Is it worthwhile to turn a residential property for commercial use?

[ycdfdyan]

I have a main road property at Hawthorne, Brisbane. The property is about 40 years old and will need some immediate renovation so I can increase the rent to make it positive gear. The property is zoned LMR2 but I am not at the stage of developing it.

I noticed quite a few of my neighbouring properties have been rented out as offices, gym etc. All these properties are zoned either LMR or CR.

Our budget for renovation is 30k. Would it add more value to the property if I use the money on a MCU application rather than spending it on renovation?

Thanks everyone for your help!

 

[willair]

I have a main road property at Hawthorne, Brisbane. The property is about 40 years old and will need some immediate renovation so I can increase the rent to make it positive gear. The property is zoned LMR2 but I am not at the stage of developing it.

I noticed quite a few of my neighbouring properties have been rented out as offices, gym etc. All these properties are zoned either LMR or CR.

Our budget for renovation is 30k. Would it add more value to the property if I use the money on a MCU application rather than spending it on renovation?

Thanks everyone for your help!

I know a few people that have been investing in that street and a few streets back towards the river from about 1995 the entry price then was around 240k,a few have been rezoned,others just sitting on the properties
I would not waste the 30k on a reno the other way would add more value and give you anxiety free sleep at night..imho..

 

[Scott No Mates]

Spend the money on a repaint and necessary repairs to make it cg+

Who knows how long it will take to get the rezoning thru? Will the commercial zoning be any more beneficial to have the development upside rather than losing that?

If it were to be commercial then you'll still spend $ repainting, removing kitchen/installation of tearoom, possibly even accessible facilities. Tenant isn't going to pick up these costs unless it's a bargain rent.

In the meantime you will be hit for higher land tax once it's revalued by the OSR.

 

[RPI]

Don't rezone in QLD, just change of use. Since land tax is based on unimproved capital value then you have grounds to argue that an increase in UCV is based on use and this doesn't show up in OSR searches. BUT if your property happened to be one of the random choices for a drive by val then they will probably try. UCV is likely to increase in that area anyway with the new development across from the cinema consolidating it as decent little centre.

 

[ycdfdyan]

Thanks everyone for your help!

 

[ycdfdyan]

Don't rezone in QLD, just change of use. Since land tax is based on unimproved capital value then you have grounds to argue that an increase in UCV is based on use and this doesn't show up in OSR searches. BUT if your property happened to be one of the random choices for a drive by val then they will probably try. UCV is likely to increase in that area anyway with the new development across from the cinema consolidating it as decent little centre.

Thanks RPI!

My property is only a few houses away from the cinema. Do you reckon the MCU is likely to be approved by the council considering a lot of my neighbours have already done it? How long does this sort of application normally take (assume everything goes smoothly)?

Will this increase the value of the property when it comes to sell?

Thanks heaps for your help!

 

[RPI]

Hi

I would chat to a local commercial agent about it and see what rents and prices m/2 are.

Would have to have a decent formal look at it to see but at 1st glance it would be very achievable. It depends on who you get in Council, 3-6 months is normal, some drag on for a year but this would be very unlikely in your case. Have had many go through within the month recently.