Hi,
I can’t chose between 2 properties.What’s more important in terms of value?
Larger yard or extra lounge room ie a separate TV room?
Assuming everything else is similar…
Thanks.
Depends on the suburb, and the target market (ie who your tenants will be).
I'd go with the extra loungeroom. Yards require gardening maintenance which is annoying. Furthermore, gardens do not earn rent. Rooms with rooves over them do. Now about this extra loungeroom… could it instead be a bedroom? Or a bedroom and a study if you spend a thousand bucks whacking an extra wall and door in? Bedrooms earn rent. Bedrooms add value to the resale.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
You can add a room, you can't add land.
Depends how much extra land you're talking though? Enough to add a granny flat/develop?
Ahhhh…
I presumed the block sizes were the same. Are they?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
I would suggest that you would be better off with the larger block. You can always add an extra room or two later down the track if you wish using some of the equity to fund a construction loan. I woud think growth would be better with the larger block, and the ability to subdivide/develop/add a granny flat is worth a lot to a property investor.
Cheers,
Luke@alibabawoo – are the block sizes the same? If not, what are their respective sizes? And what are the sizes of the backyards? Are the yards regular rectangle shapes or weird unusable triangle shapes? How wide are the driveways? Are there any covenants on the titles preventing subdivision, or building a granny flat in the backyard? We'd love to hear more info about these properties and throw around ideas with you!
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Home Occupier (e.g family with kids) is attracted with large yard. With extra lounge, I would convert it to another bed room because tenant particular couple or family is more attracted with extra bed room (e.g. study room)..hence you can push the rent higher with extra bed room. If the IP has three bed rooms, then convert the lounge room to another bed room, then you are competing in totally different market because of increased in bed rooms.
But you need to understand and precisely knows who your target market is (e.g. family, Student (rented by the room), couple with no kids etc).
I'd be asking what your long term goals are and then choosing the property that is the best fit with that.
Whats your reason for buying an Investment Property?
Are you interested in adding to the property down the track – ie subdivision potential, extensions or is it just a 'buy and hold investment' where you can just set and forget?
How long do you plan on holding onto it for?
Do you require more income in the short term, or is it capital growth over the long term thats more important to you?
If you buy the one with the greater 'income' prospects, is that going to help you to get into another investment property sooner if thats your goal?Good luck with the decision….
Nicole
Just to reaffirm what the others have been saying –
If you are looking for capital gains, the more land, the better. Land appreciates in value. Property does not appreciate very much. You can always build a fresh property to unlock the value of the land, but you can’t create new land
If you are interested in comparing the long term financial views of the investments, run them through myinvestmentdecision.com.au. You’ll be able to see a long term view of investment from a financial point of view, which will hopefully further the case of one out of the two properties. Just as Nicole said, you really need to work out your goals in order to choose between the two properties.
Just a note, I’m assuming that you are buying this property for investment purposes.
Jason, have just checked out your website – looks like some really useful stuff on there
Good to hear Nicole. Let me know if you need any assistance, or you can shoot a message through the feedback form’s that are located on the bottom of every page.
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