I live in Mackay, have 3 properties here, plus also currently building our new PPOR.

I have a look at the property guides/windows, and ring an agent probably once a month if I see something that catches my eye, but at the moment, many properties are still seeking inflated prices. 

Capital growth over the next 5 years looks promising at the moment though, with the mines steadily starting to spend again and (hopefully) another boom around the corner.  I think 10 yrs is a little hard to predict in this area.

Areas to watch at the moment is probably Ooralea (close to Industrial Hub of Paget) and Mackay City/East Mackay (for increasing development opportunities), and for steady growth to a lesser extent probably West Mackay. 

Rents have flattened out over the last 12 months, but again, with the mining drive, I think rents will start to increase steadily for the next couple of years.

Where are you building?

I own and manage a protective coatings business.  Our bread and butter work is abrasive blasting and painting, but we also work in a couple of niche areas like industrial tiling, polyurethane spraying (Rhino Linings Industrial Dealer), scaffolding, epoxy flooring, and other protective coatings, plus we do small amounts of fitting and boilermaking.  We do both site work, and I have 3 sets of sheds (all in the same street would you believe) where we have an abrasive blast booth, paint booth, tiling sheds, office and storage

Its actually getting to be a medium scale operation, and is very much family run.  My wife is the Workshop Leading hand, My brother heads the Abrasive Blasting Division, my sister in law is the Financial Controller and I have 2 Site Supervisors, plus 6 full timers and a dozen casuals.  I oversee the whole operation, do all the estimation and organisation of jobs.  We are very busy, all of the time.  We have some very good blue chip clients; Xstrata, Sedgman, Macarthur Coal; Thiess; DBCT, Multotec Australia and many good ongoing contracts with engineering companies.

It keeps us busy!  Hard at the start, but we have the finger on the pulse now.  I try not to work these days too much, but I still do the odd day here and there where needed, and still dont mind doing the hard yards (jackhammering old industrial tiles off, scaffolding and polyspraying are jobs only for the hardcore!).

Ive joined this forum pretty much because I need some type of outlet.  Over the past 4 years I have become so obsessed with my business, that many of my (neglected) friends have moved on and I need to talk to like minded people about things I am interested in – like PI!!! 

If I read this right?

You are going to try and renovate a property that you have bought for 30% under unimproved value of the land determined by council?  And spend $70k+ on renovations, plus 1 week labour from yourself (50hrs x $50/hr = $2500), plus 10-20% contingency = $100k?

You would be better off levering off the equity already from the land valuation, and using the borrowing capacity that you obiously have to renovate – to knock the house down and build a new, small similar style home that wouldnt be a standout in the street.

A renovation like this, as mentioned above, would be a full scale operation and would require probably 10 weeks work.  I say this as you cannot have 5+ trades working at the same time – there is a particular order they must come in and work at, with several trades required for a second visit after other trades have done thier bit.  If you have not much experience in organisation of renovation/building projects you will have some troubles getting trades to come back to do the last small fiddly bits.

Some of your costs mentioed above seem reasonable, but some may be a little off the mark.  For example – bathroom/kitchen renovations can blow out extremely as you may discover costly plumbing issues that are sight unseen.  Restumping can also have its pitfalls as they generally have to re-engineer footings to comply with standards today.  Also electricians, depending on who you get might not even touch your property if the current wiring is poor, and will demand to do a whole house rewire as they have to put thier name against it as being completely safe, even vouching for past trade practices on the house.

I know its exciting to find a 'bargain', but sometimes that could cost you more in the long run.  Ask yourself is it worth the stress to make this work when there may be a more appropriate property out there for your skills?  How much do you think you stand to make (% wise) on immidiate capital growth so you can move onto the next purchase?

Just my 2c
pinkboy

I know the exact company you are talking about.  I went to thier 'seminar' in my hometown.  Shifty mob.  They invited me for a private consultation with thier 'finance guru' and showed me around all thier properties.  I went only for a bit of fun and some time out from my business.  I say they are shifty as when they were punching in my numbers of property values, LOC's, other current assets etc – they were fudging around with 'predicted interest rate rises' so that my available situation was about $20,000 more than properties thay had on offer.  Perfect for them, and they were calling out across the room that 'Mr. xxxxx'  would qualify for 'x property' in front of the other few couples in the 'qualified' field.  They were trying hard for me to purchase the last property in 'Stage X' of that development.

If an offer seems to good to be true…..you know the rest….

And if they are so good at predicting the next 'capital gain boom', why then does that stop you from buying some land in that particular area, getting your own builder, and pocketing the 'holding cost', plus the advantage of construction loans etc.

The part where you say 'the Government wants to help you save for your retirement' – an ITVW is hardly a secret.

You have been given some good advice above.