QLD Brisbane North house options

Discussion in 'Where to Buy' started by KnockKnock, 15th Apr, 2018.

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  1. KnockKnock

    KnockKnock Well-Known Member

    Joined:
    29th Oct, 2017
    Posts:
    75
    Location:
    Brisbane
    Hello all,

    So basically after some consideration I have narrowed down my options to two:-
    Both are same distance from Brisbane CBD around 25km

    1.One is a new estate house in which the land releases are in Stage 1(8 more to go).Around 350m2 block and 180m2 house 4bed-2bath-2car brand new house turn key around 480k.
    2.A 1975 old house renovated sitting on a 635m2 plot just one street away from this new estate with a 2 story house on it 4bed-2bath-2car...Asking price is 470k which i Think is a bit steep for a 1975 built home...

    I am a FHB so I get the 20k grant if I take the new house.But the land component is small.The purpose of this buy is to live in it for a year for the grants and then rent out/live in depends on how I feel after a year.
    My heart says buy the new one use the grant but my mind says option 2 will make me more money in the long term.

    One more thing is does a new estate also raise the old house prices in the area...As in if I take the old home I plan to live/rent for about 5 years and when I save up enough money break the old home down and built a new one...This way I am hoping the estate land releases can increase the price of the new homes in the area and once all land is released,I can take advantage of it by building a new home on the option 2 plot....
    Is that a valid plan or am I just being too optimistic.?

    Please advise
    Thanks.
     
  2. David Shih

    David Shih Mortgage Broker Business Member

    Joined:
    21st Jun, 2015
    Posts:
    1,034
    Location:
    Sydney
    Hi @KnockKnock,

    Can I suggest an option 3:
    3. Buy an older house sitting on a 600+ SQM land, close to transport/shopping centre, far from the new estate releases and with potential to do value adds down the track. For example, new carpets, paint, etc.

    Option 1, you're essentially paying developer for their premium in exchange for a shiny, brand new product. Yes you do get 20K grant but the amount you're paying (and you mentioned the land component is small) kinda defeats the purpose.

    Option 2, you're essentially paying the current owner for his profit as he's done the renovation for you. By the look of the hefty price tag I'm assuming it's pretty much a complete renovation of the 1975 house.

    So would you prefer to pay a developer (option 1), a vendor that has done the hard yard (option 2), or buy something that has the potential for you to add value and pay yourself the profit instead? (option 3)

    Cheers,
    David
     
    gman65 likes this.
  3. KnockKnock

    KnockKnock Well-Known Member

    Joined:
    29th Oct, 2017
    Posts:
    75
    Location:
    Brisbane
    Thanks some solid advice.
    But I am a first home buyer and taking up a run down property and renovating it seems too daunting...
    Considering going with option 2 with as much negotiation as possible..
     
  4. Angel

    Angel Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    5,813
    Location:
    Paradise, Brisbane
    It doesn't have to be daunting. You can buy an older house and live in it. Keep studying investing here and after a while you can do some projects yourself. We can offer suggestions for everything you will need to know. The mankier it is, the more potential for improved equity in the next few years.

    This is your PPOR - no stamp duty to buy it and no Capital Gains Tax when you sell or on any increase in value before you turn it into an IP.
     
  5. gman65

    gman65 Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,802
    Location:
    Brisbane
    You will be competing with other FHB doing the same... as stated, best way to build equity in a short period of time is to manufacture it by spending some hours on a place that is slightly run down and make it look a lot newer. Yes, that takes hard work.