First time poster but lurker. Have done the intro in the intro thread( Duh.. ) and now putting my scenario out for perusal by some experts. We have a PPOR on 918m2 in Camillo ( yes I have heard all the bogan jokes ) but the 1st wife took the lionshare of the money and the house. Current family wants a new house and my plan is to demolish and build on the front but giving sufficient side clearance for a battleaxe later. The current house is a small 3x1 and the costs of adding a larger kitchen/living, adding another bedroom/ensuite plus reno the rest would appear to near exceed the cost of a new house. In the configuration it is in there is easily enough room for a rear block but would have to pull the pool and my beloved workshop which atm is too much for me to bear. So options are 1) sell but will only just achieve initial purchase price ( purchased 2012 for $290K ) 2) Reno and extend ( think maybe $180K ) but still have an old house with new bits 3) Demolish and rebuild ( think maybe $240K ) but have a new house Option 2 and 3 give the opportunity later to subdivide and build at the rear when the kids get older and a pool is not so important. Ok people , ideas, thoughts, advice . Cheers Ken
Option 1 seems like the obvious one to me, unless you are dead set on keeping your current location. Options 2 and 3 are missing financial feasibility numbers - at least option 1 has some financial certainty.
Yes , unfortunately you are probably correct. Thanks for the reply. Difficulty is any other option will probably involve a cookie cutter house in a even further fringe area with no backyard... Cheers Ken
Assuming developing works from a financial perspective, why not look at doing that, selling both and upgrading that way? You might find you can pocket some cash and get into a bigger block. But it’s important that the numbers work.
ATM leaning towards reno as upselling and paying stamp duty , agent fees etc is outside the budget. Is it better to get an architect or draughtsman to design the reno or just go direct to a reno specialist builder. If so , any suggestions on who is good . Nothing high end ( because the area does not warrant it ). Is it even something a building broker would look at ? Cheers Ken
Hi Ken, As above, It's too hard to tell with the limited information. I do have a bit of experience in those areas both as a builder and a developer in these areas, so here are a couple of points worth considering: 1) It is unclear to me if you are doing this for lifestyle or for profit. It is almost never a good idea to try to do both at the same time because you end up with something that doesn't make much money, and you are not happy with. Obviously, sometimes compromise is necessary, but as a starting point, decide on your why. 2) Renovations rarely work in those areas because they rely on emotional buyers, and these areas are largely driven by affordability. 3)I think I read that you own next door in another post? If so, probably worth looking at the bigger picture first, before getting into scenarios I hope this helps Warm Regards, Angad Singh
Have you considered sub dividing the property for land only and then sell land and existing property? Numbers would need to stack up though.
I agree with this 100% Pick one and go with it but don't try and do both at the same time - they will be at cross purposes.
Hey Ken, I suppose you need to break down each option to help your head and heart make the decision 1. you know the answer - break even 2. what is the end value of renovated house minus what you paid for the house and the cost of the renovation = profit 2a. what is the end value of revovated house + end value of a vacant rear block minus costs (allow $25k to create rear block) 2b. what is the end value of renovated house + end value of a rear build minus costs 3. what is the end value of demolish, rebuild house 3a. what is the end value of demolish, rebuild house and sell rear vacant land 3b. what is the end value of demolish, rebuild house and build in rear and sell Let's add a few others 4. keep existing house, clear the backgarden and build yourself a new house at rear there might even be room to assign the pool to the rear house depending on positioning I was born in Kelmscott - I won't hold Camillo against you
Angad Thanks for taking the time to reply. Unfortunately it is atm a lifestyle choice due to a youngish family BUT I still want the ability to try and turn a profit if the market ever improves. Yes I do own next door ( well me and mainly bank.) but both are zoned R 15/25 and the two blocks are 1601 M2 so from my limited knowledge that will only give me 4.5 units. Other side of Westfield Rd is R40 so you never know... Cheers Ken
Westminster Also thankyou for taking the time to reply I am still sorting through all those options but none will probably make me any money atm. 2B would probably be the one that returns the best profit ( or the least loss) as long as the reno remains cosmetic. The pool idea is a good one but it takes up 45m2 and is in the middle of the potential rear block. Yes it is a big one... Started in Kelmscott ay? Bet your not here now though I started as a Morley boy and wished like hell I was still there . Mum and Dads house would have been worth a fortune now. Cheers Ken
Colin Thankyou for taking the time to reply. Yes I have but atm the numbers probably aren't there as you would drop $60K on making the front block small with a average 3x1 on it and the rear battleaxe is probably only worth $110K as vacant green title. Take out around $30K for costs including water authority headworks contribution there is not much left.
Oooh is there is a 5th option to leave the 2 existing houses and put a house in between so it would be 3 with street frontages?
Jess Thankyou for taking the time to reply. As sort of stated above the numbers probably don't work atm but will keep working on them. Subdividing and building at the back will mean I have to go to the finance person. If subdividing and selling vacant land see the above post. Cheers Ken
Westminster It would have to be a VERY skinny one as there is only 6 metres between the 2 houses. Cheers Ken
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