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Smartest move tho would have not to have been dazzled by smooth marketers that purport to know more than others.
correct Pete... it is all care taken but no responsibility. Hence why it is such a beautiful business model for them, escpecially if you throw in some success fees. A risk free revenue stream and the worst that happens is you have some name calling and walk away
Hi AL,
Great to see you back, hopefully for more than a cameo. Your opinions are missed by myself and I'm sure many others.
In hindsight, how would an investment in that property of yours gone if you had not developed it, ie just kept the fixer upper with the land content??
I know a property you asked me about in Mulgrave, across the road from where we owned, has gone from $250k in 2005 to about $400k not so long ago.
bye
I think a cream brick 60s home in Mulgrave would have been a far better purchase. Actually buying just about any single family home on a block of land serviced with public transport would have been a better choice ( even doing nothing would have been 1000% better).
The biggest mistake I believe I made was not pulling the plug when the soil tests indicated problems, and if I had pulled I think I could have escaped with a $10K loss and a good lesson.
BTW The value of tear down homes in Chelsea, Paterson Lakes have also increased from $250K to $400K+ in the same time , so the land is worth more. The cost of building development in Melbourne has also increased as dramatically. Pity the unit I still own hasnt reflected that increased costs.
Interesting to note Petes comment about the architect who might project manage a development was thinking about developing my single home IP in Elsternwick, the architect suggested cost to develop into 2*two story 3 BR units was quoted at 1.1M for the construction alone. After getting up off the floor the architect suggested he could be my "partner"...which means I give up 1/2 my land and some cash and he keeps one of the two units! ...I take all the risk, provide most of the capital and it appears I give up 1/2 the value of the end result! So that is some project management fee!...needless to say I politely declined!
Hi AL,
You are just adding to my opinion that the Jan Somers way of buy and hold when you can afford it, is best.
What have you been up to in the last couple of years?? or did the missus pull the plug put the kybosh on the investment thingy for a while???
We sold a couple of IP's late last year, shot a dog and took profit on the other one. I'm currently cashed up and looking for opportunities.
bye
Hi stumunro,
No I haven't dabbled into development. However we have a property on a large block which would lend itself that way. We decided to renovate the existing house.
I'm sure for people involved in the building game as well as others that have the time to be fully involved, it can be quite profitable.
My opinion is that it comes closer to the 'job' category rather than the 'investment' category and examples like the experience of AlwaysLearning are evidence.
bye
Hi AL,
Great to see you back, hopefully for more than a cameo. Your opinions are missed by myself and I'm sure many others.
I would agree that development is a different kettle of fish indeed. It IS more stressful (at least for me) and you are gambling on a future market (end value, interest rate climate and rents). I was relatively lucky in that my end values were higher than aticipated as were the rents but I had not anticipated the subprime / credit crucnch and that has hurt some.
I will build again but I doubt as a profit venture. Personally I agree with SC than I can make much more money (with far les work and stress) timing the market.
I think I made 50% of the money I made on my entire development in about one third of the time on a single property in inner Melbourne bought at the right time of the market. Ironically it was an emotional / lifestyle purchase and I was not focusing on profit at all.
Personally I agree with SC than I can make much more money (with far les work and stress) timing the market.
Why not do both?I will build again but I doubt as a profit venture. Personally I agree with SC than I can make much more money (with far les work and stress) timing the market.
Why not do both? Cheers, Michael.
GOAnna, would be interested to hear what part of the development was stressful. Financing, the unknown future market, the builders, other?
I stand to "buy" a property worth $2.6M and pay only $2M for it being my development costs.
Except that I can't afford to buy $2M worth of completed properties with only $125K down. Also, I get the yield on $2.6M worth of property having only paid $2M for them.If you bought $2M of of well selected and located property in inner Melbourne in 2005, it could be worth as much as $3.5-$4M today...all passive CG, with no development. AND, a rental boom to go with it too.
My honest view is that you're putting a lot of time and money on the line for a relatively small equity gain...