Forum Replies Created
Dellas,
Consensus here is correct in relation to YOU MUST DO YOUR HOMEWORK. I also agree that you must chose an investment property based on your investment strategy (whatever that may be).
However, I do believe there is a right and a wrong answer. This is the reason few are successful and lots are not.
I think the worst thing you can do as an investor is to sell. If you want to make money out of property, you need to own lots of them. Selling your property incurs agent fees, legal fees and CGT. Why would you waste that money?
Secondly, I believe you always want to get your property positively geared. This is almost impossible to do straight away and may take a year or so if you have value added through subdivision or renovation and longer if you have not. Whilst negative gearing has some tax benefits, this limits what you can borrow for your next investment and also takes money out of your pocket each month. This is not a sustainably strategy and only really suitable for people who want to buy one property every 5-10 years as a nice little security blanket for when they retire.
These are all things to consider.
Dellas,
Very difficult to give you an answer without knowing if this is for yourself to live in or an IP.
If for yourself, then do you have children? Do you work in the city? Etc, etc, etc. This will change everything.
Ok, so I’m going to assume this is an IP. For $450k you could buy a unit, appartment in Surrey Hills or Balwyn. There is excellent capital growth in these (blue chip) suburbs and you are targeting young professionals. Hold on to it for a year, then do some renovations and you should have yourself a very nice little earner.
Alternatively (as I’m out in the eastern suburbs), $450k will get you a decent 3 bed house in Croydon or Bayswater, with the potential of subdivision. You need to be careful about your target audience though as this is mainly a family area (e.g. no one wants 1 bathroom).
e4a,
Steps are basically as follows:
1. Get a planning permit – this involves going to a land development firm (easiest way), getting them to draft up some architecturals, place the unit on the site etc. This is very important as most councils now require a certain amount of private open space (POS) that is north facing. They will also look at overshadowing and essentially should be able to tell you straight away how good your chances are of getting approval. They will also know the council and whether or not they are a nightmare to deal with. All of this will cost you around $10k.
2. Get a building permit. This is a token requirement that you shouldn’t really have any issues with and will be quite cheap. At this stage (depending on whether you’re going to build or sell the subdivided block) you need to get a soil test done, structural and foundation designs done, as well as drainage. All up this could cost around $4k depending on the topography/soil type.
These are the main requirements that you need to develop the property. In my experience (very limited), councils are a nightmare and you need to make sure that you have a chat to them regarding the development to gauge whether they are happy with it or not. At the end of the day it is not a clear cut decision whether you get approval or not, most of it comes down to who is working at the council. E.g. stay away from Shire of Yarra Ranges at the moment.
Hope this helps slightly.
