Looking to buy in Newtown

Innerwest

Innerwest

There is the potential to convert the attic into a 3rd bedroom as others have done in the area. How much value do you think this would add, would it be worth it?

Also, there is no carspace but I dont think this is a huge concern because of it's proximity to the main street (king) and transport. It's hard to know what the value of the proximity & having a park opposite is compared to other 2br, 1bth in the area (trying to do the numbers).
 
It's a great place, but as others have said - as its full renovated, you will be paying top dollar for this at auction. Think high 800s. The secret to CG growth in the inner west seems to be by doing your own reno. The problem I'm finding is that even the knock-em-down type properties that appear to be a dump, are very popular at auction and enthusiastic parties are paying well above average prices to secure them. When this happens, you have to consider the actual cost of the reno and whether it was actually worth to begin with. This I am slowly beginning to understand in the inner west.

The best way is to create a 2nd level, no doubt about it. It's just a matter of cost and whether you can handle that extra cost, lack of rent (usually) and interest during the time of construction.
 
Yes, unrenovated properties in the inner west often seem to go for more than renovated ones. There is still the mindset with many younger buyers in particular that an unrenovated place must be a better buy regardless of what they pay for it.
Renovations can often polarise people. I've seen people turned off a property because they didn't like the timber kitchen or the tiling in the bathroom, for example.
I think if I was looking I would see whether I could find a place with an ugly reno. I would check to see whether the rising damp had been addressed in the reno and whether the place had a new roof, wiring and plumbing etc. They are expensive things to do. The other stuff - kitchen cupboards etc - is cosmetic.
Scott
 
depreciator said:
Yes, unrenovated properties in the inner west often seem to go for more than renovated ones. There is still the mindset with many younger buyers in particular that an unrenovated place must be a better buy regardless of what they pay for it.
Renovations can often polarise people. I've seen people turned off a property because they didn't like the timber kitchen or the tiling in the bathroom, for example.
I think if I was looking I would see whether I could find a place with an ugly reno. I would check to see whether the rising damp had been addressed in the reno and whether the place had a new roof, wiring and plumbing etc. They are expensive things to do. The other stuff - kitchen cupboards etc - is cosmetic.
Scott
Click to expand...

Exactly my thoughts Scott. Kitchens and bathrooms are so cheap to install now than they were 10 - 20 years ago, that people can be easily fooled into the cosmetic finishes. New roofing, structural issues, wiring etc - these are the big ones that cost and take major time to repair that you hit the nail on the head. I gather a good building report will pick up all this.

Again, these suburbs in the inner west all have similar savvy buyers looking at shows like the Block, all with dollar signs in their eyes. Just need to buy cheap enough to make it work.
 
True enough, but for someone that just wants to secure an excellent property in an area so close to amenities (close to the Courty has to be a good thing !!). the proximity to King Street and transport - both train and bus has to add heaps of value. It seems that there is just the huge Camperdown Park over the road - the outlook must be superb! Newtown is really improving and gentrifying so quickly - if I was the vendor, I'd be looking for over $800k !

Cheers!
 
Great comments, thanks.

Prices are definitely on the rise in these areas at the moment making it hard to know how it will go at auction. Might have to consider other neighbouring suburbs.
 
Having never tackled a renovation anywhere myself; I don't feel like I'm qualified to throw a meaty opinion into the ring, but I will throw mine in anyway :)

Living in the inner west many years myself, I firmly believe that organic/market growth in the area has maxed out for some time. The renovation projects you speak of sound great on paper, but come attached with so much risk when playing in the inner west region. As others have mentioned, buyers are very picky, and I'm yet to be convinced the gains of such a project warrant the risk. I.e. buying a 'run down' property at $700K, and bringing it up, perhaps adding a bedroom and modernising it, to get to say an $850K sale price seems like a risk. You are carrying so much interest-heavy mortgage repayments for what will be (and let's be honest, assuming here you aren't a laborer yourself and are yet to have a network of trustworthy, quality, great-rate plumbers, electricians, gyprockers etc working for you), at least a 6-12 month project. That is a huge amount of time to hold such a mortgage and not get return on it during that time. Have you factored those holding costs into your P&L forecast?

All this, to sell to a picky buyer who gets agitated at even the smallest of things they do not like.

Rather, would it not be better to do your first project in an area half the buy-in rate. I'd argue the gains potential would be healthier - say 60-70% of what you'll get out of this potential project, but with half the investment and an easier-to-market-to potential buyer, who IS willing to negotiate with themselves on little features they don't like in favor of those they do like.

Maybe go for something like a rundown townhouse further out west at a buy-rate of say $450K, and aim to get a sale price of $520K or so?
 
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