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improving returns on a property

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  • improving returns on a property

    Hi all, i have a property in the point england area which is sitting on a subdivisible site (~2000m2). I am not planning to carry out any subdivision works as the building industry is so heated right now and everyone's too busy/overpriced. What would be a good way to improve the returns on the existing property (a 5 bedroom house) and a huge garden area?

  • #2
    Wow nice property.

    It is a good time to do anything that you plan to sell down after, you'll more than make your money back. Hard to imagine the market will cool down after the PAUP becomes reality.

    Anyway, common ways to improve returns are to add bedrooms, rent by the room, add sleep out etc. I have no idea about what is possible in Pt England. Fixing to the lowest possible interest rate would be a start.
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

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    • #3
      I would re think the subdivision idea as that would be a great way to increase yield. Phone a local surveyor to get an idea of what you could do. We relocated a second hand house which can be a cheaper way to go. It could be possible to do that prior to subdivision depending on zoning - surveyor would know.

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      • #4
        You could just get consents etc in place. Not do any actual building.

        A surveyor, a planner, and an architect are the people you need.
        Squadly dinky do!

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        • #5
          What Davo said.
          You need to think about the tax angle though.

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          • #6
            I would put a couple of new 50sqm prefab houses with a shared driveway , write a cross lease and put each of the new houses on the market for auction and keep the original house.
            Profiting from Property, not People

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            • #7
              Thanks for your replies. I'm looking to hold on to the property, hence not planning to build new houses and sell them. what'd be the best way for cash flow returns in today's market where building costs and tradespeople are getting really busy.

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              • #8
                Originally posted by thenztrade View Post
                Thanks for your replies. I'm looking to hold on to the property, hence not planning to build new houses and sell them. what'd be the best way for cash flow returns in today's market where building costs and tradespeople are getting really busy.
                Turn each of the rooms into an Airbnb type tenancy.
                Profiting from Property, not People

                Want free help on taking your portfolio to the next level?

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                • #9
                  Thanks Dave, i did consider that rent-by-room option however as its in the point england suburb, i wasnt too sure about the type of tenants who will be living there. Any experience with renting-by-room in the suburbs around GI/Point England/Panmure?

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                  • #10
                    Put a caravan on site and rent it out and / or rent the 5 bedrooms out.

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                    • #11
                      There's a scarcity of accommodation. Renting by the room will work anywhere. Check the Airbnb site for your area. Caravan is also an option but they will need to share the bathroom and laundry in the house .. conversion of the laundry into a bathroom/laundry is often a good idea.
                      Profiting from Property, not People

                      Want free help on taking your portfolio to the next level?

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                      • #12
                        You don't want to stuff up the subdivision potential so why not get consent to build another dwelling and build without doing full subdivision. That would have to be the best way to get a good return on your money now and not devalue the site. I am assuming the existing house isn't int he way of adding another dwelling in the right place.

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                        • #13
                          You mention being worried about overpriced builders and contractors.

                          Have you tried getting a quote to see how the extra rent on say a minor dwelling compares to the cost of completing it? You could also look at buying a ready made house and moving it on. For example there is a company on the main street through Huntly selling these.

                          Ross
                          Book a free chat here
                          Ross Barnett - Property Accountant

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                          • #14
                            MDU cost around 220K, rent $400 a week. Re-siting a house is a better option by far. Could be all in at well under 200K and rent will be closer to $600 a week. I am assuming you can still obtain resource/building consent without having to subdivide. If no then cost of buying/resiting house and subdivision will be at least 300K maybe 350K.

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                            • #15
                              From costs above

                              - 9.1% gross yield on Minor dwelling based on 50 weeks
                              - 16.7% gross yield on re-siting a house based on 50 weeks and $180k cost

                              So what I'm trying to say is rather than focusing on whether the builders and trades persons are overpriced, look at how it works for you. Based on numbers above it gives you a nice yield and therefore nice extra cashflow with current interest rates below 5%!

                              Ross
                              Book a free chat here
                              Ross Barnett - Property Accountant

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