在澳大利亚 I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo
Im just having a sticky beak at this property, as it was highly recommended by the agent,
Was wanting others opinions on this one, as its got me puzzled
Firstly, un rennovated 3bdr properties of this block size (400sqm) can go at present for anywhere between $180k and $230k,
agent claims it has been rental appraised at $500 per week,
The rennovations on this place are magnificant (according to photos), and its a 5bdr,
asking price is $375k @ $500 per week is 6.9% which is pretty good for this area without doing anything to it,
there is no value add potential but my question is properties that have had artificial increases, would this pose a good investment, I feel $500 pw assuming its fair, to find a tenant willing to pay this much might be risky, also the fact that the block is small, location is good, and above median price (I assume) it would be a poor investment for a hold and buy strategy
Am I on the right track?
I dont know much about Ballarat so i cannot comment on the location. But the big question is, how accurate is the $500 per week. If we are in a flat market and as the house incurs wear and tear, will you still get $500 a week in a few years time?
I suppose another question i would ask myself is - is $500 a week rent, common or more on the high side?
recommended by the agent, only ever means, good for the agent
REA would be fired for unethical conduct, if they were used car salesmen
discount anything said, and half that is written
$REA500 = $real400
I just had a quick look on RealEstate.com at other rentals in Ballarat and there doesn't seem to be anything else asking anywhere close to $500 p/weeek.
Closest was 1 property at $400 but even that appeared expensive compared to the others.
Perhaps if you rent rooms individually to uni students would be the only option to achieve $500?
I don't know the suburbs but on RE.com there are 300 rentals lower than $500pw and 3 higher than $500pw. So it seems it would have to be a pretty outstanding property to demand that rent. The 3 that were on there looked a LOT different to the link you provided. They had words like executive, luxury etc.
Yeah in my short experience I think its better to buy at or below median because the downside risk is much lower.
Give it a miss.
CHam said: ↑
Perhaps if you rent rooms individually to uni students would be the only option to achieve $500?Click to expand...That may well be how they stack the deck,but what the agent never tells is all the problems that come after the ink is dry..
yes, do agree with pretty much everything so far,
this is what my line of thought is/was,
the yield is 7% which is very high for this area,
and having a look, very few properties that fetch $500pw+, its a 5bdr which is quite unusual for this area in terms of rental,
the block itself isnt very big, the building itself is immaculate but not a heritage building or anything that special, so does the actual $100k odd difference in price represent an artificial component????
eg if the commonwealth games were to be hosted there, then the rent may be something stupid like $3000 per week, which is I feel an artificial high yield,
even if the demand for a $500pw 5 bdr was good, and consisitent with the rest of the market, would valuations be in line with it, and if the entire market cooled, eg for 1,2,3,4,5 bdrs, would the 5bdrs have the chance of dropping significantly more then the 1-4 bdrs.
I personally think its almost as bad as a serviced apartment in terms of risk, I can imagine renting the place out for $380-$430 down the track if your lcuky
food for thought
Here's something else to put you off - what's your target market for a 5br house? Families with lots of kids. What's the worst thing you can put in a house for keeping its condition? Lots of kids