Unit VS house renovation
- Thread starter dags
- Start date
From my experience I would suggest to try not to over capitalise the project as there is generally slower growth in the unit market overall. But that depends on a number of factors eg, location ,size of the complex, amenity etc.
If you can achieve market rent without having to do too much would be the ideal.
Simon
If you can achieve market rent without having to do too much would be the ideal.
Simon
Hi dags,
If you are looking to start a portfolio and your budget gets you a unit - then get a unit. Prolly better in my view to go for a house, if you can afford it, because land goes up in value and the building depreciates.
However, regarding renovations - in Melbourne as well as Sydney (where I am), it is the wrong part of the cycle to be doing renos and expecting a gain.
If you MUST do a reno, the simonjulie's advice of "If you can achieve market rent without having to do too much would be the ideal" is the way to go. This I have discovered from my recent experience also - so not just theory.
Cheers,
If you are looking to start a portfolio and your budget gets you a unit - then get a unit. Prolly better in my view to go for a house, if you can afford it, because land goes up in value and the building depreciates.
However, regarding renovations - in Melbourne as well as Sydney (where I am), it is the wrong part of the cycle to be doing renos and expecting a gain.
If you MUST do a reno, the simonjulie's advice of "If you can achieve market rent without having to do too much would be the ideal" is the way to go. This I have discovered from my recent experience also - so not just theory.
Cheers,
Hi Dags
Unfortunately that is not always the case. Land increases in value and buildings depreciate. I know a number of people who thought the same as you but it did not turn out the way they expected it to, within their time frames. Investing in realestate can be a long term project. I suggest you do a bit more research before you decide on which way you should proceed.
Kind regards
Simon
Unfortunately that is not always the case. Land increases in value and buildings depreciate. I know a number of people who thought the same as you but it did not turn out the way they expected it to, within their time frames. Investing in realestate can be a long term project. I suggest you do a bit more research before you decide on which way you should proceed.
Kind regards
Simon
dags said:
G'day dags,
Nope - sorry to say - it ain't necessarily so.
Example:
Buy $300K house in need of reno
Limit your reno to 10% of the purchase price (rule of thumb in good times) to get 20% increase in valuation.
Because we are in the 'consolidation' phase of the cycle - which means slightly -ve, slightly +ve or zero growth phase, it might be entirely possible to get a valuation of $330K at the end of this project (zero growth), or $320K (slightly -ve) or $340K (slightly +ve).
All of these outcomes are entirely possible in this phase - which is why it is not a good idea right now.
Hope this helps.
And don't forget the cost of stamp duty on top.
Simon
Simon
Similar threads
