Our first value add project in Melbourne

Firstly a big thank you for all of the information that is being shared on this forum. How easy it is to spend hours reading all of your posts.

I was hoping to get some advice more specific to my personal situation, to help steer us in the right direction.

My partner and I have decided to change strategy as we are not closer to meeting our goals of owning a PPR in inner city Melbourne (Clifton Hill). We have two properties (Gunnedah and Cessnock) which are cashflow neutral/positive but limited growth. Over the next few years we want to focus on doing value add projects to grow our capital/deposit.

We are currently researching a renovation strategy (buy reno sell):
Budget of $450 000 with $45000 for renovations
Goal of $40 000 minimum profit
It would be our PPR (we are currently renting) with the aim of having the renovation completed and property sold 6-9 months.
We would do some limited renovations (painting, removing of kitchens, garden/landscaping) but have trades people do the rest.

We are currently researching areas for this strategy to work. I work in Collingwood/husband in Coburg. We have excluded a number of suburbs due to affordability of houses.

Reservoir is within our budget, and has examples of renovated properties selling for >25% than unrenovated ones
Coburg north and Coburg are within our budget but in my research there does not seem to be clear precedence of previous renovated properties selling for much more than unrenovated properties. The same goes for heidelberg heights and west. Is this accurate?

Since many of you have made money from renovations and understand this strategy better than we do, any suggestions regarding areas where I should be directing my focus?

How do you feel about Reservoir in terms of achieving profit from this strategy?

Any other suggestions?
 
IMO I think Reservoir would be the way to go as a local in the Thornbury area I have seen my PPOR increase in price as the ripple effect from nearby Northcote price growth has pushed up prices.Reservoir has some great positives I believe.
Good transport links-Ring road,tram,train/bus services,close to major shopping area(Northlands)schools & uni(Bundoora)

Cheers

Coota
 
Before proceeding, do your figures very, very, very carefully.

I've seen number of people try to employ this strategy in Melbourne. In most cases, those who did make a profit did so in a hot market, where they may have made similar profits by simply buying and selling without the renovation. Indeed, given the buying and selling costs, many people don't sell so quickly because they realize that they'll end up loosing money in the process.

Renovation strategies do tend to add rental value however.
 
Thanks for your advice. I agree, we do need to become area experts first and be confident with our numbers before buying. We are in the early stages only but reservoir is looking good so far.
 
Dont forget buying and selling costs. Your $40k profit would be gone instantly

Firstly a big thank you for all of the information that is being shared on this forum. How easy it is to spend hours reading all of your posts.

I was hoping to get some advice more specific to my personal situation, to help steer us in the right direction.

My partner and I have decided to change strategy as we are not closer to meeting our goals of owning a PPR in inner city Melbourne (Clifton Hill). We have two properties (Gunnedah and Cessnock) which are cashflow neutral/positive but limited growth. Over the next few years we want to focus on doing value add projects to grow our capital/deposit.

We are currently researching a renovation strategy (buy reno sell):
Budget of $450 000 with $45000 for renovations
Goal of $40 000 minimum profit
It would be our PPR (we are currently renting) with the aim of having the renovation completed and property sold 6-9 months.
We would do some limited renovations (painting, removing of kitchens, garden/landscaping) but have trades people do the rest.

We are currently researching areas for this strategy to work. I work in Collingwood/husband in Coburg. We have excluded a number of suburbs due to affordability of houses.

Reservoir is within our budget, and has examples of renovated properties selling for >25% than unrenovated ones
Coburg north and Coburg are within our budget but in my research there does not seem to be clear precedence of previous renovated properties selling for much more than unrenovated properties. The same goes for heidelberg heights and west. Is this accurate?

Since many of you have made money from renovations and understand this strategy better than we do, any suggestions regarding areas where I should be directing my focus?

How do you feel about Reservoir in terms of achieving profit from this strategy?

Any other suggestions?
 
IMO I think Reservoir would be the way to go as a local in the Thornbury area I have seen my PPOR increase in price as the ripple effect from nearby Northcote price growth has pushed up prices.Reservoir has some great positives I believe.
Good transport links-Ring road,tram,train/bus services,close to major shopping area(Northlands)schools & uni(Bundoora)

Cheers

Coota

My understanding is that Reservoir in particular development sites have had incredible growth over the last 6-12 months. Many builders jumping in which is pushing the prices up.
 
It’s a large suburb seems to go on forever, it is serviced by 3 or 4 train stations
Keon Park, Ruthven, Reservoir, and Regent.. and yep... heaps of town-houses going up.
 
It?s a large suburb seems to go on forever, it is serviced by 3 or 4 train stations
Keon Park, Ruthven, Reservoir, and Regent.. and yep... heaps of town-houses going up.

Yep, i've always thought you could fit 4-5 suburbs within it. There's good pockets and a lot of bad pockets.

Oscar
 
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