If you’re looking for Brisbane’s next property hotspot – check out this week’s featured “Investment Property Buy of the Week.” It’s a personal favourite in terms of investment options.
This week’s featured property is a post-war home on 810m2 suitable to sub-divide and develop 2 modern residential dwellings. It’s 12 km from the city in a quite suburb comprised of post-war homes and slowly emerging medium to large contemporary family dwellings. It was recently purchased for $580,000 with a potential capital gain of approximately $132,700 within 12 months.
This is a great example of a smart buy and how you can develop for profit or hold long term and develop in the future. These double blocks are my favourite investment option!
This property is a smart buy because of its:
- Approximately 12 km from Brisbane CBD
- Close proximity to major shopping district, neighbourhood shops, schools, cafes and parks.
- Leafy suburb predominantly occupied by families
- Land area – 810 m2
Construction and fit out:
- High set post-war home with 2 bedrooms, 1 bathroom
- South easterly aspect
- Demolish existing improvements to construct 2 contemporary dwellings and profit
- Hold long term as development stock in this location should strengthen in demand as supply shrinks
- Rental return in the order of $300 per week
- Local authority rates approximately $1800 per annum
- Tax depreciation benefit first year – $nil
- Tax depreciation benefit (10 year accumulative) – $nil
- The immediate location for unrenovated post-war homes on land with 810m2 has seen 29% growth in the last 3 years. Equivalent homes 3 years ago were selling for approximately $450,000.
Value for money:
- The home is already surveyed into 2 allotments saving the expense and town planning involved to split the block into 2 parcels. That equates to a potential saving of approximately $20,000-40,000.
- Supporting sales data (the most recent sales of brand new modern dwellings in the immediate area) include:
- 400 m2 sold August 2016 4 bedroom,2 bath, 2 car home – $688,000
- 450 m2 sold July 2016 4 bedroom, 2 bath, 2 car home – $692,000
- 405 m2 sold January 2016 4 bedroom, 2 bath, 2 car home – $793,000
- 405 m2 sold September 2015 4 bedroom, 2 bath, 2 car home – $720,000
- Supporting sales data (the most recent sales of post-war semi renovated dwellings in the immediate area) include:
- 405 m2 sold May 2016 post war 3 bedroom,1 bath,1 car home – $495,000
- 405 m2 sold June 2016 post war 3 bedroom,1 bath, 1 car home – $469,000
These sales have been included to illustrate the value of buying a double block post war home if your budget can stretch further.
- Property investors
DEVELOPMENT FEASIBILITY ESTIMATE
The following is my estimate of the feasibility of this as a development opportunity:
INITIAL ACQUISITION COST
Purchase price $580,000
Add for stamp duty and transfer fees $20,800
Total acquisition cost $600,800
Demolish existing dwelling – $18,000 (note: it may be possible to sell the dwelling or have a relocation firm remove at no cost depending on quality of home)
Town planning / subdivide land parcel / BCC headwork fees – 10,000 (block already 2 parcels, services are conveniently located with existing connections)
Construction cost of modern 4bedroom 2 bathroom, 2 car garage approximately 230m2 GFA turn key – $300,000 per dwelling
Total costs $628,000
POTENTIAL GROSS SALE PRICE ON TWO NEW HOMES
The potential sale price for two x brand new 4 bedroom, 2 bathroom homes would be $700,000 each (refer supporting sales data above)
Less sales agent commission $19,250 x 2 (total $38,500)
Net sales amount $1,361,500
ESTIMATED CAPITAL GAIN in 12 months $132,700. This is based on net sale amount of $1,361,500 – ($628,000 + $600,800)
How do we know this is a smart buy?
We put this property through our proprietary property analytics tool, our Smart Buyers Index and believe it was a great opportunity for property investors or developers. Our Smart Buyers Index gives our clients the inside running on smart buys in Brisbane. We’ve developed it from our more than 20 years in the property industry working as a registered valuer, quantity surveyor and in sales. When you work with us that means you can tap straight into our experience and save yourself loads of time, money and frustration.
Would you like help with your next investment property purchase?
As a property buyers agent based in Brisbane we are totally committed to helping you make a smart buying decision on your next property purchase. We act independently and only select homes that meet our strict ‘smart buying’ criteria.
Our clients’ regularly tell us they engaged us because they were frustrated, and at the end of their tether, looking for a property in Brisbane that suited them. They were sick of wasting their time at weekend open homes and in the evenings – time that could be better spent with their loved ones.
We’d love to help you make your next Brisbane property investment or home purchase.
How do we work with you?
At Brisbane Buyers Agency, we help our clients make smart property decisions as easily as possible. We have a proven process and are highly experienced negotiators who regularly save our clients money, time and frustration. Our proprietary property analytics tool, the Brisbane Buyers Agency Smart Buyers Index, gives our clients the inside running on the true Brisbane property hotspots. We work on a flat fee arrangement, we do not work on commission, so you know exactly what your costs will be.
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