Browse Forums Real Estate 1 Jul 01, 2007 4:43 pm I’ve been thinking of purchasing my first investment property to renovate and re-sell.
Has anyone done this before? I guess I’m a little worried about taking the first step. But if I can’t renovate and re-sell….who can? It’s a big step for someone who has always been very cautious, but I feel now is a good time to buy, so now is a good time to get going on it. Can anyone who has done this give me advice? Internal and External Building and Colour Consultant Online - Worldwide http://www.denovoconcepts.com Re: PROPERTY INVESTMENT 3Jul 01, 2007 5:26 pm So….is it hard to get started?
Do you need a lot of capital behind you for the first one? Thanks! Internal and External Building and Colour Consultant Online - Worldwide http://www.denovoconcepts.com Re: PROPERTY INVESTMENT 4Jul 01, 2007 5:45 pm It has it's risks and benefits.
You should enjoy reading this article which I printed out this morning. http://www.realestate.com.au/review/jun ... rowth.html? Steve Re: PROPERTY INVESTMENT 5Jul 01, 2007 6:05 pm Thanks Steve had a quick look and saved it in my favourites!
What I’m looking to do is buy the first one, renovate cheaply, which I know I can do, and then sell it. I would also like to have a rental property, but this would need to be in a higher price bracket of the ones I would buy and sell cheaply. I know a lot of traides, I could do the gardens myself, saving money there. I really want to do this but I don’t want to do the wrong thing. I have a client who is a Financial Adviser; he said he is willing to help me out there. But it still scares me! Internal and External Building and Colour Consultant Online - Worldwide http://www.denovoconcepts.com Re: PROPERTY INVESTMENT 6Jul 01, 2007 6:51 pm Michelle So….is it hard to get started? Do you need a lot of capital behind you for the first one? Thanks! Without capital I used the equity in my home. Interest only mortgage, fixed rate. Just make sure you can afford the net outflow after tax savings. If you are going to renovate you have that lead time (plus costs) until it's complete while your new property is not generating income. Now is a great time to buy... just make sure you buy above the high water mark after the poles melt! And I mean it - the only barrier is yourself... after you make the move it is really easy. I have no regrets - except I should have done it sooner. I hope that helps. BTW - I live in Melbourne and bought in Robina on the Gold Coast. Ed If I write "I" please read "We"! Be good. Re: PROPERTY INVESTMENT 7Jul 01, 2007 7:03 pm Thanks Ed….What made you buy in QL?
That’s the one thing that I said I would not do. Locally means I can use my traidies which makes it cheaper for me to renovate, plus I would want to see the property. Did you travel to QL to see the property you bought first? Internal and External Building and Colour Consultant Online - Worldwide http://www.denovoconcepts.com Re: PROPERTY INVESTMENT 8Jul 01, 2007 7:40 pm Yes we saw the property first. At the time I was doing a lot of work there. I looked at what area appreciate more and Gold Coast seemed ready to boom... well I missed the early part of the boom but got in for the aftershock and it has done well.
We only bought for investment, and a purchase in another state spreads the risk... Also allowable as travel on the tax I guess renovating would not work well in another state - but maybe it would work for you in Italy! I would be happy to do it again. Ed If I write "I" please read "We"! Be good. Re: PROPERTY INVESTMENT 9Jul 02, 2007 10:21 am Michelle,
It is a bit scary, isn't it. I plan to do the same thing once I have built my house. Our friends on the Central Coast used to buy a house, live in it a year while renovating it and then rent it out - moving onto the next. A bit of a hassel but saves on the rent/2nd mortgage while doing the renovating and means you are onsite all the time. Good and bad in that. We'll probably buy down the road (figuratively speaking) where we can keep an eye on it. Once renovated, we'll rent it out. It is worth doing scenarios to get an idea. Buy a run down house for $200 000 and do $50 000 renovation. Rent it out for $350pw. Income pa is $18 250 and mortgage (intrest only) at 7% = $17 500 8% = $20 000 9% = $22 500. So at 8% you are looking at around $145 per month. Of course if you only can get $300pw than the numbers change quite significantly. Also add in the cost of a real estate to manage the rental. I think a lot of research into local prices and rental costs is going to be my number one priority. I am not sure that renovate to sell is worth while on lower cost properties as the costs involved in the sale, stamp duty, capital gains etc etc tend to make it a zero sum game. Regards 3xb Re: PROPERTY INVESTMENT 10Jul 12, 2007 8:39 am Be very-very careful with budgeting!!!
The paradox in Sydney at the moment is that you are getting in loss by renovating!!! You pay about 60K extra for the privilege to renovate a house!!! Don’t believe me – go and check yourself. Just because it’s a run down house or the worth house on the best street it does not mean you will make money by fixing it. Anything that is called ‘renovators delight’ in brings so much attention from prospective buyers – the prices just skyrocketing. People probably watching TV too much. I’m doing interstate projects at the moment - one in regional WA and I just about to settle on another in SA. This is a booming area and problem that I’m facing – it’s very hard to find a traders. Prices are quite high too. But when you see the property prices claming up the way they do – it calms you down a lot. My tips for reno: Spent lots of time researching the area Don’t do what you like – do what market wants. Ask real estate agent what sort of renos are the easiest to sell in the area – and then just make a prepay like that. Try to look for bad or tasteless renovations rather then “renovator’s delights”. They are priced modestly and they got very little attention on the market. Work backwards – decide what margin, how quick and what cash-on-cash return you want to achieve then work out the target property price range. Spend lots of time budgeting, planning & scheduling the project. Ask someone who was successful with renos to help you to crunch numbers. I’m usually asking for a long settlement period – 2-3 month. This gives me time to prepare the project and select the traders before settlement and I'm not charger any interest on it. Re: PROPERTY INVESTMENT 11Jul 12, 2007 10:08 am And part of this - renovation equation - is to remember the cost of the Stamp Duty on purchase, legal fees and agents commission on sale - has also got to come out of your profits.
