I have found one of the worst houses in a great street in Ipswich Qld (More details later). One by one the houses are being renovated and this little house ( un renovated and in original pre war condition ) which is being overshadowed by the large houses is just sitting there.
Can I go wrong with the worst house in a lovely upcoming street? I would like to buy this property and rent it out and just wait and see what happens with other houses in the street
hard to respond with so little information. Sounds like you have looked at the overall property market and are OK to buy in. If the situation is as you describe it you are probably more likely to succeed than fail. From the info available I see to two potential areas to consider. Firstly you need to have a feel for reno costs to get the property to rentable state so you know if purchase+costs+holding costs+ reno = good investment or over capitalised property. The overshadowing thing may reduce the rental/resale buyer pool, but if they are only houses and not multistory units its probably not significant.
Our PPOR fits this category and after 20 years is only now getting out of the renovators delight category. Its worked out OK for us with current value at 5.5 times purchase price. Which is OK for the burbs. Your situation is different as you need to execute a significant reno quickly (cash up front and interest clock ticking) so you need to be sure you are ready for that effort and expense. Thats not meant to be -ve, in the right situation it could be very rewarding……but I dont know the deal or your personal situation.
good luck with your project
Hello Yarpos
Our daughter and her friend can move into the property and rent it. It is liveable which is good. So therefore we dont have to do any renos straight away and they'd like to be there paying cheap rent.
So if we let them live there we can do maintenance very easily. We can come and go to do any repairs etc
My problem is convincing my husband to look at the potential of the street. The houses are very big and grand in the street and I cannot see it not working. He just sees the awful house and not the potential. The only way to get this is to do a joint venture with someone else. Im sure it will work.
There is so much activity going on with renos in the street that it would be impossible to over capitalise on this old house as it will be a cottage and thats what it is amongst beautiful renovated houses
yes we blokes can be very unimaginative at times (but we can lift heavy things and have other endearing qualities). The situation was the same for us with our PPOR. My wife picked it, I wasnt keen (just saw the work, and there has been a lot of it) but its worked out fine.
If the property is to be negatively geared you need to check out the impact of artificially cheap rent on your financials. The ATO mention this specifically in their advice to property investors (can be downloaded from the ATO website)
We are doing something similar with our daughter. We recently purchased the worst unit (it was horrible) in a nice well located block and have renovated and let it out for now until she exits uni.
Hope it goes well for you
Well Yarpos I have just put an offer in ! Havent told my husband yet !!!! Only in my name. I have spoken to a couple of friends and I will sort out something until my husband sees I am right !!!!!
Gee I hope I am !kate2006 wrote:Well Yarpos I have just put an offer in ! Havent told my husband yet !!!! Only in my name. I have spoken to a couple of friends and I will sort out something until my husband sees I am right !!!!!
Gee I hope I am !better change your forum name to "thrillseeker" I think. I love the increasing use of exclamation marks …classic.
I trust this assertive approach to life is one of the things he appreciated when he married you.
Interesting times ahead……good luck with project and husband
G'day Kate,
Should your offer be accepted and you need some amo to convince your husband, you could consider doing a CMA (comparable market analysis) of the property. I.e. What are recent sales in the street and within 200m of the subject property like? A CMA can be done using RPdata or Reisdex (as a casual user if you do not subscribe).
If you work out that you are picking up the property substantially cheaper than properties on similiar sized blocks in the street and also work out an approx renovation budget, you could present a business case to your husband – to help get him over the line.
If the total costs of purchase + costs of the reno is at least 10% under comparable sales (once the subject property is brought up to their standard) you are doing well and the exercise was worth it.
Chris White | Pillar Property
http://www.pillarproperty.com.au/
Email Me | Phone MeThe Property Investment Specialists
Hello all
My Husband now knows. I said I am convinced I am right this time and I may get someone else to do a joint venture on this property with me. NOT quite those exact words.
I came to a compromise and said "it will work but if it doesnt I will never buy another property again"
I will let you know how it goes. They say position position position in real estate is important. When I stand in the street and see the beautiful houses I cannot see how I can go wrong.
wow… I am so glad that I have a considerate girlfriend that discusses *THE MOST IMPORTANT DECISION IN OUR FINANCIAL LIFE* with me. And that's my girlfriend : If she messes up, I'm not financially liable for her debts. But this is your husband ! I'm amazed that you were at all ABLE to make an offer without consent of your husband. I think it might even be illegal ( it *SURE* is ILLEGAL in europe ! ) because you are using assets from someone else ( 50% of your assets are not yours in marriage, remember that ). If you get into financial trouble, your husband will be too, without him having had anything to say about it.
