Hi all,
Just want to get some feedback from people if anyone has done this "strategy" before and how it panned out and any advice they might share.
We bought a $1.5mil waterfront property to renovate and sell after 1-2 years, while living in it. The logic behind it (selfish reasons of waterfront living aside) is that you will put pretty much the same amount of EFFORT into a reno as you would on a $400k property (my partner is doing the reno himself, have been working in the field for over 5 years), and although the costs would be higher going after all the 5 star fixtures and fittings, you will end up with a much higher dollar figure profit, and tax free one at that.
The property here varies widely in price due to I believe waterfronts running on emotion rather than comparable sales. For example, the house 2 doors down where the agent told us he was expecting low twos fetched close to $3mil at the auction a couple of months ago. I would like to say that is what we are aiming for, but our land I think is worth $500k less. But still an ideal final sale price of $2.5m and very likely one of $2m is on the cards, and that is aside from any CG over the period (this year our suburb had 0.2% CG according to API so hoping for a greater one next year - southern Syndey). Also we would be in a position to simply refinance and capitalize interest while we wait for someone to "fall in love" with our property, we wouldn't be pressed to sell by a certain deadline.
So once again, looking for some advice from people who have done it in the past as a strategy, what to look out for, what to spend on, what to skimp on, etc. Also, is that saying true that waterfront properties grow faster than the suburb average (14% average as opposed to a usual 10% over a standard 7-10 year property cycle). We haven't had enough time or experience in the market yet to determine it ourselves. We have only been investing for the past 1.5 years and what a turbulent time it was indeed...
Just want to get some feedback from people if anyone has done this "strategy" before and how it panned out and any advice they might share.
We bought a $1.5mil waterfront property to renovate and sell after 1-2 years, while living in it. The logic behind it (selfish reasons of waterfront living aside) is that you will put pretty much the same amount of EFFORT into a reno as you would on a $400k property (my partner is doing the reno himself, have been working in the field for over 5 years), and although the costs would be higher going after all the 5 star fixtures and fittings, you will end up with a much higher dollar figure profit, and tax free one at that.
The property here varies widely in price due to I believe waterfronts running on emotion rather than comparable sales. For example, the house 2 doors down where the agent told us he was expecting low twos fetched close to $3mil at the auction a couple of months ago. I would like to say that is what we are aiming for, but our land I think is worth $500k less. But still an ideal final sale price of $2.5m and very likely one of $2m is on the cards, and that is aside from any CG over the period (this year our suburb had 0.2% CG according to API so hoping for a greater one next year - southern Syndey). Also we would be in a position to simply refinance and capitalize interest while we wait for someone to "fall in love" with our property, we wouldn't be pressed to sell by a certain deadline.
So once again, looking for some advice from people who have done it in the past as a strategy, what to look out for, what to spend on, what to skimp on, etc. Also, is that saying true that waterfront properties grow faster than the suburb average (14% average as opposed to a usual 10% over a standard 7-10 year property cycle). We haven't had enough time or experience in the market yet to determine it ourselves. We have only been investing for the past 1.5 years and what a turbulent time it was indeed...