I nearly bought this unsighted - Carnarvon WA

Hi all,

Very new to this, currently in the hunt for a PPOR in the Northern Suburbs of Melbourne. Stock is basically non-existent so my searching is similar.

I came across this property, that I almost bought with cash (would have severely dented the deposit) unsighted.

https://www.realestate.com.au/sold/property-house-wa-brockman-133677978

I have lived in WA, but never in this town. I for the life of me can not understand why it is $100k less than everything else nearby.

I have no issue with doing some Reno’s and will be planning on doing this on my PPOR when purchased.

Are there any red flags that I am missing on this property? Sure it’s a dogs breakfast and needs work and the location is obviously extremely remote, ex mining and probably low socioeconomic.

How bad can a property be to be less than land minus demolition? Is there anything else that I might be missing why this was so cheap?

 

To clarify I didn’t get a quote for demos, so this was probably high given the remoteness.

 

were you looking at it from an investment perspective?
Were you going to rebuild?
So liveable houses are 150k?
What makes you think you could get it up to scratch or better than the other properties for less than 100k?

 

that would be such a good bang for buck reno, especially if you did it yourself,

assuming it was structurally fine,

https://www.realestate.com.au/property-house-wa-brockman-132119590

seems to be the only comparable, and there are only 2 others for sale in the immediate suburb

 

Investment perspective. I was not thinking of rebuilding but rather renovating up to an acceptable living standard.
I have laboured on several renovations and am currently budgeting for one for a PPOR when I purchase. I would do a fair chunk of the reno myself, only really needing a sparky, plumber and a carpet layer. The actual house doesn’t look too bad though. The remoteness may have an impact on the cost of trades.

 

Yeah that was my thought process. It’s between 1/4-1/3 the price of everything else. Maybe the street is the worst street in the entire town, I don’t know. There has been a lot of noise in the last 8 years about increasing population in the northwest of Australia. Who knows where it will be in 30 years time, maybe exactly the same, maybe a mining hub, maybe a touristic paradise or maybe an abandoned town.

 

its a pretty small town, so I doubt there is a bad street,

other sale is
https://www.realestate.com.au/sold/property-house-wa-brockman-133677918
which is say $10k worth of differencec in condition,

also, a lot of these houses for sale and sold have internal malicious damage so it might be a crappy area

 

Yeah definitely. Such low rent, might even be previous government housing.
You would definitely not use anything above budget finishings.

 

That front wall would be worth a fair amount.

 

The price is very attractive but the town should come with massive amounts of warnings - would be interesting if it's a no go zone for landlord insurance.

 

I’d think there would be lots of supply and little demand and that’s why it went cheap. Also what would you do with it? Fine if you were going to live there but if you rent it out that would come with huge risks given how that house and others nearby have been treated. For resale, you need to find someone who wants to buy it and investors wouldn’t be turned off for the same reasons as above.

 

It would be a long, long term hold and more aimed at my view that the north west of Australia will develop significantly in my lifetime. These towns can go up and down based on the mining activity that is happening nearby. Over the next 20-30 years, I would expect there to be an up cycle at some point and even if the house sat empty that it would be possible to make a profit after rates and other expenses by holding out for one of these.

But as I said early on, I am an absolute noob and while I am doing a lot of research I really appreciate everybody else’s views. You don’t know what you don’t know.

 

Not a noob, everyone starts somewhere/how.

If you were able to be fairly confident of having semi-decent tenants (even if the rent was low) I think that strategy could work but I think finding tenants in this particular area would be an issue. And leaving it empty means it will be full of squatters and it will get TRASHED.

 

red flags everywhere

try getting labor.... etc etc

 

Agreed
Unless youre diy or flying in your own electrican/plumber for a day

Also given that there is a 6x2bdr unit for sale nearby i suspect the rental market is going to be dead

Also some remote towns have horrendous rates'
Plus those windows coverings are big red flag too

 

Why would you do it? Unless you want to end up in psych ward

 

I would be checking into what the neighbours are like.

 

Another one in same area

https://www.realestate.com.au/sold/property-house-wa-brockman-133677918?cid=pdp:recent-sales

$35,000 Sold on 09 Jul 2020

 

To buy sight unseen anywhere is risky. To buy sight unseen in Carnarvon is cray cray craaaazy.

 

Carnarvon is a bit of a rough town and this property is in one of the worse areas. Don't confuse it with the Pilbara which has significant industry, housing demand and good prospects for cyclical economic growth. There is some local industry around Carnarvon (fishing, horticulture, the salt works) but nothing that is going to generate much growth in the town. Plenty of tourists pass through on their way to the holiday hot spots in the region but Carnarvon is not in itself a destination. Although I like Carnarvon as a town, I would not be buying property there. A property like this in particular would be nothing but headache. If you are impressed by cheap land, I can direct you to plenty of Wheatbelt towns where you can buy blocks of land for under $20K...