$ per sq m or not?

[Property Meister]

Didn't know how to word the title, but here it goes,

3 properties, assuming, residential, same suburb, next door to eachother, identical in every way except for the following.

POLL QUESTION
No 1: 700sqm with one shabby house (Say worth $300k)
No 2: 1050sqm with one shabby house

Just FYI, 1050sq = exactly 1.5 times 700sqm
and
$450k = exactly 1.5 times $300k

And please do a follow up comment if No 2 had one shabby house with a shabby unit/bungalow in the back that can be rented.
I have always wondered this, as when a tenant is looking for a house, they normally look at the house, design, whether it has a yard etc. etc.but a slightly larger piece of land, they probably won't be willing to pay extra for it, and how does this equation change if there is a unit/bungalow at the back, it makes it more inconvenient for the house in the front, but offset by rental income. However, if there is no unit/bungalow, it will still cost to build one, no matter how shabby

so catch 22's all around

 

[Collector]

I chose greater than $450k simply because property 2 has greater potential.

 

[Belu]

depends what you can do with it.

Depending on the suburb, the 700sqm block could be a 2 unit site and the 1050 a 4 unit site.

Or, the 700 could be a 3 and the 1050 a 4.

to me this is what i would be looking at.

 

[LynnH]

I'm with belu - it depends on the individual properties and what you can do with them. I would think that the larger block would be better value in most instances.

Cheers
LynnH

 

[craigb]

I got the poll question "SORT OF!"
For me ! i can only add another bedroom if there is a larger land content, say i purchare a 3x1, and turn it into a 4x2, i need land for this,

 

[HiEquity]

It all depends on the rental yield - whichever one would give you a better net yield on your total investment would be my answer...

 

[Property Meister]

I see everyones points about being depending on yields etc.

however, im looking at this property its about 1.5 times the size of the average one, the price is about 1.5 times the average, there is a house at the front, which is quite shabby but ok, and there is a unit/bungalow out the back, this is also quite shabby but is rentable, based on average market rents the yield with these 2 properties is also about the market rate...

so the thing I was pondering is the following
- all the work (well the basic work) has been done, so its sort of factored in to the price, however, if rents/prices rise, since there is 2 properties, they should rise faster
- alternatively, if either or both need to be torn down, then that'll cost extra $$$ compared to a block of land with only one property
- should I renovate/rebuild the house, the shabby thing at the back will bring the prices down for the front as its an eyesore
- should I build a nice unit out at the back, the front one unless its also done will bring the prices down as well.
- hypothetically, building an average unit at the back might cost anything between say $80k-$150k, so having a shabby unit there, although it won't be worth as near as 80-$150k, is still $$$ saved....

im confused...