All Topics / Help Needed! / Investment in Craigieburn, Victoria

Viewing 5 posts - 1 through 5 (of 5 total)
  • Profile photo of nicemumnicemum
    Participant
    @nicemum
    Join Date: 2015
    Post Count: 3

    Hi, really need advice. We are thinking of buying a nearly 1000m2 block with a reasonable 3 bed house, with a plan to subdivide into 3 units.
    The owner mentions a price around 600,000, which is far higher than craigieburn average.
    There are plans and permits in place for the units.
    Buying with a partner( who’s a builder) with whom we share another property without problems. Walking distance from station and hanson road shops.
    Please give your advice on the price.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Hi there @nicemum

    Firstly take a look at high-level costings such as :

    Purchase price of land
    Stamp duty
    Legal costs of acquisition
    Cost of getting permits finalised
    Costs of demolition permit and demolition itself
    Cost of mortgage interest during this time
    Cost of the build
    Cost of mortgage interest for the build
    Cost of subdivision
    Selling agent costs
    Capital gains tax

    Then look at likely resale value of the units

    If the numbers are close together, don’t bother. You also need a buffer for inevitable cost blow-outs. Best to discuss the idea with your accountant if this is your first attempt. Don’t go buying it without being sure of your numbers.

    On the surface of things, unless the existing house doesn’t have to be demolished to make way for the units, this looks like a guaranteed loss-maker.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of nicemumnicemum
    Participant
    @nicemum
    Join Date: 2015
    Post Count: 3

    Thanks a lot, Jacqui.
    We have decided not to buy, as similar properties in same street were sold for much less.
    Many thanks for advice.
    Cheers

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Pleasure. The nitti gritti proper “numbers” involve having more experience with development, but it’s easy to rule out a lot of deals just on high level numbers as they don’t come anywhere near stacking up.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of nicemumnicemum
    Participant
    @nicemum
    Join Date: 2015
    Post Count: 3

    Yeah; and it didnt seem right too much above the average price in that suburb.
    Luckily i also found similar house in the same street sold for much less
    Many thanks for reply :)

Viewing 5 posts - 1 through 5 (of 5 total)

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