Hi every one just wanting some feed back on one of my propertys, Here goes, Over two years ago I bought a two bed room fibro house for $83k, spent $10k on reno’s and now it is worth $170k. The land size is 809m2 and is permitted to have a duplex built on it (with the removal of the old fibro) I can’t decide whether to sell and take a profit apptox $74k so I can be cashed up for further property purchase’s or borrow approx $240-$250k and build a duplex on the site. The area is not the best part of Cairns but is still OK. What should I do People?[baaa]
Think & Grow Rich!
What do the figures tell you? Make sure you include the holding cost and interest for the construction period.
will you sell them then or rent them out?
Wha are your goals?
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.85%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Simon, The main idea I have with property is to keep them for long term and rent.[juggle]
Think & Grow Rich!
Originally posted by johngee:Hi Simon, The main idea I have with property is to keep them for long term and rent.[juggle]
Hi John
The “buy and hold” strategy is the only one most PI’s know. I held to that philosophy for the past 18 years, and during that time I found I was the VICTIM OF MARKET FORCES.
I suggest you need to do further reading, and attend some seminars from the few reputable guru’s people on this forum respect.
When you go BEYOND the “buy and hold” strategy, that’s when you become a PROACTIVE property investor, in charge of your own destiny, INDEPENDENTLY OF THE WHIMS AND VAGUERIES OF THE MARKET.
Better to be active/proactive rather than a passive victim.
Summary: do more and more and more reading
Cheers
GregHi johngee,
I would look at what your goals, long term strategy is? eg, are you looking to create cashflow …or are you looking for the capital gains? If your looking for capital gains then selling up and re-investing the money into another more productive investment maybe the way to go…
In regards to the block being permitted for a duplex – what permit’s the block to be a duplex block? Is it purely based on the size and zoning of the block? (just curious:)
cheers
wayne
Wayne Leech
*Below are links to my websites – any feedback, comments would be appreciated:)
http://www.landsearcher.com.au – List your land for FREE (Private sellers only)
http://www.homesearcher.com.au – List your property for FREE (Private sellers only)Land size.
Think & Grow Rich!
I’d build the duplexes personally. Get rid of the fibro and put up something that will add value to the land.
Hi Johngee,
There’s always the middle option… if you’re in no immediate rush to cash-out, organise planning and building approvals for the duplex, and sell as ready-to-build.
There is slightly less risk than funding the building process, but potential for increased profit.
kavan applegate
architectHi kavan,
I agree, developers big or small have made a fortune on simply placing a DA/BA on there site’s.
Either one day to build or sell off, I’m finding there selling the sites approved more often than actually building.goodluck to them.
Cheers
Joseph Scarcella
prime real estate agents
property management specialists E: [email protected]the trouble is the people achieving the DA’s often have little understanding of the expense and effort it takes to develop a site and want to take a slice of the developers profit up front. good luck to those that can get away with it, but it means a good proportion of sites advertised as ‘development sites’ are not economic to develop at those prices
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
this is a fairly similar sitiuation to what I am doing in Melbourne. My partner and I purchased a property of a 750sqm block with an 1950 wb house existing at the front. We renovated the house and am currently in the process of subdividing the sell backyard with plans and permits. We will keep the existing house as a +ve cash flow property (it will be +ve after the sale of the backyard land).
We have choosen the sell the backyard as it enables us to keep up the momentum / velocity in which our money is working. ie. if we did the development we would have 200k – 250k tied up for 6 to 12 mths development, in which time I could have purchased, subdivided and sold two more sites.The plan is to continue to do this until our capital base is large enough with enough +ve c/f property before we start developing the properties ourselves. Currently we are not comfortable developing without firstly having a few smaller wins through subdivision under our belt.
Jman
Buy Problems… Sell SolutionsHi John.
Personally i would sell, firstly because you have owned the property for over a year you are entitled to the 50% CGT reduction. Unless it is your ppor, then you pay zip.
Then i would divide the profit into say three equal deposits and buy three smaller +ve geared properties. Therefore boosting your net worth from about 170K to (rough guess) 450K and now you have a passive income from three seperate properties without all the hassle of re-developing and building yourself two (more than likely) -ve geared properties. Plus any capital gain accumulating on three properties rather than two.
Anyway thats just my opinion.
Good luck.Success is 1% inspiration and 99% perspiration.
Hi Johnjee, i’d build
Your origional purchase +++ say $100k = $50k per site.
A duplex at $240k inc. landscaping = $120k each + land = $170k say $180,000.00 strata/legals $10k = $190k = cost.
1. How much can u rent them 4 when finished +ve
2. 100% tax deductions now apply
3. U could sell one and put the profit against the remaining one reducing your exposure under your cost of $190k.
4. How much are they worth when u sell.
I have just completed two duplexes in Merton drive in Coomera on the Gold Coast which will sell 4 $295k each cost me nett $220k
I think of my origional buying price, you can’t replace land … land appreciates while buildings appreciate
I’ve been reading this thread and found it really interesting as my stratage i’m thinking of using is buying blocks large enought to subdevide and do something with them like 1.sell the rear block to make frount cash flow + 2. demolish the house sell two blocks or 3. build two houses sell them.. Do u mind if i was what your opions on the ideas are
Regards
Daveit comes to how handy you are, and how many trade people you know. Don’t just look at the profit later ’cause all this profit can end up in the hands of the builder or someone else if you are inexperienced. If for doing nothing you already got 74K profit, I would sell and buy 2 or 3 properties rather than gamble for more and get less specially if they are not in the best location of the city, let someone else take that risk.
cheers
Gio
Hi John,
If I were in your situation (similar, although I’m situated in country Vic) I would demolish the fibro for (what I’ve been told, estimated) $8K and build a small apartment block of public housing. [council approved]
If the property is located in a ‘rough’ area of Cairns, I’d say that’s perfect for an apartment block.
Cheap housing is exactly what Cairns needs instead of so many caravan parks with no surveilence.However, I am a young amateur, this is only my opinion of your situation[blink]
Regards,
Beth MacLeod
[email protected]I guess it all comes down to experience and what alternatives you feel comfortable with. I am considering a similar thing witha property of mine on a 739sqm block.
My only concern with biulding on or either selling the back of the block after subdivided and approved is that 1) Capital outlay for no immediate return, having to support the project throug 6-12months 2)what would this do to your chances of renting or maintaining a tenant when they realise theres going to be constrution at their back door.
Regards,
Jarrad
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