Buy for later, or buy for now?

[Rach]

Hello all,
Can someone please give us some advice:

Problem: Been overseas for 5 years and are now amazed at Brisbane prices. I am an interior designer, and would like to tackle an old house (not a cute Qld'er) and would like to live in the Paddington/Bardon area- where you mainly get cute Qld'ers!!!

We have found an old house in desperate need of attention, in the area that we would like to live in, which does not have the cute period features that you would want to keep. Perfect for me as I want to gut and modernise. It is on a fantastic sized block for the area, high on a hill and is on one of the best streets in the area. It has fleas, but we can deal with that later!

Option 1: We buy the "Flea House" and since it will still be expensive (because of the area) we do a quick tart up and rent it out for a couple of years until we have the funds/equity to rebuild/renovate it properly. Rental $ would still be quite good as the area is in demand. We buy an smaller property/flat (although I like land not flats) for us to live in, but one which could be a rental once we move on.

Option 2: We buy and live in the "Flea House" (post flea bomb) and buy an IP elsewhere as above. -the shag pile carpet would have to go, and a quick paint to make it liveable for now.

Option 3: We don't buy the "Flea House", we buy in a more up and coming area, live in it and do a quick tart up, realise some CG and move onto the next place. This way we are living in places that we don't necessarily want to live in though. And after 5 years away, we are looking for a little more stability if possible.

My fear is that there will be no "renovator delights" left in the area if we wait any longer. And this one is so perfect.

Anyway, if anyone has any advice it would be much appreciated.

Thankyou,
Rach

 

[Aceyducey]

Originally posted by Rach
My fear is that there will be no "renovator delights" left in the area if we wait any longer. And this one is so perfect.

Anyway, if anyone has any advice it would be much appreciated.

Rach,

There will ALWAYS be new 'renovator's delights' coming on the market.

Until we find a way for houses to maintain themselves that's foolproof (against destructive tenants & owners).

How much research have you done as to what's happening in the market?

It is very tempting to do a reno & add quick CG - but are you really adding value & doing the most valuable thing you could be doing?

If you're not buying the property substantially under market price for similar (renovated) properties it can be hard to make a profit.

You may do just as well by buying & holding & putting your time into other things with a better return.

We were looking for reno opps in a certain part of Sydney in '01-02 & found that the boom meant that it simply wasn't worth renovating houses, you really got better value just holding them. The renos we have done have been because we bought substantially under market value & the places really NEEDED work.

This sounds similar in need - but is it sufficiently under the market price for comps to make a reno worthwhile?

Also, due to a spate of reno shows on TV, everyperson & their pet is considering renovations....and I've seen cases where an unrenovated property sold for more than a renovated one down the street because someone KNEW they'd make their fortune renovating it......

So there is a case at present to say that you'd get a higher price when selling a property if you knock a few holes in the walls & stain the carpet. Not that I'd recommend it

Cheers,

Aceyducey

 

[Sunfish]

Rach........ Share your dislike for Queenslanders be they "cute" or "miners cottages" Not worth the effort IMHO.

Thommo

 

[Dos]

Rach,

My mother is actually "thinking" of selling an IP in Toowong that needs some work. They are keen to wipe off the PPOR debt on their current place and hence the reason for selling. In an interesting coincidence, they were concerned with having to let the long time tennant know that they were selling but she rang yesterday to say that she has a job interstate and has to move out in a month! Freaky Huh!!

Would be looking in that area??? I will try and get some more info and hope that offering these details is ok in this section of the forum????

Dos

 

[Rach]

Toowong would be a place of interest for us also. This would be for our home (not an IP) so it would have to be in a good position.

That was my dilemma though- whether to buy in a good spot that we would like to live in now, or to start buying good IP locations and be a little more transient in our ways for a while.

Maybe there is a better place for my enquiries as I was not speaking of a specific suburb as such, more about the approach to buying ie. the"where" came into it???? First timer....

 

[Carolyn]

Rach, welcome back to Oz.

Which option is more in line with your goals - short term/long term, Financial and personal goals? When your choices mix purchasing live in homes and ivestment properties then there are always a lot more factors to consider. (So much easier to buy an IP!!)

I agree with Acey...there will always be places for sale...the deal of the century comes along every week. Take your time in researching and getting on top of the market and planning where you are heading.

Carolyn

 

[Freedom]

We had a tradesman, plasterer, last week who said that 70% of his time is now spent fixing amateur renovations.

I think we all need to be very careful of buying renovated properties.

And Rach, you can always rent a flat instead of buying it - and buy a second IP on better land content, instead.

 

[Aceyducey]

Originally posted by Freedom
We had a tradesman, plasterer, last week who said that 70% of his time is now spent fixing amateur renovations.

I think we all need to be very careful of buying renovated properties.

And people considering renovating properties need to take care that they have the skills they need to do a good job

Cheers,

Aceyducey

 

[Rach]

Yeah, I suppose that is what my problem/question is- we are not sure exactly how to start out and which way to get to our goal.

Our plan is a long term one of buy and hold, and as you say Carolyn, we need to get this sorted before we can make any big decisions. Do we buy in a good area for later and create our "home" later when we have the experience and funds.... and a need for a larger home; or do we start getting into the IP mind now and live temporarily as we go???

We renovated a Victorian property in London (the professionals did the main work) and lived there throughout the whole process, and I don't want to do that again.... but I am not adverse to a bit of hard work. We also have a property in Melbourne (well, my partner put up the cash for that one, not me) so we are getting there slowly, but don't know where to start back in our home town!?!

Cheers,
Rach