Hi all,
Just have been crunching some numbers and was hoping I could get some input on them please.
One property I am looking at atm is a 2br bv on 700sqm of land with a bungalow out the back. Currently the bangalow is set up like a spa type thing with a big spa in the middle room, a steam room and shower in the left room and a massage table in the right. All very dodgy looking but that is none the point.
What I am thinking is to turn the bungalow's 3 rooms into two bedrooms, one on each end, and the middle room as a 2nd bathroom/laundry.
The main house currently has 2 bedrooms, one living area, a large new kitchen and a bathroom. the current laundry is in the work shop which is entered by the back garden which i will rip the guts out and fix it up as a 2nd living area.
Then the property will have 2 bathrooms, one with laundry, 2 living areas and 4 double bedrooms with a large new kitchen.
The actual reno (re-paint entire place inside, fix up outside including new bathroom (plumbing connected) and fix up workshop) I am expecting to cost ~ $10-20k.
The block I should be able to get for ~ $270-280k making it $280-290k all up. Then I can rent out the rooms to students @ $100/each so yield would be ~6.7%.
The idea is then to hold the block for 3-4 years while it pays for itself and then develop.
Whilst the land is a decent size there is a vic road overlay on the property, but it isnt too bad as one house a few doors down just build 3 on the same size block - which is what i am thinking.
a 3 bedroom townhouse at the front with 2 x 2br villas at the back.
If i factor it all in today's dollars at $140k each build including capitalising interest and the cost of the block + original reno it comes out at $735k.
So if i sell each at an average of $300k then it will be a $140k profit after agents fees.
Does this sound like a good deal? My reasoning is that it will cost me $0 to hold once i do the reno, and then by the time I develop in 3-4 years time even if prices don't move I make $140k pre tax.
Looking forward to your comments. I am not really sure on the cost of construction. A 2 level 3 bedroom townhouse and 2 single level 2br villas is what I am after - so i thought $130k build each + $10k in other.
Thoughts?
Cheers
Ben
Just have been crunching some numbers and was hoping I could get some input on them please.
One property I am looking at atm is a 2br bv on 700sqm of land with a bungalow out the back. Currently the bangalow is set up like a spa type thing with a big spa in the middle room, a steam room and shower in the left room and a massage table in the right. All very dodgy looking but that is none the point.
What I am thinking is to turn the bungalow's 3 rooms into two bedrooms, one on each end, and the middle room as a 2nd bathroom/laundry.
The main house currently has 2 bedrooms, one living area, a large new kitchen and a bathroom. the current laundry is in the work shop which is entered by the back garden which i will rip the guts out and fix it up as a 2nd living area.
Then the property will have 2 bathrooms, one with laundry, 2 living areas and 4 double bedrooms with a large new kitchen.
The actual reno (re-paint entire place inside, fix up outside including new bathroom (plumbing connected) and fix up workshop) I am expecting to cost ~ $10-20k.
The block I should be able to get for ~ $270-280k making it $280-290k all up. Then I can rent out the rooms to students @ $100/each so yield would be ~6.7%.
The idea is then to hold the block for 3-4 years while it pays for itself and then develop.
Whilst the land is a decent size there is a vic road overlay on the property, but it isnt too bad as one house a few doors down just build 3 on the same size block - which is what i am thinking.
a 3 bedroom townhouse at the front with 2 x 2br villas at the back.
If i factor it all in today's dollars at $140k each build including capitalising interest and the cost of the block + original reno it comes out at $735k.
So if i sell each at an average of $300k then it will be a $140k profit after agents fees.
Does this sound like a good deal? My reasoning is that it will cost me $0 to hold once i do the reno, and then by the time I develop in 3-4 years time even if prices don't move I make $140k pre tax.
Looking forward to your comments. I am not really sure on the cost of construction. A 2 level 3 bedroom townhouse and 2 single level 2br villas is what I am after - so i thought $130k build each + $10k in other.
Thoughts?
Cheers
Ben
