Buy, Renovate and sell.

S

Suraj

Hi, every one I would like to know about the strategies and ideas to buy, renovate and sell property just to make 20K in each property in Sydney. My idea is to buy propery 200K to 300K, renovate it and sell to make 20K net profit. Is it possible? If yes pls advise where to buy and what sort of property to buy so that value can be added and profit can be made. I want to start from small project and grow up slowly to bigger one. Any ideas and advice, really appreciated.

Suraj
 
An interesting thread. In this market be careful what you buy as reselling may not be as easy as in a rising market.

There is an article in the latest Australian property investor which talks about a bloke who does this. He partners with another person, one supplying the cash and the other does the work.

So to get a net of $20k on $250 purchase does that mean the gross needs to be $60k before costs and cgt excluding Reno costs?

Check out nathans posts he has some good info.
 
suraj

If it was easy everyone would be doing it.
At this particular time I think it is a risky thing to do because the market could stagnate or fall and you would be lucky to get your money back.

Let's look at some numbers
$200K property
+$10K stamp duty and other expenses,
+$20K for the reno
+$5K for loan expenses & holding costs
+10K to resell it
=$245K Actual cost

You'll need to sell it at $265K to make $20K which after tax will be something like $12K net profit.
That's if the market doesn't fall in the meantime....
The buying and selling process could take you 3-4 months to complete and considering the small profit I think you'll probably be better off getting a 9-5 job instead.
 
Making $$$ isnt as easy in au as property ladder might seem for the uk. Stamp duty and agents fees make it much harder to make good $$$.

Can be done but in a falling market be very careful
 
I do it, and i love it.

It requires a lot of research, you need to select areas and know the market well, and you must be very familiar with how banks & valuers operate, and best of all you must have building knowledge.

When you put all this together you make profit.

I do large scale renovations, full inside and outside plus additions.

Some people only paint the house, and change kitchen and they sell it as renovated house, personally i hate this strategy, if you are going to do it, do it properly.




Its hard work.
 
veseli said:
Some people only paint the house, and change kitchen and they sell it as renovated house, personally i hate this strategy,
Click to expand...

I love this strategy - just not the 'sell' part.
A minor reno to improve cashflow, and equity to fund the next purchase!
 
locko24 said:
I love this strategy - just not the 'sell' part.
A minor reno to improve cashflow, and equity to fund the next purchase!
Click to expand...

Same. My latest IP settled 4 weeks asgo yesterday. Bought for $310k, spent $5k on a spruce up reno. Its had a nice reno done and is now leased as of yesterday afternoon for $385pw.

Reval should come in around $340-350k, which will fund the next purchase!
 
I've bought three houses now that were in such poor condition they were barely liveable, and restored them to reasonably nice houses. One less nice than the others because that general area is less nice and there was no point overshooting the local market.

Not for the faint hearted, takes a long time if you aren't a big beefy tradie, and not something I'm planning to do again unless something REALLY good pops up. But, given that you can often get these places at land value or below because so few people want them, its an interesting tactic.

At the moment though I'd prefer getting a house on a large block or a large vacant block, subdividing and building.
 
Suraj I guess its all about research and buying well. As BV said make sure you do your numbers and always have a buffer. Think about how your going to do the renovations and what it is going to cost you. I know doing a small reno at my place that things can add up quickly and trades don't always turn up on time. So you need to add that into your costs.

Good luck
 
This is a very good post on this topic. Anyone starting out should read it. Then read it again. I agree building "knowledge" is required but u don't need to be a builder or on the tools (in my view). All the other bits are important.

veseli said:
I do it, and i love it.

It requires a lot of research, you need to select areas and know the market well, and you must be very familiar with how banks & valuers operate, and best of all you must have building knowledge.

When you put all this together you make profit.

I do large scale renovations, full inside and outside plus additions.

Some people only paint the house, and change kitchen and they sell it as renovated house, personally i hate this strategy, if you are going to do it, do it properly.


Its hard work.
Click to expand...
 
knightm said:
... I agree building "knowledge" is required but u don't need to be a builder or on the tools (in my view).
Click to expand...

Paying other people to do the work is VERY expensive. Get trades in to do the work that requires licenses, and do the rest yourself to save money: that's where the profit is.

A $15,000 kitchen is about $5,000 to install yourself.

I asked my local glazier how I can reduce the price, because I had a lot of stuff to do, and he said to bring the items in so it can be worked on in the shop, and have the old glass completely removed and all old putty and stuff cleaned out so it's ready for the new glass to just drop in. Price went from about $80 to $30.
 
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