QLD - Which house would you take?

Hey everyone.

Last week, I flew up to Brisbane for a few days to look around for the next investment. I found two properties that I liked and put an offer in one.

House 1 - Fresh to the market last Wednesday, it's a recently renovated 3 bedroom, 1 bathroom, double garage highset/Queenslander with polished floorboards, renovated kitchen, renovated bathroom, painted throughout, new decking, new stairs and landscaped yards. From my research, it appears the house was built around 1970's. House 1 has only one living area but a cement area underneath which is large enough to convert to a rumpus room. No garden shed. House was priced at offers over $350k but this morning the agent rang me to tell me that owner has dropped price to offers over $339k. Rental appraisal by agency: $350-$370p/w

House 2 - Been on the market for almost 5 weeks, had one contract where the buyer pulled out. It's a lowset fibro asbestos 3 bedroom, 1 bathroom, double carport (not garage) with the kitchen from the 90's and the bathroom from the 70's. There is also a rumpus room extension built to the front of the property (double brick) which was done in the 70's. With this rumpus room, that means that the house has 2 living areas. This house also has a garden shed and a 3000L water tank, along with a paved outdoor entertaining area. Originally priced at $369k (which I thought was overpriced), it has since been reduced down to $339k-$359k. Rental appraisal by agency: $375-$395p/w

My dilemma is that both agents have come back to me stating the owners are keen to sell this week (which I knew already when I inspected). I've put an offer into House 2 of $335k (agent wasn't too happy with me, but I didn't think it was worth too much more because of the fibro and asbestos) and they countered with $345k, in which I went up to $337,500, they've again countered to $340k. After speaking with the agent for House 1 this morning, I'm of the opinion I could get House 1 for around the same price.

The area is mainly highsets, with a few lowsets scattered around the place. The thing that worries me is the asbestos and fibro, but the benefit of the extra living area and outdoor patio is decent.

With the info I've provided, what would you guys do? Any feedback is appreciated and thanks for reading

 

How big is the land size for each house ? are they the same ?

@Kael Which suburb is taht ? becaus mostly the suburbs that I have made an offer is already becoming hot like in Sydney. I had to compete against 10+ with other NSW investors even after +$10-15k.

 

House 2 is literally right behind the house next door to House 1. Street behind it.

House 1 is 650sqm, with a wider frontage, and as it is highset the yard is a lot bigger. House 2 is 620sqm.

This is about 25-30km north of the CBD. Houses seem to be selling within the first week in this suburb but not as many NSW investors as Logan area (which I also visited and am still considering if these offers fall through). House 2 has been on market for 5 weeks but they did have an offer which they accepted, but the guy who put the offer in backed out apparently after changing his mind (according to the real estate). At the Open Inspections, House 1 had about 6 groups come through, with House 2 having about 3 groups come through.

 

Seems like a no brainer for me for #1. Why would you go house #2 ? Old kitchen, old bathroom, fibro.. sounds like it will need a bit spent on it, never mind the extra cost/hassle of asbestos removal.

 

That's what I was thinking but in same respect, I don't want to lose out on a decent buy just because it's not renovated. At least with renovated, there's extra depreciation, but definitely don't want to be the only factor I look at.

 

Is the crappier house in a better suburb?

 

Nope, exact same suburb and post code. Actually, it's in the street behind House 1.

 

why not both ?

 

I love the way you think ;P If only I could.

 

House #2 for me, more living space, can accommodate a bigger family, higher rent so better yield. I don't believe you need to remove the asbestos as most properties from that era has asbestos. I bought a high set property in Logan early this year and had a builder put a living space downstairs and a bathroom. He mentioned the walls were asbestos. I was shattered. The builder put me to rest by saying, most properties from that era has asbestos and I don't need to worry about it, unless I am planning on demolishing it. I left it at that. The property is currently rented out to a large Maori family and yielding 7%

 

Awesome yield, congrats on it! I agree, most houses from that time do have asbestos. Agent for House 2 is asking me to sign the contract because he says owners will accept my offer of $337,500, so I'm hoping to make a decision in next day.

 

I think I know which house you're talking about in your description. I think house 1 looks way better than house 2 for pretty much same price.. Did u get some comparables on it?

 

I'd love to be able to message someone privately to show the listings and get their opinion ;P If you have time, that is. Comparables in the area seem to be around the $340k-$355k. Hard to get a comparable on House 2 though, due to there not being anything similar on the market currently or sold within the past year or so (that I could find).

 

What does your gut say?
Go with that.
Procrastinate for too long and both might be gone.

 

I would go with House #1 renovated and you don't need to spend a dollar. People like moving in to fresh accommodation therefore easier to rent. Rents are going to be about the same. Is the highset legal height for downstairs living? If you need to add outdoor living probably a lot less expensive thatn fixing #2. Does #1 have enough frontage to add GF/ dual occ?
My partner and I spent 3 days doing opens in Logan 2 weeks ago and there honestly was no stampede of people at them, so still plenty of opportunities down there. We eventually bought the first one we looked at! Saw 4 late Fri afternoon, 15 Sat, 6 Sun and 4 on Monday!

 

House 2 sounds crap. Crap quality house, smaller block.

House 1 sounds like it's nice and has a bigger block.

I don't see the dilemma?

 

Why is the renovated house, on the bigger block, renting for less than the other?

 

Send it through if you want. I aint in a rush so wont be cutting you. If no.1 is the one I think it is I think the rental appraisal you've been given is lower than what u can get

 

The renovated one will surely be easier to let? Hopefully less maintenance?