hi, I am just starting and looking at this one below.
say if I bought it for $320k, put down 5% deposit ($16k), pay tax and duty $12k, then renovate it at $15k. another $5k interest if I have to hold it for 4 months. The total investment would be $368k (of which $16k deposit is recoverable).. I should be able to sell it off at $380k, agent fees expect around $10k.. means profit only $18k.. is this a good investment? Any other cost that I miss out?
By the looks of things, you would be making about 5% profit on the gross investment over a period of 6+ months – if you could find a way to lock in the profit, then maybe, otherwise I would say that $18k profit for the level of effort and risk may not be worth it for you. Not sure if it's my warped sense of money (open to comments here!). Don't forget, you may have to pay tax on the amount that you make as well, so depending on your taxable income, you could get a lot less than the $18k. If it was a buy and hold strategy, so you had some instant equity with great long term potential, but also the time to make things work if it does not go to plan, I would have a different opinion.
I notice it has been sold now, but the problem I See with what you are saying is the "i should be able to sell it off at $380K", unless you have a crystal ball, you just cant rely on that, and with the 18K profit there is enough ifs and but's to land you in the negatives. be careful.
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