Is this a good offer?

Didn't notice that for some reason. Definitely an outlier though and who knows what the inside looks like. I know people who are paying that for a 1 bedder there. Look at how much the other recently rented one went for. I think the "real" rent is somewhere in the middle.
 
cimbom said:
We are planning to renovate, live in it for 1.5 years and then rent it out. We have purchased an OTP property so will move into that once it is built. Seems like the renovation costs are likely to be very high though.
Click to expand...

If you are planning on living in it for that long then I would suggest you can probably make money out of it especially if you've done your homework and compared units around the area renovated and unrenovated. You should consider living in it (I've done this many times - its hard but worth considering) and doing it up while you are there. You won't be able to get any tax deductions for any depreciation report you get done while its your PPOR but once you move into your new apartment, you can start claiming and rent it out at a good price.
 
I put in offers for both properties and I will find out tomorrow. I think I may have better luck with the one that needs to be renovated. Fingers crossed :p
 
Just heard back from the REA regarding the one in need of renovation. Unfortunately, our offer was rejected which I was sort of expecting. As it has only been on the market for one week, the owner would like to wait and wants an offer much closer to the asking price. Bit ridiculous considering the state of the property and the amount that we'd need to spend to fix it up but what can you do. We're prepared to offer maybe 5-10k more but I don't think it'd sway them.

How much money do most of you aim to make with renovations? I was thinking $1 profit per $1 spent was reasonable but not sure.

I will find out about the other townhouse this afternoon but I'm not expecting that as the REA claimed to have got multiple offers and we were offering 30k below the price.

Back to the drawing board I think...
 
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No news from the other agent which is a bit rude but oh well. Now will sit and wait hoping that the first seller gets desperate and accepts our offer. If not, will look elsewhere.
 
Pay $360k

Renovation costs $55k
Holding costs for 6 months @ 7% $15k
Stamp duty on $360k say $12k

So far outlay is $442k for a unit worth maybe $412k

Now if you need to sell you will loose another $12k in commissions, advertising, extended holding costs so you will net say $400k for a $442 outlay... already you have overpaid by $42k, and there is no profit or risk return, say you want a $30k return for profit, risk, your time and stress.

So your $360k is about $70k too much to pay......
 
I offered 340k not 360. Reno is 45k. We will also not pay stamp duty as we are first home buyers. Holding cost doesn't bother me as I'm paying the same for rent now. I am planning to rent it out ($500/week+) not sell once our other purchase is complete.
 
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We will be able to apply for the first home buyers duty concession so we only have to pay $20 duty. As we're renting now, we would prefer to live in it if we purchase it and rent it out once our OTP purchase is built.

EDIT: The renovated one has just gone under offer
 
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This is really weird. The REA has just updated the listing with what is the 5th open for inspection within a week. So I'm guessing the vendor is in a big hurry to sell yet they didn't accept my offer or even put forward a counter-offer. Not sure how to approach it other than to sit and wait and hope they come back soon. I've already got detailed pictures of the renovated bathrooms etc in my head :p
 
cimbom, welcome to the club. I just had the same experience on a townhouse and villa - both needing 5-10k of reno. Going to be looking at another villa tomorrow which my mum and sister went and saw today.....Seems some people just buy even close to asking price regardless of the renovations needed.

What happened to the buyers market?
 
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