Full Reno + Seperate Dwelling Now vs. Basic Reno + Demolish Rebuild Later

Hi all,

Just purchased an IP in SEQ for dual living cashflow purposes. Am thinking whether to rent out as-is with a lower yield now and knock down rebuild later, or full cosmetic reno now and build the separate dwelling immediately.

With both having their own pros and cons, keen to understand everyone’s views as to which you would go for and why?

Background
- 50 year old original condition home
- Good bones rentable condition

Options
1) Basic Reno, Rent Out As Is, Build New Dual Living House Later
- Cosmetic Reno (Basic B&P Items) now
- Rent out as-is below median yield now
- Demolish & build new dual living later

2) Full Cosmetic Reno, Rent Out, Build New Seperate Dwelling Now
- Full cosmetic reno 10% budget now
- Build new separate secondary dwelling now

3) Any other options?

Still contemplating , hence bouncing ideas around to garner some thoughts.

Cheers,
Jw2

 

Hi wylie, town planner indicated yes.

 

Thanks! Yep it’s in MBC. It’s an idea I am still tinkling as to what’s the best use of capital to achieve the best outcome from both a cashflow and equity reval perspective.

Hence keen to hear what everyone thinks.

 

Have you read the MBRC website about dual living? Are you allowed to build a separate dwelling and rent it out? The requirements for building a separate dwelling are very specific. "Indicated" is open to interpretation.

 

What is the demand for dual living in the suburb? Just because you can develop the land, it may not be feasible to do so.

 

Thanks Wylie.

A bit of about us, we are in position to fund either options and we are currently focusing on cashflow. Both options would be a net positive position after debt.

The rebuild is expected to carry a slighter better yield by ard 0.5% and would bring about maximum depreciation benefits.

However, the overall outlay would price the property to be at the top 5-10% in terms of current property prices in the area (vs. Full Reno / GF option - which will hover around the median+25%) - one of our dilemma.

 

If you can build the second residents while you rent the first one be best for cash flow.

 

Thanks Angel. Agree, it needs to be first possible and then the product needs to cater for local demands.

Yes, they are feasible in our area.