As a leading Brisbane buyers agent, we regularly review Brisbane properties that are smart buys. This property, 17 km south of the CBD, has the ability to create value. Sub-divide for a second dwelling. This is a post-war home with some money to spend on initial repairs. It’s located on a quiet street comprised predominately of post-war timber homes. This is a well-kept home for investors or buyers on a limited budget.
As a leading Brisbane buyers agent, we classify this as a smart buy because of its:
Location:
- Approximate distance to:
Brisbane CBD 17 km Train station 4 km Major shopping Ctr (Westfield) 9 km Second tiered shopping/cafes 3km Hospitals 6 km Homeowner: Investor ratio 57:43
Construction and fit out:
- Low set post-war home with 3 bedrooms, 1 bathroom, 4 car accommodation, overall in fair-good condition
- Polished timber floors and paint both internal and external in fair condition. However, would benefit from internal paint.
- Semi-modern kitchen and bathroom
- Built-in Cupboards
- Insect screens/security screens
- Air conditioning to bedroom
- Solar panels 1.5Kw system
- Predominately fiber cement linings internally (i.e. asbestos)
- Concrete stumps, copper plumbing and modern cabling (no long-term need to replace).
| Ease of renovating / construction / cost effective | Moderate |
| Room sizes | Fair |
| Family-friendly | Excellent |
| Storage | Excellent – storage located under home for tenants to settle in long-term |
| Future development opportunity | Excellent sub-divided |
| Modern-day utility compliant | N/A |
| Asbestos sheeting | Yes |
| Underground services | Good |
Key Considerations:
The following foreseeable items require consideration. A ballpark estimate of repairs has been included where applicable. The estimate is an approximate guide only:
- Internal painting – $3,500
Land:
| Orientation | south-east |
| Area | 809m2 |
| Elevated / Outlook/views | No |
| Shape of parcel | regular |
| Topography | Slightly undulated |
| Drainage | Fair |
| Privacy | Average |
| Zoning | LR, |
| Easements, Encumbrances | unknown |
| Other town planning consideration | nil |
| Family compatible rating | good |
| Flood/overland flow affected | nil |
| Risk of negative local development | Nil |
Growth Potential / Value-adding Opportunities:
There is an opportunity to add value to this property by:
- Demolish and sub-divide the land to construct 2 new dwellings.
Fundamental figures:
| Rental return (gross) | $20,800 pa |
| Rates (approximate) | $1,200 pa |
| Property Management (10%) | $2,080 |
| Insurance allowance | $800 |
| Immediate capital cost (internal painting) | $3,500 |
| Expenses to expected income ratio | 20 % |
| Growth in the immediate location for unrenovated post-war homes: | |
| 1 year | 2% |
| 5 years | 36% |
| Demand Metric: | |
| No. of sales 2017 | 135 |
| No. of sales 2016 | 136 |
| No. of sales 2015 | 141 |
| Similar properties currently on the market | 5 |
| Tax depreciation full year claim | $800 pa |
Feasibility Analysis
| Notes | ||
| Suggested offer price | -$ 420,000 | |
| Stamp duty, other fees + legals | -$ 17,500 | |
| demolish | -$ 20,000 | |
| Construction cost dwelling 1 | -$ 190,000 | Refer attached builders cost for suitable 4bedroom, 2 bath, 2 car dwelling |
| Construction cost dwelling 2 | -$ 190,000 | Refer attached builders cost for suitable 4bedroom, 2 bath, 2 car dwelling |
| Sub divisional costs | -$ 60,000 | BCC fees |
| Extra costs of building associated with BCC utilities | $ – | Bridge over council utilities |
| Capitalise construction interest | -$ 15,000 | |
| Contingency allowance | -$ 10,000 | |
| APPROXIMATE TOTAL COST | -$ 922,500 | |
| Value Block A | $ 485,000 | Refer attached sales data |
| Value Block B | $ 485,000 | Refer attached sales data |
| APPROXIMATE TOTAL VALUE | $ 970,000 | |
| APPROXIMATE EQUITY / unrealised PROFIT | $ 47,500 | |
| ROI | 5.1% | |
| 1.) Cost values utilized for calculations are an approximation only and are for a standard level of | ||
| amenity. Values contained herewith may vary outside the ranges indicated. | ||
| 2.) While all reasonable care and attention has been taken in the compilation of this document, the | ||
| report provided is intended to be used only as a guide. It has been prepared from unverified information, | ||
| incomplete data and estimates and provides only a broad range of figures which are intended to be | ||
| indicative and not precise. Brisbane Buyers Agency makes no representations or warranties about | ||
| the document’s accuracy, reliability, completeness or suitability for any particular purpose and disclaim all | ||
| responsibility and liability (including without limitation liability in negligence) for all claims, expenses, | ||
| losses, damages, and costs which you may incur as a result of the data being inaccurate or incomplete in any way. |
Value for money:
- A subdividable parcel of land
PROPOSED OFFER PRICE
Please find attached a copy of the comparative market analysis (CMA). Attached you will find some important information which I can explore further with you. I can also provide you with personal access to CoreLogic’s RP Data so that you can also conduct your own real-time research should you choose.
