Hi Everyone , just after whatever advice everyone can help with .
Im 26 and have just completed first investment property with a mate , we bought a 2 bed 1 bath unit in 3 storey walk up on the top level in surfers paradise , 100m from beach with small sea views. We paid $250000 for it and spent $25000 renovating it top to bottom , looks totally brand new now .
Should we hold onto it or sell and try make profit and turn to houses .?
Also i borrowed funds for my share in this project so financially finding it a little tough at the moment . Dont know what to do from here?
Really wanted this to be a stepping stone for me into property.
Also after some advice and/or opportunities regarding getting into property developing here on the Gold Coast . I am a builder by trade and love property just dont know how to really get into it properly.
Hi L,
Welcome to PropertyInvesting.com – sounds like the beginning of a success story ….
I'd be interested to hear a bit more about just what you have done. Your phrase "turn to houses" has me thinking you might have renovated an apartment (??) Later: I see you have now added more info – great, I'll go check it out.Quote:We paid $250000 for it and spent $25000 renovating it top to bottom , looks totally brand new now .Sounds cool – to help me out here, what kind of prices would a renovated unit fetch in that location? $350k? More? Have there been any others in that same block that have sold recently?
My early thoughts would be to run the numbers to see which way would make sense. Also, it is important to consider whether it will be two of you going forward, or just one of you. That answer might change the whole dynamics of the situation.
Stick around on here and check out some of the different forums – there is a wealth of knowledge on tap right here.
Benny
Hi again,
Well, I am gobsmacked !!! I just did a quick cruise thru units for sale on the Gold Coast, and the results stunned me. Of course, there are some "top of a tower" apartments in the $millions, but many small-block 2/2 units that were in the mid-high $2's. Sheesh, any unit in East Brisbane is now way higher than in Surfers????? Who woulda thunk it?
IF this is right, maybe another option would be to check out airbnb or similar. But first, is there a market for families wanting to spend a few days in Surfers??? (Yes, I am kidding… so it could be a goer). Then, take out a Mastercard or similar that allows you to finance furnishings on a "Pay nothing for 2 years, Interest free for 4 years" or similar – you see them on the TV.
Furnish the place on the card, and rent the space to short-term guests. Airbnb is the one I'm familiar with. It works GREAT when you have a location that everybody wants. Of course, this adds a bit more to your "list of things to do", and that would include arranging for cleaning/laundry in between guests – either do it yourself, or hire someone.
Again, the NUMBERS will tell you if it is feasible.
Benny
Hi Benny
Thanks for you replies . My unit is easily the nicest unit in the building , no other have sold recently although one other was trying to sell for $325000 but personally i think he was dreaming as his unit was a dive to put it politely.
We have it tenanted on 12 month contract for $350 week. body corp is only $46 week so it nearly pays for itself.
Including rates , body corp, water etc it costs me and my mate bout $60 week each to maintain however we each put $100 week into offset account for added security.
Its just with my personal loan that i took to get into this unit it costs me $15000 year to maintain so not sure if its got value or if i should sell up and look at houses.
Really want to make a career in property but unsure the best way to go about it .
Logan
Hi Logan,
You said you were wanting to get into property developing…. That would apply mostly to houses then, wouldn't it? Knocking them down to build new, or reno the house and split the block, etc. So the way to go seems clear – go into houses, yeah?
Perhaps start by cruising through the posts in this forum:-
https://www.propertyinvesting.com/forums/value-adding
Do run the numbers though – they will tell you whether to hold or sell. And is your mate joining you on this journey, or are you going it alone? THAT is important in the final decision.
Benny
Hi Lpadfield,
You've fallen into the golden trap.
You havent checked out your market thoroughly enough and you've purchased in an area where there are market issues developing due to saturation and overpricing.
And as a result .. it really doesnt matter whether your apartment has silver plated taps or marble lined floors .. its competing in a very difficult sector.
Its not your fault. The marketing for the Gold Coast keeps setting it up as the playground of millionaires, and the ideal investment paradise.
Reality is .. over the years .. the market attractiveness of the Gold Coast has gone downhill … and the millionaires have found better playpens to play their golf in.
You've been left with the 'EASY INVESTMENT' spruikers .. and the middle class 'plus one' investors. Not forgetting the retirees who think its a lot better than Melbourne as a place to die.
Check the streets next time you are down around Cavill Av .. you'll see my perspective is on the ball.
I know I sound like I'm repeating myself when i say it .. but its so true .. you have to know your market before you start investment and/or development strategies.
Buying in on a unit you look for size .. position AGE OF BUILDING (what they dont mention in the Gold Coast is the avg lifespan of an apartment block is a little over 50 years now) features and presentation. Lots of areas will only settle for the latest mod-cons and trendy buildings .. because .. they can.
The best developer land projects .. are looking at some area that someone has already built something on .. and imagining something different on it that meets current market demands. Best investment I ever made was a series of shops in a country town ON MAIN ST that I turned into 3 lvl shopping with offices and a large gym.
Ask your local real estate agents. Take them out to dinner (seriously .. do this at your expense .. you'll learn a lot and you'll make 'friends'). Ask the right questions .. get the right answers from them. Dont settle for one agent .. take multiple agents and make better judgement decisions based on better information.
So really .. the answer comes back as .. measure your market .. build your team and contacts .. then find the ideal project site that works for you.
A big hint : Sometimes the market isn't the market you see. ALL PROPERTY IS AVAILABLE FOR THE RIGHT PRICE.
Negotiate.
Getting back to your original question “Should I hold it or sell it?”
What was your plan when you were thinking about buying? Was it to increase value and rental return so you’d get a cashflow? Perhaps not if it’s costing you to hold it. Could you sell it and take a profit?Steve often says “what else could I be doing with my money?” and that is the real test here. If you could take your money out of the deal could you get a better return with it than you’re acheiving right now!
If you’ve got the building skills there are plenty of units you can look at for aorund the $140-150 mark that are very “original” and could do with a quick “makeover”. If you’re a local (I’m not!) I’d be looking at those to turn around and market to passive investors.
Just my 2c.
Cheers,
Dwight
Dwight
Cashflow Positive Investor
Hello Logan
Congratulations on your first renovation.
Looks like you are ready to move on to your next project, put your building skills to good use and get rid of that personal loan.
Any money you make from the sale will go toward your next project.
All the best to you.
DemkelI am unsure why you would have taken out a personal loan to fund the renovations when you could have taken out a line of credit or credit card at home loan rates which would have been a lot cheaper.
We do many a finance deal for clients who are looking to renovate the property but don’t have cash to do so and of course can’t borrow the reno costs until the property has increased in value.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I'd be interested to hear a bit more about just what you have done. Your phrase "turn to houses" has me thinking you might have renovated an apartment (??) Later: I see you have now added more info – great, I'll go check it out.
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