many varied emotions, from excitement to confusion to being overwhelmed and finally the ultimate reward of having a place to call your own. I’ve been through the whole process twice now and suffice to say I’ve had my share of trials and tribulations along the way. Today I’m going to walk you through a rough outline of the process (note that this will be Australian centric, sorry overseas readers!) so that those aspiring property owners looking for a bit more information on the process will hopefully come out feeling a bit more confident when they start looking for a place to call home.

First of all before you start looking at any houses you’re going to have to know what kind of budget you have to work with. At this early stage I’d highly recommend seeing a mortgage broker as they can look at your financial situation and find a loan that’s appropriate for you. They can also teach you how to build business credit, which can be useful to you in the long term should you be short on capital. I have personally used Aussie Home Loans as my brokering agent every time I’ve looked for a property and have never been recommended the same loan twice (nor any of Aussie Home Loans products either). There are of course dozens of firms around and none of them charge any fees so I’d wholeheartedly encourage you to talk to a few of them if you’re not completely happy with any one of them. At this point you can also get pre-approval for a loan, meaning the bank is ready to finance you and will make the whole buying process a lot faster than if you’d found a house then had to get finance.

With your finance sorted you can now go about looking for a place to call your own. In my experience this is a whole lot of fun for the first couple weeks as you get to see many great houses (and some not-so-great) but it can be exhausting if the process drags out over a long period of time. Whilst I said before you shouldn’t bother looking before you’ve got finance it can help to do a little market research in the months prior to fully committing to getting a house. This will let you know how the market is doing and which properties have been on sale for a while. A rule of thumb is that the longer a property has been on the market the more likely that the seller will be flexible regarding the price (although it could also mean the property is overpriced, in need of dire repairs or has something else preventing it from selling).

Once you’ve found a place that’s within your budget the next step will be to make an offer¹. This process is wholly dependant on the agent selling the property and can be as informal as a telephone call to the agency or could involve multiple forms in order to register your intent to buy the property. It’s at this point you can negotiate the price for the house if you so desire and it’s quite possible that the house will go for below or above the advertised price. Should someone else make another offer you will, most of the time, be notified by the agent should the offer be higher than yours. Strictly speaking agents are not meant to tell you how much other people are offering for the property but inevitably most do. Depending on the instructions given to the agent by the seller there might be predetermined sell point or they may leave the property open for offers until they’re satisfied with the price. Should you be lucky enough to place the accepted offer you’ll be contacted by the agent and will usually have to supply a $1000 deposit to confirm your intentions to buy the home (this is counted towards the asking price).

According to Think Conveyancing’s website, at this point its time to bring in the lawyers or a conveyancer, as part of the formal offer acceptance you will have to nominate one such agency to deal with the legal paperwork required by the sale. Just like if you were seeking the aid of an injury attorney in Orlando for example, you have to do your research. In my experience you will be better served by an actual lawyer rather than a conveyancer as they will be able to provide qualified legal advice in the event something should go wrong. They can also help with explaining some of the legalese and add provisions and protections into the sale contract should they be required.  Once you’ve nominated the agency the agent will send them the required paperwork and you’ll be required to sign a few things in order to get the process going. Soon after (usually before 10 business days) your and the selling party’s lawyers will then exchange contracts, allowing both sides to inspect them prior to agreeing to continue with the sale. Again at this point you’ll be required to sign the paperwork to say that you’re happy with the terms of the sale. At this point you have a financial interest in the property so it’s recommended to take out insurance on it at this point.

Once the paperwork is completed the next major event will be the settlement, the formalisation of the sale contract that both parties have agreed to. Before this happens however there are usually a few things that need to be sorted out. Probably the largest of tasks is the payment of stamp duty which has to be done either directly to the Revenue Office or through your lawyer’s trust account. There are also things like arranging financing for paying out rates or water bills (usually paid to your lawyers who hold it in trust for use at settlement) and having one last final inspection of the property to make sure you’re still happy with it. The bank will also send out a representative at this point to do an evaluation on the property to make sure the property isn’t worth substantially less than the loan they’re giving you. Once they have been completed (can be anywhere from 2 weeks to months, in my experience) then both party’s legal representatives convene to complete the sale. Shortly after this you should be contacted by the agent who will hand over the keys and you’re officially a home owner.

This scenario does not mention anything that might go wrong during this entire process. Should all things go well the time from accepted offer to moving in is usually around 4 weeks however this can easily balloon out should any part of the process be delayed. The most common problems are finance related, usually either delays in sending out appraisers or not releasing the funds for settlement. There can also be issues at settlement like unapproved structures or disclosure of required sale information (like if it’s a flood plain, for example). However if you have a good lawyer behind you most of these problems will be made clear to you and options presented for remediation.

So in a nutshell that’s what the process is for buying a house in Australia. I’m sure there are details I’ve missed or haven’t given enough attention to but if you were wondering what’s actually involved in securing property than this should give you a good insight into what’s required. It can seem daunting at first but realistically it’s really just a whole lot of talking, walking and sending money to people in the right places. If you have any questions about a particular part of the process feel free to ask in the comments below and I’ll do my best to ask.

¹I’m deliberately writing this from the perspective of buying a house through a negotiated price rather than at an auction. Buying a house at auction is an inherently more risky scenario due to emotional involvement and the removal of many buyer protections. The process before and after the auction is identical however.

The advice provided here within is general advice and should not be considered professional financial advice. It does not take into consideration your personal circumstances and can not be used in any financial decision process. No party should take action or refrain from action based solely on the content of this post or any other contained here on The Refined Geek. Please seek professional financial advice before proceeding with any investment.