What some requisites you use when buying a property?

Hi Chris

Another that I like to tick off the list is "value add potential" – I like to purchase IPs that can be cosmetically renovated for instant equity gain. Helps to build the portfolio quicker.

Cheers

Jamie

You need to understand what a reno'd property costs to buy versus what an unreno'd property.  You also need to understand the price of certain things.  eg cost of a new kitchen, cost of just changing the cupboard doors or just painting them, cost of new carpet, cost of painting etc.  This will help you identify which properties can offer you maximum gain for minimum outlay.

That will give you a rough idea, but remember that you will only be able to see the prices that vendors are "hoping" to get for their properties… not what they "actually" get.  You could take a look at auction results and so on in the local paper, and also on sites such as realestate.com.au.  Going to a bunch of open for inspections will help you get a grasp on "what costs what" too.

The kitchen planner tool on the Bunnings website can give you an idea of how much cabinetry would cost.  Of course, a custom-made kitchen will be a bit more, but not by a great deal.  I've just done a reno and decideded to go with custom-made cabinetry because I had to fit some of my cabinetry precisely between two walls.  I couldn't imagine DIY-ing my way to glory and getting it right "to the millimetre", so I outsourced.  But the price differential was only a couple of hundred dollars.

Visit flooring centres to understand the cost per square metre of the various different flooring options and so on.

Learn something about the cost of paint – it's more expensive than you'd think.  In general 1 litre of paint covers 12 square metres (so for 2 coats you'd need 2 litres per 12 square metres). 

Also learn something of window coverings that are appropriate for the type of property you are targetting  (eg pvc venetians is fine for low to mid-end stuff, but wouldn't cut it in an expensive suburb, so you'd have to go with plantation shutters.

Eventually you'll understand the pricing of the big ticket items and be able to wander into a place and say RIGHT.  This place would cost $xx to renovate and at renovation I know I'll be able to sell it for $zz.  Factor in stamp duties, legal fees, capital gains tax etc (if selling), and that will show you the maximum you could pay for a property before it becomes a break even or a loss.

Thanks rootietootie for posting website onethehouse.com.au….its fantastic…just what I have been looking for!

If a town has performed well over a decade, it will likely perform well again over the next decade.

A great indicator of growth is forthcoming infrastructure (new freeway joining the town to a major city, new train line etc)