Investment Properties

Duplex with the Lot – Renovation, Strata Title AND Cashflow!!

This solid 2x2 bed duplex provides a range of options that you can do now or do later, the choice is yours.
One side of the duplex has been refurbished. The other side has had some refurbishment started, however, could still benefit from some dollars being spent, in particular, on an internal paint, carpets and window treatments. Both units have their own individual back yards and sheds, which makes them a really appealing rental. They are also located in a very good part of town.
Currently, both units are vacant, and have been left so while refurbishment work has been undertaken. As is, the fully refurbished side, has been rent appraised at $350/wk, with the other side at $320/wk “as is”. If the second side has the above mentioned items completed, it too has been appraised at the $350/wk in rent. Knowing this area, we feel the $350/wk is probably a little high for the market at the moment, and would estimate closer to the $320/wk as achievable. At the listed price of $365,000, that provides a gross return of 9.1%.
So, as is, it provides a nice return. However, it doesn’t end there.
If you were to purchase the property for around $320k, and hold it, at $320/wk this provides a 10.5% gross return, and at $350/wk this provides a 11.4% gross return.
Alternatively, if you purchase the property for around $320k, include calculated purchase, selling, refurbishment and strata costs (our estimations put this around $60,000), and then sell one unit at around $240k, you would be left holding one unit at around 13% gross return at the then $350/wk, also with some equity to be realised in the property.
In a regular market in this town, we would also expect to achieve a rental closer to $400/wk - $450/wk, and an individual sale price between $240-260,000 per unit, so there is also the option to do nothing for a while and collect the cashflow and realise the potential down the track.