A property I looked at last week had termites (unknown extent) and the agent called me yesterday asking if I would be interested @ 50k below the asking price.
The house was rough, a 2 bed fibro cottage desperately needing a reno.
Agent tells me a builder is interested in the land, and wants to pay land value. I find it hard to believe someone would pay land value if they have to pay $30k or so to remove a house on the land.
What would be a realistic cost of gutting the house, fixing any termite damage, spraying, and refitting fibro. Obviously kitchen / bathroom / rewire / replumb is extra.
Demo might cost $10-15k. As for the fix-up, how long is a piece of string? First you will need to determine the extent of termite damage & whether it is old, recent or active. If the damage is extensive then it will be cheaper to pull down and start again.
You will need to ask yourself 'why is a developer interested in this site?' – does it have development potential ie subdivision, duplex/villas or just a single dwelling?
People do pay land value, if not more even if they have to demolish the existing residence. Why, location, scaresity etc. Is it in a built up area? Does it have views? Is it convenient to services? All reasons to pay above the odds when a redeveloped site will generate a better return.
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