Hi all.
Well as some would know i have started the development of my last purchase and it should see excellent returns so very happy with that end.
Now problem being my first IP purchase. While i purchased in 07 at a reduced price from 04 values. I believe it is worth less again and im not sure what to do.
property
2 bed double garage fully renovated 50 yo home in central regional city location ( shoalhaven)
$295,000 purchase
$300,000 Loan fixed
rent $265 pw
About $90 pw out of pocket after tax pw including all expenses.
Good points
Low maintenance due to the $100,000 plus reno
Good depreciation for a 50 YO house
Central cbd location in high demand for rental. 200 meters to cbd
chance of commercial rezoning in the future that could double rents.
Bad points
2 bedroom ,2 bedroom,2 bedroom
No cheap add value potential due to big dollar reno in 05.
Significantly negative geared
While i fully understand that property is a long term investment i still feel i should do something with this one. I have a few options.
1# Sell and purchase another property
This is a viable option but the total transaction costs would run around $30,000 plus i would be looking at a sale price of $280,000 at best.
2# Add granny flat.
Space would be tight for parking but once again an option. should achieve around $250 for main house and $170 for granny flat.
Cost to build around $70,000 i would think. could run higher if keeping with original house theme/quality.
3# Add two bedrooms and bathroom.
This is my first option as this was the original owners plan and had designed house with this in mind. $40,000 to build and rent should improve from $265 up to $345.
4# Hold on and sell when i can cut my losses in future
5# Make PPOR as it is a really nice house that i would love to live in.We plan to sell our current PPOR in coming years due to a number of reasons.
So in a nut shell i am not happy to leave it as is for the long term. Making it a 4 bedroom or 2 bedroom with granny flat would change things allowing it to achieve better returns and capital gain long term but a 2 bedder just aint cutting the mustard for me.
Anyone have any thoughts ???
Well as some would know i have started the development of my last purchase and it should see excellent returns so very happy with that end.
Now problem being my first IP purchase. While i purchased in 07 at a reduced price from 04 values. I believe it is worth less again and im not sure what to do.
property
2 bed double garage fully renovated 50 yo home in central regional city location ( shoalhaven)
$295,000 purchase
$300,000 Loan fixed
rent $265 pw
About $90 pw out of pocket after tax pw including all expenses.
Good points
Low maintenance due to the $100,000 plus reno
Good depreciation for a 50 YO house
Central cbd location in high demand for rental. 200 meters to cbd
chance of commercial rezoning in the future that could double rents.
Bad points
2 bedroom ,2 bedroom,2 bedroom
No cheap add value potential due to big dollar reno in 05.
Significantly negative geared
While i fully understand that property is a long term investment i still feel i should do something with this one. I have a few options.
1# Sell and purchase another property
This is a viable option but the total transaction costs would run around $30,000 plus i would be looking at a sale price of $280,000 at best.
2# Add granny flat.
Space would be tight for parking but once again an option. should achieve around $250 for main house and $170 for granny flat.
Cost to build around $70,000 i would think. could run higher if keeping with original house theme/quality.
3# Add two bedrooms and bathroom.
This is my first option as this was the original owners plan and had designed house with this in mind. $40,000 to build and rent should improve from $265 up to $345.
4# Hold on and sell when i can cut my losses in future
5# Make PPOR as it is a really nice house that i would love to live in.We plan to sell our current PPOR in coming years due to a number of reasons.
So in a nut shell i am not happy to leave it as is for the long term. Making it a 4 bedroom or 2 bedroom with granny flat would change things allowing it to achieve better returns and capital gain long term but a 2 bedder just aint cutting the mustard for me.
Anyone have any thoughts ???