Howdy,
I would really like some feedback on the following situation, as I am a bit tentative right now.
I have located two properties in the Perth suburb of Thornlie and am contemplating whether or not to buy none (not likely), one, or both of them. We (family trust) have just jumped into the investing game and this will be my first real purchase.
1. 3×1 B&T home on an 860m corner block at $145K. The home is tired but not run down, and is situated in a position that would allow subdivison without demolishing. It is in the process of being re-zoned to R30-R40 which means blocks of minimum size 300m – 220m.
2. 4×1 B&T home on a 792m corner block at $155K. The home is tired and run down, and would need demolishing before rebuilding could be done. It is in the process of being re-zoned to R40-R60 which means blocks of minimum size 220m-180m in size.
Now my problem is that I am a beginner, not much of a handy man (but willing to try), and have no experience with development and/or subdivision. We have the deposit money, and would rent out both properties while organising the subdivision/development. BUT HOW DIFFICULT IS IT?? Should I stick to home 1 and learn that way, or dive in an learn the hard way? Does anyone think Thornlie is a bad area to invest? A new train station is being built two streets from home 2, and 1km from home 1. Council re-zoning has passed stage 1 and is onto stage 2.
Looking forward to your replies, [
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Justin xThe higher you jump the harder you fall. [
]Justin,
Given property investing is new to you and you stated at this stage you are not all that familiar with subdivision/handyman etc, I would only recommend purchasing one out of the two properties to begin with. After you become comfortable with the process, move on to your second, third etc etc.
I live in WA and believe there is certainly nothing wrong with Thornlie. There is however a high turnover of stock in this suburb given its affordability and therefore is probably more consistent with a profile of an investor who is aiming for rental yields rather than capital gains. As a beginner I would recommend starting off by looking a property that offers you positive cash flow.
It sounds like you are looking to build on these blocks however and so I would just encourage you to research resale prices of new dwellings being built and preferred builders and costs etc. One point to note in WA is if you decide to hold one of the properties long term and not demlolish, properties with 1 bathroom can sometimes be difficult to sell. Just a thought. Also if you are looking at building 3*2s are becoming very popular and possibly there may be more margins in these than 4*2s.
Regards
Craig [8D]
G’day Justin,
I jumped in with both feet and haven’t regretted a minute of it! (well maybe one or two[])
I purchased 2 IPs and am yet to settle but its been a valuable learing tool.
I don’t think buying 2 has made me learn any faster but I’m twice as far ahead for it.
If you can afford the worst case senario (probably paying back two vacant houses), dive in!
If you can cover the costs while learning about the development/subdivision side why miss out on a good deal.[] If the due dilligence checks out, why not!
Maybe I’m a bit too eager but only time will tell, I’ve already got too many “what if I had..”s to lament over, so I’m not going to let fear slow my progress.[8D]Best wishes,
Scott S“Aim for the stars and you’ll shoot the top of the telegraph pole. Aim for the top of the telegraph pole and you’ll shoot yourself in the foot!”
-anonYea I will have done my first 2 IPs within a space of three months, but I have extended my finances as a result and am a little exposed. I will just have to juggle bills etc.. best I can, like delaying payment of them etc.. until I get my 15-15 tax sorted out. One is tenanted, the other settles this week. Both will be negative cash flow. Possibly up to about $70 a week for the two after all tax stuff is sorted out. Well they are brand new and close the Brisbane CBD so hoping to get rent increases within 6 months.
Yea I feel the same on the point well if I can handle both and then focus on getting better rent for the next tenant terms, then two will be better than one. Worst case I see, I sell one and just cruise with one for 6 to 12 months.
I can offer some seetners to the tenants, to get better rent, like a couple of ceiling fans at say $500 including installation and put the rent up $10 per week, they will pay off over 12 months then I would get better return. I cant complain, getting $280 a week for a $244K property. They took a 6 month lease so I’m gonna push for $290 end of year.
Iceman – can you still get cf+ properties in Perth?
Peter
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