Hi,
Hot Tips anyone??[baaa]I believe in give and you shall receive so here we go.
A house in my area went on the market about ten days ago, so may have been sold already, however there is no ‘under offer’ sign so may still be free. Only went in the paper this week.
3×1 brick and tile ‘cottage’ on 1012sqm block. The house is on the front and already has the back block and driveway cleared. The house is in Smythe Street, Rockingham WA, 3 streets from the beach. Houses rarely go on the market in this street. What is special about this area is that the street that runs past it down to the beach is called Wanliss Street and is about to get a new transit system linking the Beach/new train station which is coming/bus
station/University/tafe and Shopping Centre. The future Wanliss Street Jetty has also been approved with a café strip. Wanliss street not a long street and is about 6 houses from the block that is for sale. Price is $410,000. Advert in the paper reads:ROCKINGHAM BEACH $410,000
JUST LISTED
This neat older style 3 bedroom, 1 bathroom brick and tile home is
located very close to Rockingham Foreshore on 1012sqm of prime real
estate. Possible future 3 unit site. Be quick.
BRIAN WALKER 0412 160 289 Glenway RealtyAs I have recently completed subdividing and building my own home and am looking around for my first IP, I am not in the financial position of buying and waiting for future returns, I need them straight away to furnish the loan. The rental from the cottage would be around $110 pw, so not a proposition for me at this stage.
Feedback from developers if this would have been a good proposition would be appreciated as I am learning all the time and eagerly await the post for my Buyer Beware package.
Best of Luck those who are interested, apologies if this sounds like a Lemon!
[confused2]Hi Lisa,
What would the front strata sell for after subdivision, and the same for the new dwelling on the rear strata ?
You’ve done such a development in the area so you would be in the prime position to work out if the end result justifies the effort…
In my opinion in the current market, a lot of this unrealised gain (post subdivision profit) has been priced into the initial asking price, thus making these properties unviable as development prospects.KP
Hi KP,
I can see where you are coming from and definately agree that it has been factored into the price. I was shocked at the going price when I spoke to REA as I have lived in the area for years and it’s only taken off in the last 12 months. I would advise to demolish the front cottage and build two strata’s. My front 4×2 was valued at $440,000 and the back (original house)4×2 at $380,000 in Jan this year. I was also told I could expect mine to reach half a mill within twelve months. If you type in 6168 postcode on any of the RE searches you’ll get an idea of the prices in the Rocky Beach area.
There are already some townhouses and villa type units in the area, and the apartments will be everywhere (I had been looking at buying a serviced apartment here but decided against it).
Emotionally, I would buy across the road in a flash if I had the resources (or a share). Taking the heart out of it I still think it’s a good buy but maybe not a fabulous one.[buz2]
How does that sound?We have a couple of townhouses to sell off the plan in Parkin Street – $375,000. Great potential down there – you must be thrilled with your capital growth to date. The train etc will just push things along even further. What is the transit system down Wanliss Street exactly? I assume like a CAT bus is it? Or are they doing a tram.. that would be cool!
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
Hi Aus,
Hi Lisa,
Well if the price of yours is a good comparison for this one…then its not too far off..
Asking $440k
Settlement $21k
Subdiv $20k
Strata land cost $240k each
Build $150k each
Misc $20k each
Total per dwelling $410k plus holding costs.Doesn’t work to develop and resell based on your comparative price of $440k, but would work OK if you keep the original front home and just build a new one on the rear ( subdivision costs would be less for a start- no demolition)
What are single building blocks worth in the area ( strata subdivided block or green title full size blocks) If they are less than 240k then this one is to exxy.
Maybe a reasonable buy closer to $400k ??KP
Hi, you can’t buy a building block in the area. They are all oldies knocked down and built by the owner/builder. I think it would be the capital growth within a two year period which would make this deal a worthwhile one rather than the quick buy and sell off. prices have nearly doubled in 18 months and Ive been told that the area hasn’t reached it’s potential as yet as the developments here have only just started.
“Ive been told that the area hasn’t reached it’s potential as yet as the developments here have only just started.”
Development does not necessarily mean the market is on the rise. It can take many months, often a year or more from the date the project was conceived before construction begins.
Development planning often gets to a stage where the developer must decide to proceed or forfeit his/her investment – due to declining demand, rising interest rates, etc. Which is why at times new developments are being undertaken in locations where the market has flattened out or is on the decline.
This may not be the case in this circumstance, but it is always something to consider when evaluating any location for investment.
— Michael
Great advise.
I am in such a situation where we are looking at building on vacant land but titles will not be issued till next year..at least 6 months away.A lot can happen in the interim ( interest rates changes, current market changes, etc) so it is wise to stop and think and factor in the “worse case secnarios” that can occur before proceeding, especially if you can’t commence straight away..
Thanks Michael,
KP
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