Please note we use recent sales and other factors to develop an offer we believe is appropriate for the home we are analyzing. The appraisal range is based on current market conditions as at March 2018, being the preparation date.
Providing a range is part of our buying strategy. The upper limit of the range provided is the most I would recommend spending on this home.
OTHER DATA AND COMMENTARY
Attached to my email is:
- Location of underground services
- BCC zoning details for the immediate location
FEEDBACK
I would appreciate your feedback on this property so that we can refine our search for you even further. Please call me on 0409 499 034 at your earliest convenience.
Suitable for:
- Property investors
- Developers
Would You Like Help Buying Your Next Brisbane Property?
If you valued this Brisbane Property Investor Insight call us to discuss your needs for your next property investment or family home. We’re happy to offer you a free “What to Buy and Where Property Strategy Session”.
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You’ll leave this session knowing where it’s best to buy in Brisbane, what’s happening with Brisbane house prices right now, and exactly the property you need to help you grow a strong financial future and property portfolio.
To book your “What to Buy and Where Property Buying Strategy Session” register at the form below, call me at Brisbane Buyers Agency on 0409 499 034 or email paul@brisbanebuyersagency.com.au.
Purchasing Steps
FINDING YOUR NEW PROPERTY
Purchasing residential real estate can be a very exciting process; however, it can also be a confusing and stressful time for prospective buyers. This purchasing guide is designed to inform you of the buying process.
MAKING AN OFFER
When we have found the property that you wish to purchase, it is critical that you understand the steps that are involved in securing the property.
Firstly, it is important to act quickly. Great buying opportunities do not always last long on the market. Many past purchasers have missed out on properties by a matter of days, even hours just because they feel they do not need to.
GENERAL TIPS
If you want to make an offer, be certain that the following items have been arranged or confirmed:
- Pre-approval of finance from your mortgage broker or lending institution
- Have a solicitor or conveyancing clerk in mind if you choose not to use our recommendation
- Have your initial and balance deposits ready
- Have an idea of the settlement date
- If applicable, have your own property sold, or be ready for sale. We can help guide you here.
- the Client will respond to the Agent in a timely manner in respect of the suitability of any properties presented to the Client and provide feedback and suggestions to the Agent in respect of any such properties.
OFFER, NEGOTIATION, ACCEPTANCE
In Queensland, all offers must be in writing and presented on a contract. When the approved contract is completed, the agent can then contact the seller and start the negotiations. The seller can then do one of three things:
- Accept the offer – in which case you are bound by the contract.
- Reject the offer – you can then resubmit another offer or we continue the search.
- Counter the offer – the seller puts down their counterterms, in which case you can then either accept or counter the offer.
Please remember that people make decisions at different speeds. It is best to start thinking about our next move prior to hearing from the agent.
BUYING AT AN AUCTION IN QUEENSLAND
If you’re intending to buy at auction, all the above-mentioned must be in place including obtaining a building and pest report. Auction day is final. If we turn up to bid, we MUST register with the Auctioneer before the auction commences. We have additional documentation to be completed should we decide to buy at auction. If we are the highest bidder and have bought the property ‘under the hammer’, you are the instant owner awaiting settlement of that property. We do have the option to seek conditions prior to the auction which will need to be approved by the vendor.
THE CONTRACT
We will either sit down with you to go over the Contract of Sale or send it through to you along with instructions as to how to correctly fill it in.
Here you will insert your offered purchase price, the time frame for Finance, or Building and Pest Inspections, and any special conditions that are necessary.
The agent will then present your offer to the seller, and if the offer is accepted and signed against by the seller, the property becomes ‘Under Contract’, and that date is said to be the ‘contract date’.
You should obtain:
- Independent legal advice (solicitor/conveyancing clerk)
- Independent valuation of the property (usually arranged by your bank/financial lender)
- Independent building and pest advice
THE COOLING OFF PERIOD
A five business day period which starts on the contract date, wherein the purchaser can terminate the contract on the property for any reason. This can, and usually will result in a termination penalty equal to 0.25% of the purchase price.(0.25% of $500,000 is $1,250)
NB: If the contract date is a business day, that day is included in the cooling-off period.
INITIAL DEPOSIT
Payable within 1 business day or as specified from “Contract Date” – when the Buyer and Seller have agreed and signed the terms and conditions of the written Contract.
BALANCE OF DEPOSIT
Payable within 1 business day or as specified of the unconditional date of the contract.
BUILDING AND PEST INSPECTION
It’s up to the purchaser to arrange a Building and Pest Inspection for the property you have a Contract on. The standard time frame for this inspection to be undertaken is by 5 pm, 7 days from the contract date.
VALUATION/FINANCE
Don’t be alarmed if your bank or lending institution requests a valuation by a registered Property Valuer. This is standard practice in all states of Australia especially if you’re borrowing more than 80% of the purchase price of the property. The Valuation Inspection will be arranged by your bank/lending institution usually within 14 days of the contract date. It is important to ask your mortgage broker/banking institution how many days they will require so we can make adjustments to contract.
INSURANCE
Please note, the property will pass to your risk from 5 pm on the next business day, after the contract date. This means that you must get insurance on the property. In apartments, the body corporate will cover the building ’s insurance, however, you must insure the internal contents of the property (e.g. carpet, window furnishings etc).