Forums / Property Investing / Help Needed! / Keep, sell, develop or something else?

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  • Profile photo of bbinvestbbinvest
    Participant
    @bbinvest
    Join Date: 2003
    Post Count: 8

    Hi Everyone,

    I have a property on the Central Coast of NSW, in a suburb which has seen good growth in recent times after some years of being flat. The tenants recently vacated and I am looking at options.

    It is an early 80’s era 3/1 brick and tile house on a slab which I purchased on 2011 for $300k. It is on a 900sqm block and in good structural condition. It has been bringing $350 per wk rent for the past 4 years consistently. The agent seems to think after giving it a basic tidy up (paint, maybe refresh the new carpet, other minor cosmetic stuff) and given the rising market, it would now bring at least $380 per wk.

    My mortgage is just under $300k, and the current market value, as appraised by the agent, is $420-$430k after the cosmetic tidy up and $370-$380k as is.

    The options I am considering are:

    1. Do basic cosmetic reno and sell now. If the agents estimate is close (grain of salt mode on), I would come out with $100k, which would kick off several other deals.

    2. Keep as a rental and ride the market a bit longer. It does pay for itself, so there is no financial impost to keeping it, other than the possible opportunity cost of not selling, and how the market will go (see below).

    3. Build a granny flat and have two streams of income – the block is very suited to doing this and rental demand in the area is very strong at the moment.

    4. Another option I am not considering, but should be (!).

    The stats for the suburb (grain of salt mode on again) show 15.47% growth over 12 months, 0% for the quarter and a $500k median price – a slight drop after a recent peak. The suburb is Cooranbong: http://www.yourinvestmentpropertymag.com.au/top-suburbs/nsw-2265-cooranbong.aspx

    IF the market has not peaked, my least preferred option is selling now and I would like to ride it a bit longer; the agent thinks there is more in it despite the stats showing a peak of median price and no quarterly growth. I could put another tenant in for 6 months, then reno and sell later in the year.

    The idea of building a granny flat is something I have not done and would have to investigate further.

    I am interested in any thoughts on this scenario, especially around what the market in the area may do in the short term and any other options I am not thinking of.

    Thanks in advance!

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,376

    Hi bbinvest,

    According to realestate.com the median for a 3 bedder is around $400k. Check this out (if the link worked) as it gives details on just HOW the median has been calculated:-

    https://www.realestate.com.au/neighbourhoods/cooranbong-2265-nsw

    then click where it says “How this was calculated & copyright information” to see how they arrived at the figures posted.

    Note that 4 bedders are the ones that make the median around the $500k mark. Can a reno turn yours into a 4 bedder (without it looking “contrived”)?

    Benny

    Profile photo of ajayayyarajayayyar
    Participant
    @ajayayyar
    Join Date: 2005
    Post Count: 175

    Hi Bbinvest,

    I know your post goes back a while, but I would go for option 2 or 3. I think central coast is a great place to invest and I just bought a property there in lake munmorah and intend to hold it long term. I believe there is a fair bit of infrastructure going in the area, and its right between Sydney and Newcastle. Jobs are also available in central coast and Newcastle, and there is also a nice beach and outdoors lifestyle. Vacancy rates are also low.

    So I would hold it long term and if you are up for it, consider building a granny flat, I would anticipate pretty good demand for it in the area.

    Regards,
    Ajay

    Profile photo of bbinvestbbinvest
    Participant
    @bbinvest
    Join Date: 2003
    Post Count: 8

    As an update to this thread, I ended up selling it for $460k after a cosmetic reno and staging it.

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