Hi all you brainiacs, I need some creative input if you have time.
Revising good ‘ol Earl Nightingale’s “Acres of Daimonds” essay recently and of course it makes one open ones eyes to opportunities in your own patch.
For nearly a year now a local property has been on the market, and is now up to agent number 3. It is an upmarket suburb, and this is an enormous block of land set on a hill over a busy road, with an original 2 storey 1940’s house on it, very large. So it needs a complete refurb or some other twist.
It’s empty, and I don’t know anything about the vendor yet as I haven’t spoken to the agent.
About a year ago it was listed at $1.6m+, then $1.5M+ now $1.3m+.I gather the developers haven’t snapped it up because of a single-dwelling covenant but will know more when I get to see the S32 statement.
It has to be a problem looking for a solution, but for the life of me I don’t know what – any ideas??????? If there is a single-dwelling covenant then forget high density multiple dwellings etc.
I would assume a total refurb would be in the vicinity of at least $200K with few wall/room changes, much more if you do alot of internal structural work.
Any ideas anyone????
Cheers
skippygirlWhat’s the dirt worth ?? The answer to that might solve a few queries, and eliminate a few starters.
It sounds residential, so if you can’t chop it up, and tenants won’t pay you any extra to rent it for the larger land component, it’s a dead duck from my view.
Even if you pick it up for less than land value, it’s going to be woefully cashflow negative. The only thing that’s going to make it viable is future CG.
What has it done for the past 30 years, compounded annually ??
Would it be possible to turn into a bed and breakfast or a boutique hotel maybe – would need to check council guidelines.
Need to know more about where it is located – compared to transport, shops etc. also actual square meterage of house and what council rules are. Once you know all that I am sure there are plenty of people on here who can come up with the ideas
Cheers
Hi Skippygirl
I have an idea what your thinking…the owners are getting desperate…price drops…agent changes…absentee ownership…I might be able to pick up this property for a lower price than what I think the property is really worth. The problem with this is that the property is only worth what the market will pay and do you really know what that is? What would the true market price be post renovations? What can you do to this property to improve it’s value. Misty’s B&B is a good suggestion. Can you raise it make it into a boarding house with many rooms upstairs and down…or would this actually remove value? Does the property have any ‘historical social standing’ within the area that you could enhance/promote? If you renovated would council slap a value sapping heritage listing on the property? To me…it just seems to risky.
One way to remove 99% of the risk from this process is to flip it. see flips/swaps etc. But that means having a buyer waiting to sign a contract with you the moment your savvy negotiation with the owners lands you a deal worth doing…very difficult if not impossible for most people not in the industry.
Sorry I can’t be more help
Ben
Is it near a uni? Instead of a B n B that needs constant attention, you could make it a university boarding house?? How many rooms? How many would have to share bathrooms etc?
How much rent vs. value – not sure it would be worth it?
Lots of $$ to outlay if then cannot onsell.
Find out why it’s not selling, why wouldn’t someone who can afford it want to live there with a bit of reno?Thank you all for your comments and ideas.
Ben I think you read my mind – you are pretty close to what I was thinking.Being Melbourne Cup week and being away interstate for work I haven’t been able to go see the agent and check 32’s etc. or find out the vendor’s situation. Once I see the zoning I can research what is permitted. All I know is it’s empty.
It is not being advertised by the agent/vendor, it is now down to just having the board up.
As I mentioned it is on a hill with a busy road below, but the driveway is off the side street. The house is very big, and sits at the back of the block (highest part) with a large expanse of front yard. Oddly, because the driveway is off the side street the front entrance is useless as you would never go in the house that way.
Ben supposedly AV Jennings built it or lived there, I have no idea if that is true.
There is a uni within 5 km, train is 2km away so no real PT other than local buses. Great local shopping village. This is an upmarket suburb so everyone drives.
There are some strong covenants in the old estates. One developer was routed by the local residents when he tried to sneak a dual occ in a couple of years ago.
The block has to be at least 1500 sqm. I’ll find out. Probably makes the land value around $800K.
There is 180cm old paling fence above the retaining wall to block out the busy road, it needs replacing and I would plant a whole row of screening trees to increase the screening effect as well.I will do some more research on the sales of renovated big homes in the area and work back from there. It is a low turnover area so homes tend to go quite easily when they are sold, which makes it strange that this one hasn’t gone, it must be the too much land factor.
Cheers
skippygirlChildcare Centre!
Bucks in them. get it D/A and resell for nice gain.
Wow! Nathan you are a brianiac.
The area is chockers with families and the local child care centres have waiting lists. It is a high income area and the local primary is full to capacity.
I will have to check the zoning – is a child care centre a permissible use under a residential zoning usually?
I gather they are valued by the number of places they can earn income from, so I will do some research.
I guess is has to stack up as more valuable alternative use than a prestige home huh?
Thanks for the poke in the ribs.
Skippygirl
Hey Skippy,
Have you already done a “Propertyvalue” search on this one? (It’ll cost you $40)
Propertyvalue.com.au lets you enter an address, and tells you the sales in the last 10 or so years (of course, if it HASN’T sold in the last 10 years, then you’ve done your dough).
But if it HAS sold in that time, you now know how much was paid for it (could be useful). It also includes demographic data, and sales in close locality.
Benny
My thoughts are: What are big bouses going for in the area. Is it a $2M area?Check out covenants on demolishing and rebuilding, heritage listing, etc. Then find the biggest most imposing display home. Have soil tests done so you know if any rock problems etc.Choose either two storey (set on hill) or long low verandahs right across block. Check out what price this should go for. This block cant be sold so is only worth the price of one block, not all the land they have so I would only be offering $850,000 or less and let them talk you up. Interested to hear progress from you.
Fern
Is it a tourist area?
What about backpackers?
Melmac
Thanks Benny I’ll see what the propertyvalue service comes up with.
Fernfurn I do have to check the covenants an dany heritage overalys, but on the face of it the house is an original 1940’s and supposedly once was AV Jennings’ home, so I am anticipating demolition etc will be out.
Melmac it is blue chip residential so backpackers etc wouldn’t work here, good idea though.
Am stuck at a conference for next 2 days so will keep researching in spurts.
Thanks
Skippygirl
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