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Glad you got an independent person to look at it – as much as I love my agents, their idea of water glimpses is standing on your tippy toes in the 'lavatory' and peeping out a very small window – yes, it is a 'glimpse of the water'…..but…..
One of the secrets of successful renovations is 'disparity of prices' in an area – you don't want to be the price leader, rather the follower – so with others avail at $150k you had disparity, BUT very little room to play considering the cost to do basics is fairly static, regardless of the end value of the house (in the low/mid range I mean) – but, for every deal you don't do you learn something, which in the end is what you want to do – education, education, education – don't get your feet burnt in the first deal thru lack of education!!I would also be asking how much research you have done on the property – WHY is it 30% cheaper – if you have gone ahead and put a contract on it, you have 21 days (your finance clause) to sus out – you also mention a LONG list on reno requirements, then say you are going to take 'a week' off work – what you have listed is a lot more than a weeks work!!! We have just done a substaintial reno in a mining town – took 6 weeks, and we are very fast; and cost close to $80k – for instance, our bill at the local hardware for 'incidentals' was over $10k – it certainly adds up!
you mention 'bathroom just some tiles, a vanity, toilet and cheap shower.' – and use the word 'just' in the sentence – sounds like 'just' a complete bathroom reno to me!!!
as long as you have the time, and no pressure, you can do anything – after 3 reno's, I still double the labour times given, as that is the cost that is so variable – you can price the basics like 'the shower/vanity/toilet cistern' etc, but just how long each job takes, and the variables in each job is the uncertainty.
you need to go 'room by room' on a spreadsheet, costing basic items and estimating time taken to do each job – then double the labour component, and if the final figure is still within the ball park, go for it!!!There is a mile of difference between having an investment property, and property development.
you ask what are the common traps/pitfalls first timers get caught out on – lack of knowledge and lack of education is what keeps screaming at me on the forum – you mentioned, lightly and innocently I am sure, to 'the duplex game' – trust me, it is no game when you start losing a lot of money – you have to learn the rules of the game first, else you could be on the 'reserve bench' for a VERY long time.
Please take the time and money to educate yourself; then put your money on the line.
I have spent at least $20k in the last 3 yrs on workshops/books/meetings with professionals; and I can assure you every penny has been worth it; I have made it back in profits; and I look back on what I DIDN'T know at the start, and I am so THANKFUL that someone pulled me up with some 'reality checks' about just what could go wrong, but also with what can go RIGHT if you go about it properly.
I personally recommend the 'development course' of the Reno Kings as a good STARTING point!!
good luckAs a new member of this forum, I have had a good read of many posts – and this is another post that makes my 'blood run cold' – so to speak.
You need to know the answer to all these BASIC questions way before ' you put a contract on a block' – and if you are still asking them, you are not ready to buy – educate yourself first; it is a lot cheaper than buying the wrong property!!!you can only get a PPOR exemption (when you live in it) if you don't already have a PPOR!!
suggest you spend a few hundred and talk with a property accountant for some facts, as you stand to save it in tax!!duckster wrote:You may find a quantity surveyor may be useful in working out what you can depreciate.Also you may wish to nominate this PPOR to be your PPOR even though you are renting it out for up to six years to avoid any future capital gains tax. You just can't claim PPOR exemption on two properties at the same time.
I was aware that you could rent out your PPOR for up to 6 (7?) yrs ; and provided you either sold at that point (or during) or returned to the property at that point, there were no capital gains payable on sale – but, as I have not done it, but will be doing it soon, I wasn't aware you had to 'NOMINATE' it – to whom/how do you nominate it??
Hi – I am new to this forum; have about 7 projects completed.
We have always used professionals to assist us with the process; even after 7 DA's, I would still not go into it without a Town Planner or, in the case of rural areas, we have had a surveyor assist both times.
We have just finished a small 'splitter'; also a battle-axe block with the runway up the side – on both jobs we came in within a few thousand of the budget, that was prepared BEFORE we bought the block – with the help of our Town Planner .You need to do you sums before you start, and do a lot of research so that you know the facts before you start.
I study an area up to 3 months or so – with the help of RP DATA I know the price similiar properties have gone for, and when I find one of interest the first person I call is the Town Planner to check out basics – eg: essential services like 'sewer'; where is the water located in relation to the block; then do a projection based on our current knowledge – and when we started we PAID the Town Planner to assist with that.
We have spent a lot of money educating ourselves – we can highly recommend Reno Kings 'Development course' to give you a good overview of the process – I often read comments about the cost of workshops – if they are good ones (buyer beware) they are well worth the investment – we have well and truly returned our investments in workshops with profits over the last couple of years.
If you are needing to ask what 'DA Approval' means, I would suggest you are not ready to buy yet – spend some money on your education, rather than loose many THOUSANDS by making a poor purchase this early in your career – there are groups that meet in Brisbane that you can join also – I wish I had started much earlier than i did; but also very pleased that I educated myself FIRST!!
