A Diamond in the Rough

21 Sep 2016

Video



Over the next three months we will be profiling a recent purchase and renovation project we have managed for a client. This small renovation has seen an amazing transformation to both the look and value of the property.

As a client of Hot Property you would know that we don’t just find you an investment property but we work with you on creating a property portfolio. This can mean different things to different people depending on what your long or short term goals are.

 In 2015, we began working with a new client who was looking to build a strong property portfolio. He currently lives and works in the Oil and Gas industry overseas. He was keen to invest in the Brisbane property market but the tyranny of distance made the search more complex. He didn’t want to leave it too late to find an investment and needed someone on the ground he could trust.
He was referred by his brother so he had an understanding of how Hot Property was able to assist.
As this was his first step in the property market we needed to formulate an investment plan for him. By determining his needs and goals we began to build an investment strategy. We then assessed his borrowing capacity which narrowed down types of properties we should be looking at.
The formulation of an investment strategy is imperative as this drives the search.
Knowing his investment goals, we knew this property was going to be a stepping stone to future purchases. This meant that this first property needed to be a strong performer, with good investment fundamentals and excellent prospects for capital growth.
From this we decided to allow for a budget of under $500,000 plus an additional $50,000 for some possible renovation.
Knowing the market well we were able to easily identify the suburb of Zillmere, on the Northside and about 14 km from the city. This is a key location as the suburb still has strong potential for capital growth, and offers affordable entry price points on homes.
After a few weeks of searching we found the ideal property. It was a 3 bedroom plus study, 1 bathroom and a single car garage all on a generous 607m2 corner block.
The property also featured a great elevation and suburban outlook with views to west of Brisbane, towards the mountains. The property was a diamond in the rough. As we had already discussed and agreed on a possible renovation budget we were able to confidently present this to our client for his consideration.
Considering the size of the property and elevation this opportunity was exciting.
We secured the property for mid – $400’s which was well within our client’s budget, the property was already tenanted yielding $400 per week, which was a strong rental return given it was not renovated. The client’s gross rental yield worked out to around 4.6-4.7%.
At purchase the building and pest inspection revealed a few items of maintenance that we noted and decided to factor into the scope of renovations. The property was tenanted with the lease not due to run out for another few months. This was ideal, as it allowed us time to plan the renovations and hit the ground running as soon as the tenant vacated.
We identified that this property was unique for the area given its larger than average floor area, corner block and elevated position, also that most of the renovations would be cosmetic and give good return for investment.
The property search, purchase was completed all whilst our client lived overseas. The Hot Property team managed also took over property management upon settlement to assist in the forward planning of the proposed renovation, and coordinate the outgoing tenant.
Stay tuned as next month we will take you through the next phase of the renovation project.


Let's Get Started.

We want to know more about you.

I am a Home Buyer looking to buy a house in Brisbane for $400k-$600k.
Enquire now!