And you did it despite the fact that he did say that he did not like the idea and it worried him, you still undermined him and put him into a financial position he did not want to be in !
You should be ashamed of your behaviour. Even if it turns out to be a good investment, NEVER undermine your husband.Goodness, you are an inconsiderate wife.
Scamp
This is a property forum and not a "Dear Dorothy Dix" one and your VERY rude post is totally out of line.
BTW Do you really believe it is illegal for a woman in the Netherlands to make an offer on anything without her husbands consent? I am not talking about whether a bank will give her a loan without her husband co signing it but simply questioning your in depth knowledge of the law.
I won't debate with you so please don't bother ranting back at me.
Elka
Scamp's comments should not be totally ignored.
In a falling market, a prestige type property could well kill you financially.
who was talking about prestige properties? scamp is offering relationship advice and the original poster was looking at a slightly tired worst house in a good street
The headline says THE WORST HOUSE IN THE BEST STREET IN VIC and further down Kate2006 says "the houses are very big and grand in this street".
To me, that indicates a prestige/high $$$ type property, even if the subject house is a dump.Anyhow, whatever type it is, people should understand that property can boom and crash. Nothing is guaranteed.
Hello Scamp
You have taken it so wrong. I have bought many houses without my husband agreeing ! My words were really not to be taken so seriously.
I once bought a house when he was in America. I rung and said Dont panic I have bought a house for $85,000. We sold it at a very good profit.
So dont worry my husband is ok now with it
I have now revealed the house is in Ipswich Qld. I was worried someone may beat me to it.
I will try and condense the background.
A few weeks ago I had seen a beautiful house for sale in Ipswich and saw it was up for auction. Anyway I forgot about it then found out it was going for about $650,000. I soon noticed there were a lot of renovations going on in the street. The suburb is one of the top suburbs in Ipswich.
The other day we had a look at this house and offered $470,000 (as its a buyers market at present) but were told its going back on the market at $595,000.
Accross the road from this beautiful house I spotted the worst ( i dont think its the worst now ) house in the street. Its a workers cottage colonial about 80 to 100 years old. I bought it for $210,000 yesterday . The cottage is on the corner so has two rd frontage
This cottage is for our two daughters. I will make up a web site of houses in this street to show how beautiful they are.
So sorry I said it was in Vic originally .
I am hoping to possibly buy another one in the street.
I have found out that a local businessman has bought up quite a few houses and he is the one doing all the renos.
The agent said they are hoping to get 1 million for one of the houses in the street. That wont happen in the current market
I assume you have consider the Tax implication of buying it your name alone.
If it is your intension to buy, renovate and then sell the property I would have thought a DFT would have been a better structure to use.
Richard Taylor | Australia's leading private lender
I assume you have consider the Tax implication of buying it your name alone.
If it is your intension to buy, renovate and then sell the property I would have thought a DFT would have been a better structure to use.
Richard Taylor | Australia's leading private lender
Hello Qlds007
No wont be selling. Its for our daughters and we will do cosmetic renovations and just see how the rest of the street goes.
Could be land value, we may move the house or add on
kate2006 wrote:I have now revealed the house is in Ipswich Qld. I was worried someone may beat me to it.I will try and condense the background.
A few weeks ago I had seen a beautiful house for sale in Ipswich and saw it was up for auction. Anyway I forgot about it then found out it was going for about $650,000. I soon noticed there were a lot of renovations going on in the street. The suburb is one of the top suburbs in Ipswich.
The other day we had a look at this house and offered $470,000 (as its a buyers market at present) but were told its going back on the market at $595,000.
Accross the road from this beautiful house I spotted the worst ( i dont think its the worst now ) house in the street. Its a workers cottage colonial about 80 to 100 years old. I bought it for $210,000 yesterday . The cottage is on the corner so has two rd frontage
This cottage is for our two daughters. I will make up a web site of houses in this street to show how beautiful they are.
So sorry I said it was in Vic originally .
I am hoping to possibly buy another one in the street.
I have found out that a local businessman has bought up quite a few houses and he is the one doing all the renos.
The agent said they are hoping to get 1 million for one of the houses in the street. That wont happen in the current market
595k for a house in Ipswich? they must be dreaming, it may be the premier street, however it is still only Ipswich. The same kind of money would get you a nice house muh closer to the cbd.
Kate
If the property is being purchased for your daughters then wouldnt it be preferable to hold the property in Trust rather than your personal names.
Any future Transfer to them will incur both Stamp Duty and CGT.
Richard Taylor | Australia's leading private lender
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