NSW Newcastle Property 2018

Discussion in 'Where to Buy' started by Micko, 1st Jan, 2018.

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  1. Micko

    Micko Well-Known Member

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    {Note - thread continued from here: NSW - Newcastle Property 2017}


    . Nice. Was this one of your projects @tomlemke ? :) These are just across the road from where this guy bought both 38 and 40 Kendrick Street last year.....expecting 38 and 40 also to be knocked down and townies built in the near future on them as well. Do you think they made good money on these at 43 Kendrick after the build and holding costs?
     
    Last edited by a moderator: 19th Feb, 2018
  2. tomlemke

    tomlemke Well-Known Member Business Member

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  3. tomlemke

    tomlemke Well-Known Member Business Member

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    Yeah the developer would of done really well out of Kenrick St, houses opposite that sold recently will not be as straightforward as 43 was.
     
  4. Doculus

    Doculus Well-Known Member

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    $90k would be a more reasonable profit, but it is still only 12% ROI. Not enough for me when you look at the returns on property development.
     
  5. Doculus

    Doculus Well-Known Member

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    Yep, I reckon that could be closer to the mark if you did it yourself on a shoestring but that would be a house that was in very good order and not requiring an internal reconfiguration, replumb and rewiring. Those are big ticket items. How many houses have you renovated that didn't require these though?

    That kind of reno would not be a proper full reno like the one done here. The kitchen alone would be 30-40k if a kitchen company did it, so even if you did it yourself, I reckon materials would be around 20k including appliances. Bathroom + ensuite would be similar. The last very nice medium size kitchen I did myself was 13k in 2008.

    In the 2000s I did 5 or 6 Renos and not one of them cost me less than $500/sqm....so that is my benchmark. So, $50-60k seems cheap to me.

    Based on your figures, means profit at $800k would be somewhere in vicinity of $110k which is still on 12%. But if sale was $850k then a much healthier ROI closers to 20%.
     
    Last edited: 2nd Jan, 2018
  6. Doculus

    Doculus Well-Known Member

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    Maybe on an althea posted Reno- not on a Reno of that quality though.
     
  7. Doculus

    Doculus Well-Known Member

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    True. Bunnings is very expensive and you can pick up good deals around the place. Ebay for example.
     
  8. Doculus

    Doculus Well-Known Member

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    That's is true. Even a handyman charges $40/hr. I have done Renos where I did 90% of the work but it is hard to do electrical and plumbing yourself (plumbing can be done with polypipe of course). Not to mention the fact that doing electrical yourself is illegal.

    Sure you can do a cheap dodgy reno at low cost, but if you do it properly and legally with DA in place etc, you are unlikely to do it for 50-60k. Maybe a cowboy could, but you need to compare apples with apples. Doing what a cowboy does is not treating it as a business.

    I would do property development any day by using my capital and brains to get ROI of 25% instead of breaking my 'back' and using up my time doing it myself.

    How much does a developer who outsources his/her tasks make per hour compared to a renovator? There would be no comparison (not even taking into account the residual income that a developer makes if they are also building a portfolio). Not even close!!.

    That is why plenty of developers I know are driving around in big black X5 BMWs....don't know too many renovators doing that.

    Scrimping to save a few bucks to try and eek out a living by renovating is not easy (been there done that). My eyes are directed where the bigger bucks are.
     
    Last edited: 2nd Jan, 2018
  9. lightbulbmoment

    lightbulbmoment Well-Known Member

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    I dont usually judge someones wealth by the car there driving. Alot of times there on lease plans as a tax write off and to look the part and portray a successful image in business or where they live.

    I recently saw Z a completed development in newcastle it took a long time but all three town houses where rented out. None where sold. Got me thinking that its very rare where you see this and these are the people you want to be talking too to see how there doing it.
     
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  10. lightbulbmoment

    lightbulbmoment Well-Known Member

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  11. Doculus

    Doculus Well-Known Member

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    You missed the main point which is that there is a big difference in the level of returns! But, yes, agree that a car is a superficial assessment of someone's wealth, although that was a figure of speech to make my point.

    Z must have a fair bit of capital in the game if they can afford to keep them all. More of an investment strategy?
     
  12. Doculus

    Doculus Well-Known Member

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    Good spotting. Not sure how they managed to pick that place up for $425k, but hard to argue with the evidence! I woukd have thought that was worth $500k unrenovated in August. As has been said by many a property investor, you make your money when you buy the house.

    What are your thoughts on purchase price @tomlemke?
     
    Last edited: 2nd Jan, 2018
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  13. Doculus

    Doculus Well-Known Member

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    Yes, and only a duplex instead of multiple new dwellings side by side in Collette St. Pool a very nice incentive and proper backyard instead of just a courtyard (but the courtyard is pretty spectacular!).
     
  14. Doculus

    Doculus Well-Known Member

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    Corlette St closer to beach though
     
  15. tomlemke

    tomlemke Well-Known Member Business Member

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    Great buy at the time, it was marketed poorly and in terrible condition. Pretty sure it sold prior to the first open.

    Similar story to that place in Robert St Wickham I posted last week, I had a friend who offered above asking price never heard back and saw it online that it had sold for below his offer.
     
  16. Doculus

    Doculus Well-Known Member

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    That is the way to buy. Lazy agent?
     
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  17. Glenn1234

    Glenn1234 New Member

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  18. Biz

    Biz Well-Known Member

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    How good is that address, 8 ball street lol. Someone was taking the ****. :D
     
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  19. Glenn1234

    Glenn1234 New Member

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    Hahah yep random street name
     
  20. tomlemke

    tomlemke Well-Known Member Business Member

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    Great buy Glenn, good area in New Lambton you will do well long term out of it.
     
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