I already have one investment property which was formally our family home. We upgraded 3 years ago. Both homes have substantially appreciated in value since then.
I have been looking for the last 4 months to acquire a second investment property and in fact have signed a contract to purchase a 3 br, 1 bath, extra toilet in laundry, 1 DLUG, 1 Carport, home on 704 sqm in Cleveland Qld, 500 metres from the centre of Cleveland and the over 50s Leisure centre. I had worked hard at building a rapport iwth a Real Estate Agent. I told them that this would not be a one off, that I wanted to buy and hold, and buy, renovate and sell properties over the vext 10 years. With a long term goal of developing a site.
I was told by the REA the property zoned Res B with potential to re-develop as 3 units. Rent would be $240-$250 pw. Yes I hear you all saying - you trusted a real estate agent?? Just as we signed the contract he advised the property is Res A.
In fact after some investigation today it will probably only rent for $210-$220pw and the land content is not large enough for mutliple dwellings even if it is re-zoned Res B which is unlikely.
Property valuations from two independent sources state property value is between $215k - $235k, The property was last sold in March 2001 for $168,000 and based on growth in the Cleveland area (which has been exceptional high over the past 12 months) these estimates seem to be pretty accurate. Some upgrades have been done to the property which would not have been included in the valuations, such as, a new kitchen and bathroom air-con, new tiled "high traffic" areas. However, fences and pergola need replacing and the inside needs repainting at a minimum.
Even with all of that I think the property has potential if purchased at the right price around $240k, however, the contract is for $270,000.
I thought I had done all my homework. Ooohhh but what a learning curve this has turned out to be over the past 2 days The lessons too many to list here.
I will be using my cooling off period to terminate the contract.
Your comments would be appreciated.
JoanneL.
I have been looking for the last 4 months to acquire a second investment property and in fact have signed a contract to purchase a 3 br, 1 bath, extra toilet in laundry, 1 DLUG, 1 Carport, home on 704 sqm in Cleveland Qld, 500 metres from the centre of Cleveland and the over 50s Leisure centre. I had worked hard at building a rapport iwth a Real Estate Agent. I told them that this would not be a one off, that I wanted to buy and hold, and buy, renovate and sell properties over the vext 10 years. With a long term goal of developing a site.
I was told by the REA the property zoned Res B with potential to re-develop as 3 units. Rent would be $240-$250 pw. Yes I hear you all saying - you trusted a real estate agent?? Just as we signed the contract he advised the property is Res A.
In fact after some investigation today it will probably only rent for $210-$220pw and the land content is not large enough for mutliple dwellings even if it is re-zoned Res B which is unlikely.
Property valuations from two independent sources state property value is between $215k - $235k, The property was last sold in March 2001 for $168,000 and based on growth in the Cleveland area (which has been exceptional high over the past 12 months) these estimates seem to be pretty accurate. Some upgrades have been done to the property which would not have been included in the valuations, such as, a new kitchen and bathroom air-con, new tiled "high traffic" areas. However, fences and pergola need replacing and the inside needs repainting at a minimum.
Even with all of that I think the property has potential if purchased at the right price around $240k, however, the contract is for $270,000.
I thought I had done all my homework. Ooohhh but what a learning curve this has turned out to be over the past 2 days The lessons too many to list here.
I will be using my cooling off period to terminate the contract.
Your comments would be appreciated.
JoanneL.