Steve Re: PROPERTY INVESTMENT 12Jul 29, 2007 10:36 pm Michelle What I’m looking to do is buy the first one, renovate cheaply, which I know I can do, and then sell it. I would also like to have a rental property, but this would need to be in a higher price bracket of the ones I would buy and sell cheaply. Hi Michelle, Heard that if it's not your residential property, you need to pay capital gain tax when you sell it. So you might also need to consider owning it for at least 12 months before selling it to save some tax. That's for NSW, not sure about your state, might want to check with your accountant first. Re: PROPERTY INVESTMENT 14Aug 25, 2008 5:40 pm EDIT:> spammer was removed by mods. Thanks guys.
Please remove this spammer & delete their account. This is the 2nd time they have spammed their marketing scheme. Re: PROPERTY INVESTMENT 15Aug 25, 2008 7:01 pm Peyton Well fiend i thought that the above suggestions has helped you Yes but I like how they have referred to Michelle as a 'fiend' ... a bit rude! 'chelle We have a hand-over date...15/10...but I won't hold my breath! http://people-in-glass-houses.blogspot.com/ Re: PROPERTY INVESTMENT 17Aug 25, 2008 7:14 pm 'chelle Peyton Well fiend i thought that the above suggestions has helped you Yes but I like how they have referred to Michelle as a 'fiend' ... a bit rude! I missed this……. Internal and External Building and Colour Consultant Online - Worldwide http://www.denovoconcepts.com Re: PROPERTY INVESTMENT 18Feb 21, 2009 9:34 pm Yes Ofcourse, the first and one of the most important things in this system is to ensure that one makes profits, it is essential the purchase price is massively under market value. This means some 50% to 70% under market value.
The first thing that one asks in this case is, "Who on earth will sell you such a cheap property?" Well we are speaking of rehabilitating a property, which in turn means that the property is not in a very good state in the first place and this is the reason that one would sell for far below value. Some of these properties are literality dilapidating, derelict or have been neglected or abandoned for so long that re-habilitation of the property and the sale of such at market value is where the profits are made. In simple words, this would mean that the purchase price is not low enough. When you add to that the costs of improvement and then try to sell at an even higher price, you may not be able to attain the selling price needed to make a profit, which may put the investment at risk Re: PROPERTY INVESTMENT 19Feb 22, 2009 8:40 am I also worry about capital gains tax for when you sell it. Its quite a hit for investment properties that aren't your principal place of residence (not sure about NSW/Vic differences in this law). As you are doing it up, you probably wont have tenants in it, so paying a mortgage or putting your $$'s into a house with no income being derived from it - sorry Michelle I'm presuming here... Current market, who knows whats happening, it may go down further.
If its something you want to do, go for it. Its like the stock market, who knows when its going to go back up or how low it will go, but those who jump in when its low can make a fortune. (this in no way represents advice - who would listen to me anyway ) I agree with everything put down here already so wont repeat what everyones already said. Hopefully I've added something extra to the topic. Good luck with it Michelle!! ICK So glad the building is over, never again. Loooove our house, but still not quite sure it was worth all of the stress they put us through! Re: PROPERTY INVESTMENT 20Apr 26, 2009 11:13 am with capital gains in victoria if you live in the property for 3 months you dont pay any taxes so worth changing your address. if you sell as an investment property then you pay 50% tax on your profits if you sell in the 1st 12 mths but only 17% tax if you sell after 12 mths. keep in mind if you buy and plan on renovating it pays to move your address and make this your principle place of residence. it is a loophole in the system and a bit of a hassle changing drivers licences ect... but to be able to sell on very quick it is totally worth the effort. keep your renovations simple dont put in any gadgets you might like treat it as a buisness not personal. personal touches cost money and will cut into your bottom dollar,redo kitchen and bathroom but just paint bedrooms and lounge new carpets are only a necessity if the old ones are really bad you may get away with a steam clean. clearing gardens and making them low maintenance is a must and so is a garage if there isnt one. good luck michelle we made 41 grand on our 1st reno and only spent 7 grand so it can be done but its very messy and we done all the work ourselves. we are now building with the profit from the reno so hopefully in 5 years we will be millionaires thats the plan anyway it will happen stay safe happy building You might be able to apply to divert the sewer at your expense. In NSW you would contact a Water services co-ordinator and they would give you advice as to whether or not… 1 16150 Ask for some kickplate to be added and also for tradies to be requested to use lanyards on tools on that side of the building. Be respectful and have the discussion… 1 1698 The setback from the kerb is 4m. It is council land to provide an area for services like sewer main, gas mains, water mains, underground power or poles for overhead power,… 4 2402 |