Hi all,
It's been a while since I have been in. You know the drill, work, kids, and oh, pneumonia
!!! Anyway, I am trying to get back on track with finding a property to reno.
I have gone through the Renovation Toolbox (offered by Property Invest) but am unable to find any deals in my surrounding suburbs which fit the Quick Deal Analysis or the numbers when they are crunched.
Can anyone help? Do I just go ahead anyway? For example, there is a 3 bed, 1 bath no car brick home near to me, listed at $309 000 Narangba, South east Qld. According to the agent when a reno is done on it the price for sale would be about $330 000 – $340 000.
Now according to the quick deal formula I would have to buy this property for around $250 000. There is no way the owner will drop to that amount. Every deal I have come across is similiar in that I would have to get the house for next to nothing to make a 10% profit.
Is anyone finding this too? Or can you point me in the right direction regarding the figures etc. Perhaps I am reading too much into them.
Help!!!Tina
Hi Tina
If the numbers dont stack up then don't do it. Look somewhere else or try a different stradedgy or wait until the marked isn't so hot and moves more to a buyers market (I know Narangba and Burpengary are pretty hot at the moment).
Even if you could get your proposed property for 290k then for example, 10k on purchasing costs, 10k on a reno, 5k on holding and sundries, and 10k on selling costs. This only leaves 5k (based on the lower end of the selling costs) for your profit. Not much reward for all that effort and risk.
Happy hunting,
Okka
Hi okkamooie,
Thanks for the reply. Guess you're right there. Sometimes I like a little confirmation on my opinions. I am busting to get into something, but my figure just don't add up!! Hopefully, I will find something soon.
Cheers,
TinaHi Tina
If the numbers don't work, definitely don't go ahead anyway.
Those formula's don't work on every house. That's why they are there: to quickly rule out the majority of properties so that you only spend lots of time on the ones that might actually work.
Also, don't just ask for the agents opinion on what the end sale price would be. Get some hard evidence. eg actual sale prices of freshly renovated homes in the nearby area in the last 6-12 months. Ideally you want to see photos of the homes as well so you can see the type of reno, and the type of quality that needs to be produced to expect a similar result. And don't rely on just one other sale, because sometimes a buyer pays too much, but that doesn't mean all the buyers will. I would say at least 3 very recent sales, very similar to the property you are researching, and in very near vicinity. Same neighborhood, not just same suburb.Also, I personally find it hard to look closely at numerous suburbs at the same time. I like to focus on just one for a few weeks until I feel like I know virtually every house that comes on the market, and can take a good guess at what it will sell for. Then I start looking at another suburb, preferably one that is neighboring.
Hope this helps you.
Cheers.Hi Jase & Flic
Regarding your comment "Ideally you want to see photos of the homes as well so you can see the type of reno…" – where would you source this information?
I'm also finding the same problem as Tina with the numbers not stacking up and we've looked at tons of props in our neighbourhood. Even thought of bringing the 10% reno cost down on some to balance the figures.
sumnerstephen wrote:– where would you source this information?
I'm also finding the same problem as Tina with the numbers not stacking up and we've looked at tons of props in our neighbourhood. Even thought of bringing the 10% reno cost down on some to balance the figures.
I asked an agent to print me out recent sales history in the area. This gave me addresses, sale dates, and prices. Then I looked up sold properties on Real Estate.com.au and found the ones that had good sale prices on my list. Then I looked at the photos in the ads of the sold properties.
If the houses in your neighbourhood don't fit the numbers, then consider trying the next neighborhood, or the one after that.
I looked for a month flat out in one suburb, and it was hard to find one that worked. Then an agent said I should look at a house in the suburb next door, so I did, and bought it, and it is going great so far.
I think there are not heaps of houses that fit the bill, but there are some. Just have to find them.
!!! Anyway, I am trying to get back on track with finding a property to reno.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
