- dan569348694Participant@dan569348694Join Date: 2022Post Count: 0
I came across this property https://www.realcommercial.com.au/for-sale/property-169-part-street-berserker-qld-4701-504182599
It’s a commercial property in a mostly residential neighbourhood. The quoted yield looks decent, but it’s being sold vacant, so basically at 0% yield. The area wouldn’t be suitable for heavy industrial, and it’s not on a main road, so not great for retail either, so I suppose finding a tenant may be a challenge. So I was wondering if rezoning as residential and subdividing, then selling the two residential properties could be profitable, but factoring in building costs vs sell price, it doesn’t look like it would make money. Can this strategy be profitable in today’s market?
Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763
- This topic was modified 10 months, 4 weeks ago by dan569348694.
G’day there. This is a question of whether the improved value exceeds the cost of acquisiton and improvement (rezoning) by enough of a margin to justify the risk and aggravation. You’ll need to do your numbers to find out.
One thing I would be trying to figure out is whether there is demand for such land, and if so, at what price. Pre-sales would be important to de-risk the deal, so chatting to an agent would help. Start with end sale proceeds, deduct costs, and see how much profit is left over.
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
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