All Topics / Help Needed! / To buy this property or not??

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  • Profile photo of Jodee73Jodee73
    Participant
    @jodee73
    Join Date: 2009
    Post Count: 9
    April 15, 2010 - 5:49 am

    Hi all,
    Would love your opinions on this one.  I have the opportunity to buy a house in a country town for $65,000 this includes a 2 bedroom house on approx 1000m2 block and also the block next door at 1000m2 (the block with the house is $55,000 and the vacant block is $10,000).  The problem is that i think real estate sales are quite slow in this area.  the reason i am considering it is because of the price – I spoke to an agent and did some research.  the agent said that it is an great price and that a 2br would normally sell for around $150, but that sales do take a while to turn over in the town.  I would not bother to build on the second block as there is no developing happening in town at the moment.  I think, given my research $120 – 130 would be a great price. But given that i would only spend around $15,000 to renovate (very structurally sound), should i buy it at this cost (because i can draw down on an ivestment property i already have, don't need to get a loan for it) spend the money and sell it off cheap – maybe $110.  I am trying to find a quick turn project to bring in some more capital.  Oh and also it is around 5 hours away from where i live.  ADVISE APPRECIATED

    Profile photo of Ryan McLeanRyan McLean
    Participant
    @ryan-mclean
    Join Date: 2010
    Post Count: 547
    April 15, 2010 - 10:55 pm

    It depends on how quickly you want to get your money back. If it takes a while for properties to sell then can you afford to have the property on the market for 12 months before you get your money back? It might be an idea to try and rent the property out while you are trying to sell it so that at least you are getting some money coming in.

    If you can buy 2 blocks and a house for $65,000 and then sell one block and the house quickly for $110,000. After spending $15k on a renovation you would come out with a block of land for free and $30,000 in profit. That sounds like a pretty good deal to me.

    If you can afford it, and if you can afford to wait in case it takes a while to sell, then why wouldn’t you snap it up?

    Ryan McLean | On Property
    http://onproperty.com.au
    Email Me

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