Valuation after renovation

Hi,
I have just finished a full renovation on my Queenslander house in North Ipswich. The house is in immaculate condition, high side of the street with views of mountains, close to shops, schools, transport. 4 bed, 2 bath 1 car, and will be up for rent once my agent is back to work in the new year.
I wanted some feedback on how valuations stack up to sale prices as I will be looking to pull out the equity and re invest.

I have two agents who are confident they could sell the property for $450,000, so this is what I am setting my bench mark from. I would be happy with a valuation of 400-430. Do you think this is achievable based on expected sale price?

I would be interested in people’s experience with valuations vs expected sale prices.

Thanks,

 

Generally if there's sales evidence, it should come in reasonably close to sales price. Those expectations seem fair. From a finance perspective, we see spreads between 5-15% fairly commonly on the same security. It will likely be on the lower end at these values.

The best way to manage this is to have multiple valuations ordered and go from there.

 

Hi Redom,
Thanks for the info and great tip with multiple valuations.

Typically will banks take the loan up to 95% when releasing equity? When I took the loan out 4 years ago, I had a LVR of 95% and obviously payed the LMR with it. I would like to release as much equity as possibly and have it in my offset ready to re invest when I find my next opportunity.

 

90% max typically. Many lenders wont allow revaluations within 3 or even 6 months. some lenders allow it on day 1 after settlement.

Watch of for the tax issues surrounding 'releasing equity' and parking in an offset account.

 

Did you recently purchase ?
Or did you reno it after having previously rented it ?

 

I purchased the property in October 2016. I lived in it for 4 years while I renovated it and recently moved out. I plan to rent the property from now, and don’t plan on selling in the foreseeable future.
What are your thoughts stoffo?

 

Having been a PPOR you need to be clear on your path prior to it becoming an IP, and have a plan moving forward.
Obtain written certified valuation and a depreciation report, as this will all establish a base for cgt when it is one day sold, and make claiming easier at tax time.
*I have used @Depreciator (and they offer a discount for PC members)
Will also be handy for refinancing, as it will give you an idea of what the bank will come in near...

 

Hi Stoffo,
Yes ageee and am aware of how the cgt system work and that I would be exempt for the 4 year period I lived in the house. From the point it becomes an IP to the day I sell is the portion that the cgt will be based on.
I have already engaged BMT to do a depreciation report but thanks for the referral, I will keep them in mind for the future. BMT said they wait until the property is rented and then do the inspection.
Thanks for your feedback!

 

Get them to do the inspection BEFORE the property is rented - it's so much easier to do that stuff when the owner is there vs tenants. You will be able to talk them through what you have done. Depreciation will start when the property is 'available to let'.
Scott