Ok, I have an IP in Frankston North which is on 680m2. There is adequate room to build a 3br unit at the back. There is an inground swimming pool (which has been filled in but not completely removed), I've made an enquiry as to whether I can build on it.
My question is, is it a smart option to build on the back to sell the original property and to hold the new property as a rental?
My calculations are the costing of the original property (pre subdivision) is $310k, I estimate building costs, conservatively, to be $200k, so if I sell the original dwelling for $350k it'll leave me with a brand new 3br unit with a mortgage of $160k with a weekly rent of $300, thus cashflow +.
Although it will be fantastic from a cashflow perspective and may enable me to purchase a second IP (which again would be subdividable), is it good as a long term investment or should I just forget it and just let it sit there?
If I subdivide this first IP and sell 1 of the dwellings, I could theoretically continue to invest in this manner, ensuring all my IPs are cashflow positive.
Am I looking at this too simplistically? Is my theory sound?
My question is, is it a smart option to build on the back to sell the original property and to hold the new property as a rental?
My calculations are the costing of the original property (pre subdivision) is $310k, I estimate building costs, conservatively, to be $200k, so if I sell the original dwelling for $350k it'll leave me with a brand new 3br unit with a mortgage of $160k with a weekly rent of $300, thus cashflow +.
Although it will be fantastic from a cashflow perspective and may enable me to purchase a second IP (which again would be subdividable), is it good as a long term investment or should I just forget it and just let it sit there?
If I subdivide this first IP and sell 1 of the dwellings, I could theoretically continue to invest in this manner, ensuring all my IPs are cashflow positive.
Am I looking at this too simplistically? Is my theory sound?