Hi,
Issue – I’m not sure whether to go for an IP purchase with a reno in mind in terms of whether it should be:
a) Unit/Appartment – where I can stay within a 10km-15km ring of the City (which is what I prefer re location), or
b) House – but would have to be further out from City (e.g. 15km+)Question 1 – Relative to the value of the property, is a Reno on a Unit generally much less viable in terms of ability to manufacture some additional $?
Question 2 – While I’ve noted all the above, and comments on which of the options a) or b) you’d go for?
Notes: Maybe not needed for questions but I have $500-$600k to play with and talking about Brisbane (would need to deduct a little from this for reno costs, but have already taken out transfer costs).
thanks
If you are wanting to sell it you might want to see what is selling as far as reno property goes in the area you are looking at.
Then you know what is in demand and what is could fetch and what type of reno is popular in the area you are looking in.
Also need to cover selling commission in your profit margin calculations.thanks – I was more looking to buy & hold, but just can a handle on whether there's a better chance of increasing equity via a house reno versus unit reno, or whether they are both as viable (relative to their cost). Hopefully this makes sense.
Hi,
There can be benefits and negatives for each. The best thing to do would be to do a full feasibility using a good software package and make sure you cost out every single part of the project. It's very hard to generalise to a point of saying that houses are better than units. Generally, building depreciate whilst land appreciates, but what if you come across a situation where it's a mortgagee sale and you get a unit that is in dire need of a renovation and there $150k to be made or more…and the only house available for renovation at the same tiem has a profit of $50k…which would you take? It's really all about the numbers for each and every individual deal. You can't really put them all in one basket.<Moderator: delete advertising>
Hi,
there are many things to consider here. I have done both in the past.
It is easier to overcapitalise on a house, because a unit is more limited in what you can do. Also, remember that even if you fully renovate a unit, it is still a unit in an old block. Getting an entire block rendered and painted is a huge project and it can take many years to convince the other owners.
I would start out comparing the yields between the houses you are looking at and units, post-renovations. This is not easy data to get, and will involve many open inspections that you will have to attend. Also, speak to real estate agents and ask them, if I did and that, how much rent could I charge, how much would the property go up in value?ok – thanks
looking to do the same thing now 'mixedup'….
how can you come accross these mortgagee auctions,
im looking for any suburb in VIC that has a 1bd (55+ sqm) around $200k
its impossible!!
Planning on holding long term it's more important to consider the area you are buying in, for a buy reno and quick sell the location is not so important in my opinion as it's very much about the numbers and not what infrastructure will be built there 5 years from now.
I look for 20%+ increase in values for a renovation project at the cheaper price ranges as a decent minimum benchmark; just looking for cosmetic reno's as well, avoiding structural issues and value takers like roof, gutter, stumping etc.
Rough figures for eg:
Buy for 300k
Close costs @ 5% = 15k
Cosmetic reno @ 20k
Total costs: 335k
Revalue at 360k+ (300k +20%)Time for turn around an issue, units/apartments potentially much faster!
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