Just relised your staying with parents how about just pump your loan  with as much finds as possible and then you I've back in  you will be allot more comfortable 

Hi devil 

How much capital gains tax you will pay ,will depend On what price you bought the home for what price you sold the home and how many years you have had the ip 

Like the guys said its one account just offsetting another 

if the property drops and you use the equity  that means your overall net position is still less 

Hi

I used to sell a number of homes for a BANK (cant mention who) in the Werribee area (Melbourne), Most banks will elect a local agent or vendor advocate to sell the home on their behalf.

Just be aware that allot of the homes that are controlled by the bank usually achieve a high price because of the amount of interest they get.

EG: This year a block of land (600sqm)  with a home that was barley standing was on the market by the bank at $200,000 with a rundown home. I went to the auction to have a look the auction was only 5 houses down, at the end of the auction the land was sold for 310,000 – This guy probably paid 60K more then he should of.

Hi Jewel,

I have only done three RENO deals and let me tell you I still get uncomfortable at times, To me this is very important, I usually perform better when I am nervous or uncomfortable.

With costing the best way to learn is to do it on paper,  Look at a few houses on the market and take some photos of your own.

Once you print your photos, try to vision what you think you would improve if you bought the house, Then do your research,

I think being conservative is great,  With budgeting you can never be 100% right or accurate,

I am not a trades person so I also found it very difficult to estimate at the start but one thing I would like to share is this….

Before you buy anything, try and make some connections just in case you need help….

What part of Melbourne you are looking in???

Hi Jewel,

Good luck with your venture and if you need anything were all here to help.

My wife and I (I was working in real estate at the time) did our first RENO project last year, We settled in our IP on JAN 2011 and we sold the property in JULY 2011.

Our net profit was 20K after all expenses, taxes, reno, agent fees, settlement "etc".

The biggest lesson I learnt was this:

• Most of our net profit was generated from "not from increasing the value of the IP through RENO" but from the purchase price.

• The property was listed for 280K through an Genmen agent and i managed to by the property for 220K in the hoppers crossing area.

• Doing research on the property it was realistically worth 250K. We spent 10K Renos and we managed to increase the rent from 250 to 300 a week.

• At the start my wife and I did allot of the work, but their are some very good tradies out there who need like anyone else the extra cash, We bought our Kitchen from bunnings and a trades person I knew installed it for $300.00. We saved allot of time and  one  by out sourcing

Rather than spending money on RP data "etc" just go to opens in the local area, See how many people go to the open, compare each home, compare renovated homes to renovated homes. 

I live in deer park (Melbourne) and I go to a few opens every month just to keep an eye out on the market, One thing I have noticed in this area is this, just say I saw 10 houses in the area, 5 where renovated and 5 where original, the price difference between both types of homes was much of a mucheness, The reason was this; most people in the area are in the process of renovating their homes, so there are allot of homes on the market that have just been renovated but then on the other hand the houses that are not renovated are selling quick, houses in deer park usually sit on large blocks and the house usually sits in the middle, So what people are doing in the area is knocking them down and building three town houses instead.

Hi Nigel,

Great post!!!

I remember when I was working with a real estate firm in Werribee, I had allot of Buyers agents come in and try and find a deal for their client.

Some buyer advocates where very good but allot of the buyers I knew had very bad experiences.

The first thing I used to ask a buyer agent was this, Have you ever worked as a real estate agent before? Some would say Yes or some would say no, the ones that said no would automatically say, Why is this important?

I personally think that a good buyers agent is someone who has experience in selling a home on behalf of a vendor and also negotiating a deal with the buyer.

I also think allot of people these days do not have enough time to do their own research so if they are paying someone to do their job, pay someone who is not only good but the best in their field.

HMMM maybe I should get into this business, I just love negotiation