I currently have 3 x 2brm units that i have been planning to sell. In its current condition the prop are doing alright renting at 140/w. The prop are almost breaking even for what I have paid for it. I wish to sell them sooner but I was informed by other investors that it would be a good idea to renovate/refurbish them as the units are bit dated. After that I either put back in the market for a higher rent or otherwise sell them. Only problem is I dont have the time nor the inclination. Another option probably to just off load it to another investor who has better apptitude to renovating……I would appriciate anyones opinion on the matter and can you also please state possible pros and cons.
You will add value by renovating. Problem is that if you don’t do most of the work yourself the cost of renovating will be high – poss too high. Every $ you spend on labour comes straight off your profit.
I would be inclined to do it yourself or consider selling them aiming for a renovator.
Maybe some REA can give you advice on what you can get renovated and unrenovated?
Cheers,
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Morgage Hunter,
Thanks for the advice…..I will just have to learn a few things as i go along. I will also try to put it in the market at the same time so that I can get a general idea of whats needed to be fixed/improved from the point of view of the buyers/investors.
Hi lalonga
What do you think each unit in its current State would fetch assuming they were strate titled.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Hi Richard,
The whole block is already strata titled. Unit 4 & 5 sold first at $118K each in April this year. Unit 3 was sold afterwards for $110K. I bought 1,2,6 for even less.
My unimproved personal valuation in between $115K to $118K each (and hopefully get it close to that price), bearing in mind that that is my own personal expectation. The units need some sprucing up in order to increase it’s rental potential. At its current state it is a solid earner at $140/w. I wanted to increase it but I realised that I need to update the units abit to make it abit more appealing on the $160/w market. And that is where I caught abit of a snag because I know close to nothing about contruction work (I could’nt even trust my self to repaint it).
Wanting to move on to other projects, I have to consider what buyers are willing to pay. As long as it sells privately, the more likely that it will have a lower price. If I list it to an agent…. I would have to take into account the cost of selling. But to be honest I would like to keep the third party involvement limited to the banks and solicitors only. This might help me move it alot faster if I deal directly with the buyer.
I you have better ideas than my plan please let me know. I would appriciate any help that I could get.
Regards
LalongaWhy not consider wrapping it.
The instalment repayments on say $135K are not that much more that the gross rent for a tenant although you are increasing your case flow.
There is nothing to stop you utilising the equity in the properties for a nother project and then wrapping them.
You might even find that the existing tenants would be interested.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
HI Qld007,
It would be ideal to do wrapping on it, and I have considered it before. But with the nature of the units themselves, it seems to be a magnet for a certain market. The current tenants are not interested in purchasing them.
I think I have to learn new skills and consider renovating them…..time for me to get my hands dirty. In the mean time I will market it while doing the internals of the property. Lets see what happens.
Lalonga
[biggrin]
I think you will make much more money renovating as most people cannot envisage how a unit will look done up, but why not do one up as a display unit, get a valuation on that, then you can sell it and proceed with the next one so you will not be without all the rents at once. The trick with renovation to sell is to only do some big basics, new carpet or polished boards, a paint and some new wood venetians from a cheapie home products store like Freedom.
Beryl
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