Help Tula spend $700-$750K of the bank's money :)

[Tulamalula]

and please point out the flaws in my line of thinking .. I want to maximise our PPoR's equity and put it to work.

Option 1: buy in Brisvegas

Buy a house 7k from city in brisbane, character home on 600sqm - high $500s. We have $80K in PPOR mortgage we can draw down on to do cosmetic reno if we felt like it, to increase rent, but as it is, the place rents as one house for $450 week or 2 flats at $500. I've crunched the numbers on purchase price of $620,000 we'd be putting in $700 month of our own money, we we can easily afford.

Am I wasting $80-$100K equity we could put to good use?

If so, is this a bad thing?

Plan would be to rent for a few years, and when we have more time and more equity on both the PPoR and this house, borrow $200K, do a big reno, and sell - renoed character homes in the area are going for well over $1.2million

If sell, then have to pay capital gains. Hmmm.


Option 2: Buy in Perth

Buy house on 800sqm block in Forrestfield around $400-420K - income would gear it neutral.

This leaves $300K equity not being put to good use, however we could look at buying a second IP - house - further out from either Perth or Brisbane city, or unit closer in.

This way we have maximised our our equity, have a foot in two camps instead of one, and have 2 properties for CG instead of one, so if one area is a slow, the other may not be.


Decisions decisions - I need a nap.

 

[MTR]

I have another suggestion just to confuse you even more, upgrade your primary residence in Perth. Blue chip has been hammered and this way you get in on a low base, and if you can secure something, perhaps something that can be subdivided even better. No CGT. Just tap into the equity after a reno etc.


http://www.realestate.com.au/property-house-wa-north+perth-115831275
I posted this property in North Perth, Farmer Street, I know the person who purchased this, good buying, they will renovate the front and will be then building a very nice double storey at the rear, high specifications so I expect that will end up over $1.1M, that will then become their primary residence. They secured this purely by accident, right place at the right time.

Could do something similar in Inglewood, the Avenues, there are some great duplex properties, period home, retain front, build rear. You will need to work hard networking to secure something like this, but well worth it if this suits your budget etc??

Alternatively, look at other areas close to city with similar options where you buy on a low and renovate, could this work for you. Obviously I don't know all your financials???

 

[willair]

Option 1: buy in Brisvegas

Buy a house 7k from city in brisbane, character home on 600sqm - high $500s. We have $80K in PPOR mortgage we can draw down on to do cosmetic reno if we felt like it, to increase rent, but as it is, the place rents as one house for $450 week or 2 flats at $500. I've crunched the numbers on purchase price of $620,000 we'd be putting in $700 month of our own money, we we can easily afford.
.

Just one small item to think about with the inner Brisbane rental property,are they listed as 2 flats or just a house?,because the numbers don't seem to level out between the flats and house plus do they have separate electricity meter,plus water meters already in place??..

The first cab off the rank would be ring the BCC and check,then ring any insurance company and get a quote on the house or flats better to ask those questions prior then find out later when you have a problem then find out the insurance wipes it all away like dunnie paper..imho..

 

[Tulamalula]

Willair, I would need to separately meter etc and get permission from Council, it rents as one house now and the numbers still add up nicely.

MTR - thanks, oh thanks.

I am pretty close to having overcapitalised on our house as it is. Details:

* paid $540K in 2007 - at the peak.
* 453sqm block.
* did an owner build extension of 100sqm which turned a 2 bed to a 4 bed.
* house is a 1950s psuedo art deco, it looks a cross between art deco and federation now, lots of leadlight. Quite a unique property as everyone is pulling down the character houses in Maylands and building McMansions.

Paid around $250 K all up on the reno - if you add in my painting time, and everything, so $540 plus $20K stamps duty plus $250K = $810K

We'd be lucky to get $900K clear if we sold now.

Mortgage left to pay is $300K or thereabouts.

Only just finished it last year, the place I set aside for future stairs up - and that's the only way we could go - has $10,000 worth of inbuilt cupboards - which I use and LOVE! Designed it so anyone else could pull them out down the track if they wanted to go up.

Can only go up and I refuse to cut into the new roof I only paid for 3 years ago.

Would have cracker river and city views if we went up though.

 

[wylie]

I'd be tempted to go up and capitalise on those "cracker river and city views". I do sometimes think that instead of buying the last IP we did, that we should have gone up another storey on our own PPOR to get panoramic city views.

We would never pay capital gains tax. We also would not be getting rent and would not have another house.

It is not an easy call. Should you add to your PPOR or buy a house that will fund your retirement. You can always sell the PPOR and downsize to fund your retirement. Or stay in your PPOR as it currently is, and buy an IP that one day will throw off rent to fund your retirement.

