Hey guys,
I thought I might put my thoughts out for consideration.
I have just bought my PPOR in hope island with help from my parents. The property is a house and these are a few background details:
- 4 bed, 2 bath, 2 car
- cost price of $473,000 (Land $249,000 and house $224,000) - 17k FHOG + QLD Boost (of which I expect to spend at least 10k-15k on additional luxury items)
- 400sqm block with 14m frontage
- 22 square house
- bunch of extras including appliances, stone benchtops, other luxury finishes, etc.
- meets fairly strict covenant for estate - fully rendered, colorbond roof, etc.
- body corporate rates of $40-50 a week for the maintenance of the open public space and waterfront walkways (including free gas bbq parks), 25 meter heated lap pool, function room, use of the two public marina berths for short periods in estate's marina, gym and poolside BBQ area (which dates can be booked for exclusive use for no charge).
- current rental of similar properties has been between 450-520 over the last few months.
Construction of the property is expected to begin early 2012 and finish within a few months - then the plan is for my girlfriend and I to move in there. I would expect to be living there for 3-6 years before upgrading - at such time I would either sell the property and redirect profit towards new PPOR and hopefully deposits on 1 or 2 IPS. The other option would be to convert into investment property for at least 6 years and then sell for CG exemption or rent and hold forever and borrow against equity/income for deposits on future IPs.
Now here to the point where I would appreciate your opinions. I am seriously considering changing the layout of the property from 4 bed to 3 bed - removing the 4th bed/study wall to create a dining room adjacent to the kitchen and the new room will have additional sliding doors out to the alfresco which will open out the plan a lot more for both inside and out, as well as additional natural light and hopefully feel like a bigger house - this new additional space would than allow me reduce the living room by 0.5-0.7m in order for the master bedroom to receive this extra space. Ultimately the house will become 3 bed, 2 bath, 2 car - but I believe a much better layout for the limited 200 sq m of size. Besides there is no reason for me to have 4 bedrooms as it will just be my girlfriend and I and children are a long way off.
Now at risk of sounding like a spoiled brat and coping bullets from all directions - 200 sq m seems fairly small to me to fit a 4 bed house into - I might just have my mind out of proportion due to living in my parents house which is about 4x this. Again if the master bedroom is left unchanged dimensions will be 3.6 x 3.3 (not including ensuite + small WIR) which again seems small. Are these dimensions fairly small or have I just been ruined already?
I have heard that number of bedrooms is one of the most important factors for potential buyers and renters of properties. Will my removal of 1 bedroom lose value because of this? Or will it even add value as it opens up the space with designated dining room? Or no change at all? Will I lose rent if I decide to rent it in the future and do I really limit the potential tenants?
Hope Island still has a predominantly older demographic so maybe removing a bedroom wont have such a significant effect as an older couple down sizing may not want 4 bedrooms?
Another factor is I am planning on spending a fair amount of money of luxury extras such as stone features to pillars, glass splash back, outdoor built in bbq area with piped gas/water, higher ceilings, ducted air con,etc.
So my thought was that maybe if the house was at a really high standard it might stand out from the street because of these extras and the 4th bed may not matter?
The other side of the coin is my girlfriend and I really want to enjoy living in this property and economically from a property investors perspective it may not be the best option but we want the lifestyle extras even if it costs a bit more. I am just wondering if some of these costs will be lost and not made back if we go to sell/rent in the near future (5years or so).
My parents are encouraging me to put in the extras and enjoy the house with my girlfriend but I am still slightly unsure if I would be better in the long run for not doing this - financially I will not struggle to make payments on the house.
I would really appreciate any comments on whether you think these luxury options and removal of bedroom will have an effect on the value of the property in the short-medium future.
Cheers,
Thanks for taking the time to read through such a long post - after writing it I understand my thoughts a bit better.
YPG
Edit: on a side note I am pretty happy with the package as I have just found out that the lakefront lots (with no water access) are now selling for 340k and the canal front lots are now selling for 560k - both are similiar size land of 400-500 sq m and although mine is a dry block I am pretty stoked I can get a house+land for the price I did.
