Increase Yield

Discussion in 'Investment Strategy' started by Tony, 22nd Dec, 2016.

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  1. Tony

    Tony Well-Known Member

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    Could you do the following:

    Existing Brick Highset on 800sqm in Ipswich Council - 1 Income

    Convert the downstairs so the house is dual-occ and put a granny flat in the back yard - 3 Incomes

    Anyone done it? What are your thoughts and experiences?

    Thanks

    Tony
     
  2. MTR

    MTR Well-Known Member

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    has to be council approved otherwise not legal, otherwise you can only rent them out on one lease, hope this makes sense.

    QLD dual occ a different beast to Sydney, I would not touch it, in particular the low feeder market.

    Also.... .... 3 tenants on 1 block....... OMG, think of the massive headaches of managing this not to mention the issues than may arise just from this set up.

    Harder to rent out, more days vacant... cash flow only if rented out.

    The set up would need to have separate entries, own private space, car spaces and all council approved, and if you were thinking of this it would be far more lucrative to develop property where you can sell if you wanted separately as each has its own title
     
    Last edited: 22nd Dec, 2016
  3. Tony Fleming

    Tony Fleming Well-Known Member

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    Not too familiar with Queensland market but granny flats just don't seem to be worth it. You could put that capital elsewhere and get a better yield. Plus as @MTR said 3 tenants on one block would cause some chaos.
     
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  4. jprops

    jprops Well-Known Member

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    I thought that was BCC.. not QLD
     
  5. MTR

    MTR Well-Known Member

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    ?? I thought it was QLD? perhaps someone can confirm
     
  6. MTR

    MTR Well-Known Member

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    been down this road, dual occ, got rid of it within 12 months, hit and miss with tenants, its not easy to rent this product at least this is what I found out. As I mentioned Sydney dual works beautifully, larger city, renters always looking for cheaper options.
     
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  7. D.T.

    D.T. Specialist Property Manager Business Member

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    Yep, can confirm Brisbane is in Queensland
     
  8. Scott No Mates

    Scott No Mates Well-Known Member

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    Have you got the longs and lats?
     
  9. MTR

    MTR Well-Known Member

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    LOL, you are naughty
     
  10. RetireRich101

    RetireRich101 Well-Known Member

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    Best use is put the main+downstairs on ONE lease and the new Aux unit on 2nd lease.
    You have to do your own diligence to see if there is a demand. The main + downstairs are popular in Logan, not sure in Ipswich. It's not niche market when you come to think of it, so many families have responsibilities to look after their parents as they get old...

    Another concern with Ipswich is they recent scaled down the size of the aux unit to 50m2(?) and that is not enough for 2bed dwelling
     
  11. MTR

    MTR Well-Known Member

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    Rich

    Do you own something like this ?

    I would call it niche only cos its not the norm, ie renting to family?

    MTR:)
     
  12. HUGH72

    HUGH72 Well-Known Member

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    Development : Ipswich City Council

    Ipswich City Council website would be a starting point.

    When you can rent a 3 bedroom entry level house for $300 per week I can't see why there would be much demand for this kind of set up other than for extended families. Building a duplex or triplex might be a better alternative
     
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  13. RetireRich101

    RetireRich101 Well-Known Member

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    Had 1 of the above highset dual living and another regular 3bedder in the same LGA on the market at the same time. The highset dual living got snap up quicker...one reference doesn't represent all, I probably got lucky.

    BUT in this post apra, we need to increase income.
     
  14. MTR

    MTR Well-Known Member

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    That's good, perhaps I just had a bad experience.
    My property was house and g/flat very difficult to rent.
     
  15. RetireRich101

    RetireRich101 Well-Known Member

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    Yes the area you had the dual living in QLD was more of a OO....
    People bag about Logan as high investor activity, but it also have high renter pool don't forget. Despite this bagging the vacancy rate is at 2% consistently.
     
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  16. MTR

    MTR Well-Known Member

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    That is good. I never bagged Logan, there were a couple of other areas which I bagged but not Logan:)
     
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  17. RetireRich101

    RetireRich101 Well-Known Member

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    not disagreeing, but let's look at the 2 scenarios...

    #1 - retain existing, build underneath and granny flat
    $300k - existing house on 800m2, rent $300
    $50k - done up down stairs
    $350k total, achieving $450 rent...

    $100k - Build 50m2 granny flat, rent $300

    $450k - total outlay, $750 rent 8.6% yield


    #2 - demolish and build duplex
    $300k - existing house on 800m2
    $20k - demolish
    $380k - build duplex, rent $700
    $28k - infra fees.

    $728K - total outlay for duplex, $700 rent, 5% yield

    There is obviously pros and cons with either above scenario depending on what stage of your investment journey whether this be acquisition or consolidation...
     
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  18. HUGH72

    HUGH72 Well-Known Member

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    That's true, I still prefer option 2 though. The new building means 40 years of depreciation at 2.5% plus all the fixtures and fittings over a shorter time frame. It would be negatively geared but strongly cashflow positive, tenants would be probably be easier to find and there would be little if any maintenance for the first 3-5 years.
    I doubt a GF in Ipswich would fetch $300 per week but I could be wrong.
    Option 1 is a great cashflow option if suitable tenants can be found, extended large families, elderly parents etc.. It seems to work a treat in Logan though.
     
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  19. RetireRich101

    RetireRich101 Well-Known Member

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    don't forget the granny flat + the build underneath would also attract a depreciation schedule that is not far fetched from a duplex...
    depreciation is overrated, IMO, as portion of it are incorporated in your CGT when you decide to sell...
    even GF receives a rental of $250 , it' still a 8% return
     
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