Hi everyone,
Looking for your expert advice here. Here’s a couple of properties I have been mulling over for the last few weeks…………
Which do you see as a good choice:
a. 239K (reduced from 249 a week ago) – 3 br house, near park, schools, local shopping mall. Completely reno’d – looks like a doll’s house.
BTW….With this one – some guy is putting in an offer on it in the morning, and it will be up to me as to whether I do likewise; but for some reason (as much as it appeals) I just can’t bring myself to “compete” not NOW, not when it is a “buyers” market, and REA’s are ringing me constantly asking me to look at this one or that one!!!!
b. Range 240-250K- 3 br house, rear yard fence backs onto Uni carpark, within close proximity to transport, but shops a bit further away. Older style home, needs a slap of paint, but generally pretty good conditiion.
c. Neither, look for something in between.
Many thanks in advance.
Cheers,
Jo
Thanks M.A. that was something I definitely considered.
Cheers,
Jo
Hi Monopoly,
The best deal is the one that is the best price relative to the local market and with the capacity to add value and/or meet an appropriate rental return that suits your beliefs.
Given you haven’t mentioned rent I assume rental returns are not an issue for you. If it was then rates of return and/or capacity to add to market rents is a consideration.
On the limited information given I would lean towards B on the understanding there is greater capacity to do a little R & R thereby creating some potential equity growth.
On the otherhand property A seems to have limited capacity for growth as it soounds as if it is being presented at its maximum value.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Thanks Derek,
Again, your response (as is Rob’s) is much appreciated.
No you’re right, rental return is not a major issue for me at the moment; partly because I accept that in the current economic climate, rental yields are not the healthiest (albeit temporarily) and may not be for some time. My major concern is CG and I can say with confidence, as both properties are in the same suburb, this should prove a profitable buy. The area I am referring to is Frankston (Melbourne) and with the green light being given to the new marina, I’d imagine, any purchase within it’s boundaries will prove profitable in the long run.
As for Option A; I couldn’t agree more, “cute” is nice, but I’m not looking for appeal; I have no aversion to rolling up my sleeves, doing a bit of hard yacka and bringing up to scratch (or to the same level; which is not my goal; it is only intended as a “rental” not a showroom exhibition).
Many many thanks to you both. It is always nice to have a “sounding board”!!!
Cheers,
Jo
Jo,
What are the returns?
I run a student rental and would be happy to share my experience – give me a call anytime.
Cost you a beer next time I get to Melbourne [biggrin]
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Simon,
As we discussed, the rental returns are pretty poor at approx 4.33% and the like, but hey, we can’t have it all at the moment can we???
Guess I will just have to settle for CG once that marina goes in. Nevertheless, it will be (in later months) as a pleasurable (sea)change into the cossie, slapping on of the sunscreen and enjoying the beach whilst waiting patiently for rents to escalate in par with the temperature!!!! [sunny]
Cheers, [winking]
Jo
Hi Monopoly,
I probably don’t have the experience or market knowledge of other’s who have replied, yet despite this, I think the advantage is with option B. Having the Uni means Uni students independence will probably demand a rental property and therefore I don’t think you’ll have a vacancy problem. Also I don’t feel Uni students will be too worried re: appearance of property as say for example a young couple may be. Also, being close to a Uni may mean low risk of vacancy period?
Good luck,
Regards,
Gatsby!I dunno, that observation sounds very market experienced to me Gatsby!!! [book]
You made a very valid point, and as with the others, thank you for your post.Cheers, [sunny]
Jo
Jo,
I’d say B, as it has the potential to :
1. Be fixed up and sold on if you chose after some value add fix ups….
2. Keep as a UNI residence, with multiple streams of income…. i.e. you rent out by the room……
House A, seems to have no room for extra value add….
though I could be wrong….. but to me B sounds like there is more potential…
Cheers
Scott
Pelican Investments
http://www.pelican-invest.comThanks Scott,
Yes, you’re right (but you knew that already, didn’t you????!!!!)
It seems the consensus so far is without question [drummer] B; and I can see why!!Cheers again,
Jo
Hi Jo,
Surely though, option A must have a value as a deal – what price would it be worth to you to opt for A instead of B.