There is no right or wrong.

 

[Tulamalula]

I have to climb the roof again because some t*rd has just raised a house in the next street over, to get the cracker views of the city, and he may be a bit in the way. God a parent's retreat would be soooo nice. Hmmm, now where to put those stairs???

 

[Tulamalula]

But where that plan all falls down is that I would be paying for the extensions out of my own pocket, the aim here is to use the bank's money and have someone else pay off the loan.

 

[Tulamalula]

Then there's this in Cloverdale, http://www.realestate.com.au/property-house-wa-belmont-115881707

Buyers over $539K it's not a devvie block but it is on 850sqm, who knows in the future they may let you do a retain and build.

Needs a lot of work though, and it's only 2 bedroom, but has nice character features. 10k to city whereas Forrestfield is 15+ and doesn't have developments planned like Belmont has. Think I'll go take a look at it on the way to pick up the kids.

Where is Perthguy when you need him????

 

[D.T.]

Show me where you'd find a 800sqm property in Forrestfield for 400k?

My property is in forrestfield and worth more than that on 300sqm.

 

[perthguy]

Then there's this in Cloverdale, http://www.realestate.com.au/property-house-wa-belmont-115881707

Buyers over $539K it's not a devvie block but it is on 850sqm, who knows in the future they may let you do a retain and build.

Where is Perthguy when you need him????

I'm right here!

The problem with a future rezoning to allow retain and build is the ANEF contours. Unless they are changed, this will stay a single residential block... unless the WAPC policy of residential development within the ANEF contours is changed...

 

[perthguy]

Just buy a triplex potential site...

http://reiwa.com.au/Buy/Pages/More-...1&listingid=10425283&listingno=3427092&puid=0

"4 Bed 1 Bath" ... I wonder if the laundry could be converted into a second bathroom?

"Potential rent of around $420 per week" ... seems low for a 4 bed in that location. I wonder what the rent potential would be if it were nicely renovated?

 

[perthguy]

Or jump ahead a few years and buy the triplex...

http://reiwa.com.au/Buy/Pages/More-...1&listingid=10414905&listingno=3416703&puid=0

I wonder what the holding costs of the Inglewood triplex would be? I bet they all need renovating.

I can't find any comps for a rental comparison... and I don't have $1.7 million

 

[perthguy]

$580,000-$620,000 is more on the money. The last one in Chaffers St sold super quick. Under offer before the first home open.

http://reiwa.com.au/real-estate/morley/3428609

here is the "under offer" listing nearby:

http://reiwa.com.au/real-estate/morley/3418475

 

[INVSTOR]

Just buy a triplex potential site...

http://reiwa.com.au/Buy/Pages/More-...1&listingid=10425283&listingno=3427092&puid=0

"4 Bed 1 Bath" ... I wonder if the laundry could be converted into a second bathroom?

"Potential rent of around $420 per week" ... seems low for a 4 bed in that location. I wonder what the rent potential would be if it were nicely renovated?

I've just rented a 3x1 in Ashfield, no carport or garage, for $440/wk.
As is that would rent for - $460 to $480.

 

[Tulamalula]

Or I could put myself out of my misery, buy one of these - up the road from me - http://www.realestate.com.au/property-residential+land-wa-bayswater-200735899 put up a long skinny McMansion - would rent for $700 week easy.

http://www.realestate.com.au/property-residential+land-wa-bayswater-200735899

So I went to see 205 Leake Street - a LOT of work. Great block, near Belmay school, quiet street, shop around the corner, 2 planes flew over, hardly any noise from the front yard with an easterly blowing ... but

a cosmetic reno it's not, I'd rip off the sunroom, patio, carport, laumdry, second toilet- build half a McMansion behind (2 level), gut the inside, needs new kitchen and bathroom ... I could easily spend $200K there and it wouldn't be worth $750K

 

[D.T.]

Just buy something already

 

[Tulamalula]

Lol, and put you out of your misery Dave?

here's a $399er on 830sqm in Forrestfield for you.

http://www.realestate.com.au/property-house-wa-forrestfield-115541183

 

[D.T.]

Lol, and put you out of your misery Dave?

here's a $399er on 830sqm in Forrestfield for you.

http://www.realestate.com.au/property-house-wa-forrestfield-115541183

Quick hide it from my valuer

 

[Tulamalula]

there are a few of them, maybe I should grab one

 

[perthguy]

Just buy something already

na. I'm in the same boat. Looking at all options but not finding anything I would put an offer on. In 10 years of property investing, I have never been stumped before. I have always known exactly what to do... and done it!