I thought I might put my thoughts out for consideration.
I have just bought my PPOR in hope island with help from my parents. The property is a house and these are a few background details:
- 4 bed, 2 bath, 2 car
- cost price of $473,000 (Land $249,000 and house $224,000) - 17k FHOG + QLD Boost (of which I expect to spend at least 10k-15k on additional luxury items)
- 400sqm block with 14m frontage
- 22 square house
- bunch of extras including appliances, stone benchtops, other luxury finishes, etc.
- meets fairly strict covenant for estate - fully rendered, colorbond roof, etc.
- body corporate rates of $40-50 a week for the maintenance of the open public space and waterfront walkways (including free gas bbq parks), 25 meter heated lap pool, function room, use of the two public marina berths for short periods in estate's marina, gym and poolside BBQ area (which dates can be booked for exclusive use for no charge).
- current rental of similar properties has been between 450-520 over the last few months.
Construction of the property is expected to begin early 2012 and finish within a few months - then the plan is for my girlfriend and I to move in there. I would expect to be living there for 3-6 years before upgrading - at such time I would either sell the property and redirect profit towards new PPOR and hopefully deposits on 1 or 2 IPS. The other option would be to convert into investment property for at least 6 years and then sell for CG exemption or rent and hold forever and borrow against equity/income for deposits on future IPs.
Now here to the point where I would appreciate your opinions. I am seriously considering changing the layout of the property from 4 bed to 3 bed - removing the 4th bed/study wall to create a dining room adjacent to the kitchen and the new room will have additional sliding doors out to the alfresco which will open out the plan a lot more for both inside and out, as well as additional natural light and hopefully feel like a bigger house - this new additional space would than allow me reduce the living room by 0.5-0.7m in order for the master bedroom to receive this extra space. Ultimately the house will become 3 bed, 2 bath, 2 car - but I believe a much better layout for the limited 200 sq m of size. Besides there is no reason for me to have 4 bedrooms as it will just be my girlfriend and I and children are a long way off.
Now at risk of sounding like a spoiled brat and coping bullets from all directions - 200 sq m seems fairly small to me to fit a 4 bed house into - I might just have my mind out of proportion due to living in my parents house which is about 4x this. Again if the master bedroom is left unchanged dimensions will be 3.6 x 3.3 (not including ensuite + small WIR) which again seems small. Are these dimensions fairly small or have I just been ruined already?
I have heard that number of bedrooms is one of the most important factors for potential buyers and renters of properties. Will my removal of 1 bedroom lose value because of this? Or will it even add value as it opens up the space with designated dining room? Or no change at all? Will I lose rent if I decide to rent it in the future and do I really limit the potential tenants?
Hope Island still has a predominantly older demographic so maybe removing a bedroom wont have such a significant effect as an older couple down sizing may not want 4 bedrooms?
Another factor is I am planning on spending a fair amount of money of luxury extras such as stone features to pillars, glass splash back, outdoor built in bbq area with piped gas/water, higher ceilings, ducted air con,etc.
So my thought was that maybe if the house was at a really high standard it might stand out from the street because of these extras and the 4th bed may not matter?
The other side of the coin is my girlfriend and I really want to enjoy living in this property and economically from a property investors perspective it may not be the best option but we want the lifestyle extras even if it costs a bit more. I am just wondering if some of these costs will be lost and not made back if we go to sell/rent in the near future (5years or so).
My parents are encouraging me to put in the extras and enjoy the house with my girlfriend but I am still slightly unsure if I would be better in the long run for not doing this - financially I will not struggle to make payments on the house.
I would really appreciate any comments on whether you think these luxury options and removal of bedroom will have an effect on the value of the property in the short-medium future.
Cheers,
Thanks for taking the time to read through such a long post - after writing it I understand my thoughts a bit better.
YPG
Edit: on a side note I am pretty happy with the package as I have just found out that the lakefront lots (with no water access) are now selling for 340k and the canal front lots are now selling for 560k - both are similiar size land of 400-500 sq m and although mine is a dry block I am pretty stoked I can get a house+land for the price I did.