I’m looking to buy a fibro house for an investment, and I have no experience in fibro/weatherboard. Tried to do a search in the forums but it didn’t work.
Value for money-are they cheaper to buy than brick? Or will it still boil down to quality/presentation?
What are the advantages and disadvantages? My dad has strongly advised against it, so I may be in deep trouble if I go ahead [cap]
What’s the difference between an Architect pre-purchase inspection and a regular building inspection?
If I am interested in purchasing, what order of events do I do – get a building and termite inspection first, then put in an offer? Or are they a condition of the offer? Do I do a building inspection first so that I know whether there’s any structural work to be done, and put an offer in accordingly?
Thank you for any advise on fibro houses!
ok depending on what state your in will depend on the order of events regarding contracts etc: In Qld the contract is subject to building and pest inspection and finance provided you put that in your offer which will be in most cases on a contract. I have my own form on which I make a formal written offer and fax that signed and dated to the real estate agent handling the sale. They then have it in writing and can discus it with the vendor prior to going to contract.
Always make sure you have 14 days building and pest and 21 days finance although over christmas i would ask to extend these timeframes by seven days using the holidays as the reason and explain this to the agent. I also personally settle 45 days minimum but offer 60 to start. If they want a quicker settlement it gives a great excuse to knock another $5k off your offer!
Stuart Milne
You mention for investment purposes so I’m not sure you’re buying it to live in? If you are the two important things for you is to have a low mortgage and a property that is in the best location to assure you of capital growth. You have to like the property to some extent if you plan to live there a long time ….be it brick, fibro…..in the long term given it’s a growth location then it’s the land that becomes the most valuable.
If you’re buying it purely for investment purposes then I’m assuming you’re going to take out a mortgage on an interest only basis. The ideal is to have a high rental yield on the property that not only pays the mortgage but gives you an extra income. This is very rare these days so the best you can probably do is get a property that returns say 5% (ie cost of property 300k with an annual rental return of 15k meaning you pay out of your pocket the extra for the mortgage ie 8% loan interest is 24k less 15k rent = 9k loss plus the rates etc….all tax deductable for a total of 12k). So you might have a tax deduction from your normal income of about 12k that reduces the tax you have to pay. Some people focus on getting a lot of high rental return investments and don’t worry about the capital growth. The high yield may pay for the total mortgage payments but if your 300k property is still only worth 300k after 10 years and you still owe it all then what has been the point of this investment unless of course the rental returns after 10 years may be more than the cost of the mortgage. Still painful though as you would have to gather a lot of these properties to make it worthwhile however your debt could accumulate to levels of danger and of course you have all the pain and drama of managing so many rental properties. Go instead for fewer but good properties even if the mortgage level is a bit of a task. My advice is whatever property you buy make sure its in a location that is bound to experience capital growth……and this doesn’t mean just a nice place. It has to have potential for employment and business growth to attract people to the area. Sorry this is longer than I’d planned so I’ll now get off my soap box. Good luck and good on you for getting started.
CarpeI don’t like fibro myself but it all depends on what your goal is with this investment. If you are buying it because you know it has a high rental return respective to the amount borrowed then it at least gets you into the market and does not burden you too much. It will be a better investment of course if the location of the property is such that it will return a definite capital growth. Hence its location is very important for the future ie for redevelopment into a better home or has the potential for unit development if its a large block. So in a nutshell
Oops ignore the last para of my previous shorter version and forgot to delete it…..I abandoned the shorter version to give you a bigger picture
Carpe (it pays to preview submissions!)
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