All the best with it @s9nny! Put some progress pics up when you have the house underway we all like to watch :).

Jamie Moore wrote:

Rillanon wrote:

Our bank has started playing hardball with our application so there is a chance it wont go through after all but at least I have learnt something if it doesn’t pan out.

I’m biased – but I’d give the DIY a miss (going direct to the bank) and get a decent investment focused broker on board. Shouldn’t cost you anything – and should ensure there’s no hiccups.
Cheers
Jamie

I agree. Good broker wins when thing get messy every time. Those replying to you on this forum and this thread are some well above average ones from direct experience.

I agree with Terry bit risky – plus I would put the money into your build as soon as you can, it is only a few months away now then once build is done refinance the house hopefully some equity in it, this is all tax deductible if then used for investment properties.

Corey Batt wrote:

If you do substantial enough renovations, it can be as soon as 1 month – however this would mean needing to replace kitchens, bathrooms and full cosmetic reno.
In reality the valuer will note nominal increases after 3 months, but the biggest bang for buck will be achieved by waiting 6 months where the recent sale will fall off the radar and the value will 100% be based on the recent sales in the area.

Yeah nice thanks for confirming @cjaysa – 6 months seems to fit a nice sweet spot, with banks being happy, new comparables arriving to support a better price maxing the potential equity pull, and even human limits, for some folk anyway where one has a rush of energy to research and buy, then reno, then u need a break for a few months. Then a month to refinance, then regroup, then go again. It can mean 2 good ip’s a year, without destroying yourself, and without needing huge funds as the deposit is recycling. Some go faster but its good to avoid silly risks or burnout too.

Gday @gabsy welcome. Lots to learn in the forums so keep up the good research work.

My short answer would be yes. The long answer is it depends. It is actually more about resale than rent, but it applies to both. If its cheap enough for you to be able to discount the rent you will still get a tenant, but it is likely to be a lower socioeconomic tenant needing the 4th bed (ie family with kids and low income) if the investment works under those terms, go for it, but to be considered a quality 4 bedder in any good area and get top dollar rent and top dollar resale (no idea where you are talking about btw that would help) you need 2nd bathroom. It can be built later though, no need for straight away. If you have a floor plan put it up or email me we can see if another set of eyes can solve it.

Matt

Ah @benny I just sent you msg before reading this, so it was that thread! Sorry to be a pest but I thought it was worth asking the question. All the best with explorations on the options.

Hi @ren16 – great set of questions. I have done the reno thing and the build thing. My thoughts below:
1 – You can leap frog a reno without selling. Correct you pay more stamp duty at the front but no cg tax if you just refinance the equity out. It is how I bought my first 3 in a smidge over a yr.
2 – Building is great – but you NEED to have extra money. It is super stressful and takes long time and extra costs have a habit of arising. The first build I did I have over 100k deposit and spare funds and I spent the lot. No way would I suggest it for newby with only a small deposit unless in building game or with generous family who can help along in emergencies.
3 – If build and sell you will pay MORE tax as GST is applicable to new dwellings. ATO will also target you as a developer if you repeat a few times and want income tax not 50% reduced cgt.

Personally the cheap buy reno hold model is the preferred for starting with minimal funds. I agree with @benny‘s post above and Corey had a good one recently too.

Hi @markae welcome to the forum!

MarkAE wrote:

Hi All,
I’m a long time lurker, and I have missed a lot of opportunities in the past due to lack of confidence.But I was hoping you could let me know your thoughts on some research on where to buy, there is so much information,

Great honesty – but don’t beat yourself up. We all can look back and see missed opportunities but the key is to make a decision to act now and try to get good info to support your choices moving forward. The forums are a great place for that. You are right there is a lot of info out there – the key is to consume enough so you can see clearly but not to think you have to read everything ever written or you just end up back at analysis paralysis – which can also keep you from taking action. Balance is in there somewhere.

MarkAE wrote:

Objective – Capital growth in a property(s) for a total of around $500K to $600K for at least 10 years to help 3 kids with education and a house deposit.I’d use equity in my own house and aim to rent for as best as possible to balance growth with yield.

That is a sensible objective – and should be achievable long as you get the macro (major market cycle) and micro (property selection and due diligence) roughly right. I could definitely consider trying for more than 1 property if you can to spread the risk and access different capital growth drivers.

MarkAE wrote:

Locations – I have 3 locations in mind, each with what I think are pros and cons.
Sydney – Around Quakers Hill, Erskine Park. I know with rapid recent growth that future growth will probably be slow, but with inner suburbs so expensive I would assume the outer suburbs would be more affordable and in more demand. I live in Sydney so researching would be easier.Brisbane area – I don’t know QLD very well, but I have seen some posts around Brisbane suburbs not far from the city. From your posts it looks like Brisbane has not had the high growth that other cities have and there may be better growth here to come.Wollongong – This looks to be a popular area with a University and not too far from Sydney, so more people may head South to more affordable houses.
I may end up using a buying agent for some of these areas, as I have no experience or knowledge.I have been quoted some big fees to find a house, so I’d rather do as much as possible myself.
Thank you in advance for any advice or even some tips on what to look for such as rental vacancies etc.
– Mark

On locations – any of these (might) work, but I offer the following thoughts. Sydney is widely recognised as being at the late stages of a fairly major price cycle. As such you may see cap growth rates below the recent norm. If you are still mad keen on Sydney, don’t let me put you off, there are plenty of good BA’s and locations to consider. Western Sydney whilst cheaper than Eastern has also had huge growth and is pulling back now in certain areas due to speculation by greedy investors. If buying in Sydney I would target high owner occ percentage suburbs to avoid negative equity.

Brisbane/Gold Coast/Tweed – Yes I believe at the correct point in a major cycle after not much action for nearly 7 yrs. Inner Bris has grown though so be careful what you choose. Freestanding homes in the best areas you can afford close to CBD should do well. If units/townhouse then stick with older, smaller blocks, close to great infrastructure, avoid highrise than can be easily duplicated.

Wgong – My personal view is that much of Wgong is only half way through current cycle. Northern suburbs perhaps a bit more, southern a bit less. I am indeed seeing lots of folks moving out of Sydney for lifestyle, and increasingly it is not just retirees but young families who are in mobile service jobs (computer programmers, tradesmen etc). The ripple is well and truly started, to get property selection right is a bit tricky as there are so many options.

It really depends on what you want to achieve, and how active you are prepared to get. Many of my recent clients have been targeting older homes on large blocks so have future dual occupancy/small unit development options in the future, they may not see themselves as developers yet but it is nice to have the option to manufacture more equity if you want to. Also the land component is what really drives growth so having an extra site in a block can mean up to double cg rates in certain circumstances.

As always, keep reading, do your research and you will improve.

All the best!
Matt

Great post @planning. In our local one of the biggest hurdles is drainage. Council are not favourable to charged systems or pump outs so need the easement through neighbouring land or slope straight to street to make it work. And bushfire overlay…don’t get me started on bushfire.

Ryan_vs wrote:

Hi Azalia, just a thought, if you renovated NOW before the tenant moves in you will be able to claim depreciation on those renovations, likely improving your cash flow during the period you own the property. As Benny mentioned, you would also likely benefit from higher rent.The timing may not be right for you, but it may be something to consider if it can be done.

agreed this will be preferable if holding for medium to longer term, but if the goal is a 1yr turnaround with reno for maximum resale I would say putting a tenant in takes the “gloss” off the renovation and makes it less appealing at sale time. If holding for longer for sure do the work sooner and improve rent and tax.