Well, last week just settled on my 2nd property and first splitter block. Firstly a shout-out to Rolf L for organising the loan. Highly recommended.
Sorry for long read but too many info to convey
Bit of background on the suburb - Coopers Plains. Suburb wise its a great location, bit of industrial around but over the years these will go. Mid-ring Brisbane suburb. Within walking distance its got couple of train stations, buses, hospital, Griffith university x 2, aldi, shopping centre (not as big as Westfield but big enough), ANZ stadium, a new multi-million dollar building/precinct is being built next to hospital to combine the different state/national sciences departments - FSA/CSIRO, DPI, Health, etc . Very close to all major arterials (within 5-10 minutes can be on Ipswich motorway, SE freeway, gateway). Surrounded by very expensive suburbs......
BUT, more importantly was that i've already made my money from the site by buying low - its true what they say "you make your money when you buy" . Property was a deceased estate with poor/no marketing – there wasn’t even a For Sale sign out front and had chat with neighbours and even they didn’t know it was for sale. Double block (single title but 2 separate lots already) purchased for around median suburb price. Doing quick reno (might spend about 5-8k) then will rent out. Will get average yield of 4.5-5%.
Plan A) in a few years time sell off house and build 2 brand new properties
Plan B) remove house and sell off each lot individually
Plan C) worst-case scenario is buy-and-hold with view of doubling in 10 years
Could also do a combination of plans – build 2 sell one, sell one lot and build house, etc
I've placed some quick numbers below so everyone can learn from it.
Property type – 3x1x1 on 2x405m2 lots
Purchase price – 407k
Original asking price - 450k
Suburb median – 410k
Loan structure – 90% LVR with LMI + 24k LOC + 33k cash
Reno costs – 5-8k budgeted maybe
Rent – 350-400pw. Cheapest house rental on market at 340pw which is a rundowned property
http://www.realestate.com.au/cgi-bi...ched,House,Terrace,Villa,Warehouse&p=30&o=def
Land value – Double block land (exact same dimensions but without a house) down the road is going for 460k. Another 2 x 405m2 lots going for 239k each but these backs onto a railway line. Another 405m2 lot in next suburb??? is asking circa 300k.
http://www.realestate.com.au/cgi-bin/rsearch?id=coopers+plains&a=qfp&cu=fn-rea&t=lan&q=Go
Could do this straight away and will be in the money from the get go
New build – Won’t put full figures up as won’t be in the black from this scenario until house prices pick up a bit more or build costs go down (I doubt). But as a comparison would build 2 storey contemporary queenslanders. Several have gone up around and sell for 500-600k each – neighbours bought theirs new at 530k. A couple are on market for circa 550k. Turn key property build costs @ ~300k + ~210k per lot + holding costs means will be borderline at current build costs/house selling prices.
Will try and do a breakdown of holding costs if I have time/internet access whilst doing renos.
Sorry for long read but too many info to convey
Bit of background on the suburb - Coopers Plains. Suburb wise its a great location, bit of industrial around but over the years these will go. Mid-ring Brisbane suburb. Within walking distance its got couple of train stations, buses, hospital, Griffith university x 2, aldi, shopping centre (not as big as Westfield but big enough), ANZ stadium, a new multi-million dollar building/precinct is being built next to hospital to combine the different state/national sciences departments - FSA/CSIRO, DPI, Health, etc . Very close to all major arterials (within 5-10 minutes can be on Ipswich motorway, SE freeway, gateway). Surrounded by very expensive suburbs......
BUT, more importantly was that i've already made my money from the site by buying low - its true what they say "you make your money when you buy" . Property was a deceased estate with poor/no marketing – there wasn’t even a For Sale sign out front and had chat with neighbours and even they didn’t know it was for sale. Double block (single title but 2 separate lots already) purchased for around median suburb price. Doing quick reno (might spend about 5-8k) then will rent out. Will get average yield of 4.5-5%.
Plan A) in a few years time sell off house and build 2 brand new properties
Plan B) remove house and sell off each lot individually
Plan C) worst-case scenario is buy-and-hold with view of doubling in 10 years
Could also do a combination of plans – build 2 sell one, sell one lot and build house, etc
I've placed some quick numbers below so everyone can learn from it.
Property type – 3x1x1 on 2x405m2 lots
Purchase price – 407k
Original asking price - 450k
Suburb median – 410k
Loan structure – 90% LVR with LMI + 24k LOC + 33k cash
Reno costs – 5-8k budgeted maybe
Rent – 350-400pw. Cheapest house rental on market at 340pw which is a rundowned property
http://www.realestate.com.au/cgi-bi...ched,House,Terrace,Villa,Warehouse&p=30&o=def
Land value – Double block land (exact same dimensions but without a house) down the road is going for 460k. Another 2 x 405m2 lots going for 239k each but these backs onto a railway line. Another 405m2 lot in next suburb??? is asking circa 300k.
http://www.realestate.com.au/cgi-bin/rsearch?id=coopers+plains&a=qfp&cu=fn-rea&t=lan&q=Go
Could do this straight away and will be in the money from the get go
New build – Won’t put full figures up as won’t be in the black from this scenario until house prices pick up a bit more or build costs go down (I doubt). But as a comparison would build 2 storey contemporary queenslanders. Several have gone up around and sell for 500-600k each – neighbours bought theirs new at 530k. A couple are on market for circa 550k. Turn key property build costs @ ~300k + ~210k per lot + holding costs means will be borderline at current build costs/house selling prices.
Will try and do a breakdown of holding costs if I have time/internet access whilst doing renos.