Which of these would you buy, assuming that the purchase price of both are in a similar range and both with excellent public transport/road links:
(a) a subdivided period home in a great location & expensive suburb (300m2, unit at rear sharing no common land) which has been renovated in the early 2000s, has strong capital gain potential if another update is made, and a decent 4% or so yield in its current state; or
(b) a period home on a large block is a less desirable suburb showing signs of growth (600m2 or so), lower rental yield (low 3%'s), potential to build unit at back, existing home needing major renovations.
(a) is appealing to me as the house can be rented as-is for a good yield and the reno's required are not particularly huge. (b) appeals because of the development potential, but less appealing because of the major reno work needed, the upfront costs of the reno and building at the rear, and lower yield in the meantime. At this stage, (a) is likely to sell for less than (b) as well.
Sorry if the answer is obvious...
(a) a subdivided period home in a great location & expensive suburb (300m2, unit at rear sharing no common land) which has been renovated in the early 2000s, has strong capital gain potential if another update is made, and a decent 4% or so yield in its current state; or
(b) a period home on a large block is a less desirable suburb showing signs of growth (600m2 or so), lower rental yield (low 3%'s), potential to build unit at back, existing home needing major renovations.
(a) is appealing to me as the house can be rented as-is for a good yield and the reno's required are not particularly huge. (b) appeals because of the development potential, but less appealing because of the major reno work needed, the upfront costs of the reno and building at the rear, and lower yield in the meantime. At this stage, (a) is likely to sell for less than (b) as well.
Sorry if the answer is obvious...