Forum Replies Created
Mav,
whilst it is a very valid question you ask, maybe more important is your financial situation. You have to look at how much you can borrow and still have cash reserves for a reno project. If all you can raise is let's say $300k, then the lower end of the market is all you can do. Don't forget to factor in that you will need existing cash reserves for all sorts of additional costs during your renovation project. If, on the other hand you can easily raise $600K, the doing one project in that price range will be a lot easier than doing two in the $300k price range. I'm not sure the profit margin will be that different, you should still be aiming for at least 10% (spend 10% of the purchase price on the renos, and then make 10% profit on the purchase price). You can make a profit through renovations in any price bracket , as long as your research is sound.
gp808,
as number9 had pointed out, there are many options open to you, as you and your Mum have a lof equity available.
The worst thing you could probably do is sell the family home, buy a smaller one, and spend the surplus funds (which will be tempting once they are in your bank account).
There are many questions you need to ask yourself before you can make a decision on what to do;
Is the house you are living in too big for you and your Mum (sounds like it)?
Is it possible to rent out part of the house?
Do you have experience renovating? and many more…You should also meet with an accountant before contemplating selling the family home, to understand the implications in terms of CGT, etc. Another person to talk to would be a broker to talk about your options for using the existing equity.
I could go on and on, but the bottom line is you are in a good position and need to research your options.
Interest Only loans give you more flexibility. A lot of people don't understand this, but you can pay down the principal on a I/O loan just as easily as on a Principal + Interest loan, but you don't have to, that is the big difference. If you have spare cash, you can make extra repayments, but it is entirely up to you. Whereas on a Principal + Interest loan, it is the bank who tells you how much of the principal you have to repay each month. That's why it's more flexible.
Sandra
LandlordschoiceProperty leasing and selling solutions for the DIY landlord!Elle,
I would definitely recommend advertising this on-line to interstate investors. We at Landordschoice offer listings on realestate.com.au and domain.com.au for landlords like yourself. I would also recommend getting rental appraisals for both shop and unit. Definitely explain in the ad why the shop has been vacant, as that would be a concern to investors .