Perhaps that price might be worth offering as you don’t know what the other guy is offering. You’d be kicking yourself if he put in a low offer and got the property.
I say make offers for both at the prices you are comfortable with, they can only say no.
Jeff
Hi Jeff,
Yes option A is a worthwhile buy, not necessarily because it’s “walk in, sit down” job (what I refer to homes than need ABSOLUTELY nothing done to them) but mainly because of it’s location. HOWEVER, having said that, at the moment I have REAs CONTSTANTLY ringing my phone off the hook with that “perfect home” they are trying to palm off!!!!
I’m kinda feeling like a spoilt kid in a lolly shop right now; havig been given a dollar and told they can buy any lolly they like in the whole store, and I just REFUSE to fight the next kid for ANY PARTICULAR ONE lolly when I know I can get better value elsewhere!!!!
I’m in no hurry, and with the market being in my (the buyer’s) favour right now; I ain’t gonna bust a boiler over it; there’ll be other (and no doubt) better deals around!!!! If I want to go into a bidding war, I’ll attend an Auction [smash]but for now, no thanks….if the other guy wants it badly enough he can have it!!
The whole area is going to see good growth; and it’s a large Melbourne district; lots of places to pick and choose from; I can wait!!!
Thank you for your reply; and yes, you’re right there is some value in option A, but B & C hold good merit at this time too. [blink]
Cheers, [upsidedown]
Jo
I wouldn’t consider renting by the room unless you have a min of four bedrooms – preferably 5 or more. The economies aren’t there unless you do.
I know at $100 per room a three bedder wouldn’t get much more than if it was just rented on the open market. With “by the rooms” you need to pay for utilities so it really isn’t worth the effort under five rooms I think.
You will need at least a seperate toilet if not two bathrooms.
Kitchen needs to have sufficient storage space for five individuals – different to a family of five.
Living space does not need to be large as students tend to live in their rooms.
ADSL networked to the rooms will be a huge drawcard and something I am dying to do when Telstra lifts it’s act and services my street.
If I can help with any other info – just ask.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Simon,
Yes I totally agree, and although option B would be great, I know that as 3 bedder with only 1 bathroom it is really NOT suitable for student accommodation, certainly not on a “by room” basis….there’s just (a) not enough rooms, and (b) definitely not enough bathroom facilities!!! [dunny][glum2]
As I mentioned to you, I am not overly concerned with either property, but I think student accommodation is an awesome means of maximising rental capacity provided you can find the right sized property in which to house them [grad][grad][grad]!!
Well done with your venture Simon, and I hope Telstra get their act together and hook you up soon [computer]and in turn escalate the rental potential in your property!! There’ll be absolutely no stopping then hey????? [medieval] [thumbsupanim]
Cheers, [sunny]
Jo
I would go A, and offer $210k.
And go B and offer $210k
If you are not embarrassed by your offer, you are offering too much.[blush2]
Now, where did I read that?May God prosper you always.[biggrin]
MarcOriginally posted by Marc1:I would go A, and offer $210k.
And go B and offer $210k
If you are not embarrassed by your offer, you are offering too much.[blush2]
Yes I read that here somewhere too, and gotta admit, it has become a favourite with me also!!!Did one better Marc, offered NOTHING on both!!!
Went for option C; therefore still looking!!![whistle]Once again, thank you for your pearls of wisdom (albeit borrowed, appreciated nonetheless)!!!!!
Cheers,
Jo
Jo
I have option D for you.
My brother lives in Shaftesbury Ave. He has a 3 bed house and a one bed unit. Back rented at $150 and house probably at $210.
He wants around the $300k mark.
All the work is done. He is a carpenter, so its all done professionally.
I have suggested he sells and buys something he can develop. For a passive investor its great but for someone in the trade I suggested he buys an old joint for $300k and turns it into $450k with his sweat equity.
If interested, let me know and I can give you the details.
Thanks Yack,
I’ll PM you now and get some more detais….sounds very interesting!
Cheers,
Jo
Gotta love a “win-win” situation[inlove]
REDWING
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