Are 2-Bedroom Properties a Good Investment?

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  dcep on 09/02/2020 - 13:15

  standalone or duplex / townhouse ? CMS strata titled ?

  • 

    [Deactivated] on 09/02/2020 - 13:17

    A house on a private property. There is no townhouses on the street.

    Edit: The land was subdivided about 5 years ago. So the house is new.

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  oscargamer on 09/02/2020 - 13:19

  Is that a house or a cupboard?

  The garage is 1/4 of the space….any chance you could convert the garage to a liveable space?

  • 

    [Deactivated] on 09/02/2020 - 13:20

    Liveable space for what?

    The house actually feels surprisingly spacious and light-filled.

    • 

      sparkles on 09/02/2020 - 13:22

      +2

      Into the third bedroom the tenant wants. LOL

      • 

        oscargamer on 09/02/2020 - 13:23

        This…………

      • 

        [Deactivated] on 09/02/2020 - 13:25

        -1

        A 6m x4.2m bedroom? He may want a 3-bedder but he can't afford one. Should also add that the house was build in 2015, so newish and doesn't actually need renovation. But definitely an option to consider if I was to buy it and then later sell. Cheers.

        • 

          oscargamer on 09/02/2020 - 13:32

          +1

          @[Deactivated]: Wow……think outside the square would you.

          It would cost very little to throw up a partition wall and make two rooms. One bedroom (convert garage doors to windows), the other could be storage / proper laundry / second shower/toilet.

          What has the age of the house got to do with anything?

          But my question was about whether it allowed to be done. ie. does the construction of the garage, permits it to become a liveable space?

          3 beds = higher rent for you. Your proposed tenant might not be able to afford, but there are others I believe.

          • 

            [Deactivated] on 09/02/2020 - 13:46

            @oscargamer:

            But my question was about whether it allowed to be done. ie. does the construction of the garage, permits it to become a liveable space?

            It would have to be subject to council approval. I also don't have the ceiling height in the garage but my guess would be 2.4m. So yes, doable. Although , that laundry would be windowless - so still a cupboard , just a bigger one.

            3 beds = higher rent for you. Your proposed tenant might not be able to afford, but there are others I believe.

            Tbh, I'm only considering buying to help this mate out. Was hoping I could get away with just a fresh coat of paint and replacing the fake lawn in the backyard.

            • 

              oscargamer on 09/02/2020 - 14:02

              @[Deactivated]: In that case, paint away.

              I guess if it was me, I would be very interested to get a professional opinion as to whether the garage could be made liveable before I bought (it's more than just ceiling height that matters). My thought is that when it comes time to sell, if i could spend a moderate amount to get a lot more in return, then that would sweeten the initial deal.

            • 

              saltypete on 10/02/2020 - 09:48

              @[Deactivated]: If you are considering changes, and the property is not too old, see if you have access to building plans. I am pretty sure that the underfloor treatment of the garage is important if you want it habitable.
              Also, if you do not intend to live there, but the layout is decent and logical it won’t matter to a tenant so much.

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  Seraphin7 on 09/02/2020 - 15:26

  Are 2-Bedroom Properties a Good Investment?

  Yes. No. Maybe. It depends.

  Tbh, I'm only considering buying to help this mate out.

  That's called charity, not investment.

  • 

    [Deactivated] on 09/02/2020 - 16:17

    That's called charity, not investment.

    I am going to be charging him rent. I will sell the property at some point and hoping at the very least to break-even.

    • 

      Seraphin7 on 09/02/2020 - 16:29

      +3

      I'm sure you are, but as soon as you're doing things to "help someone out", rather than seeking to maximise your return, that's charity, not investing.

      That's not to say you shouldn't do it, but be very clear on what you're getting yourself involved in.

      Let's be blunt here, you're not lending someone $1,000 because their fridge has packed it in. You're considering buying a house (how many hundreds of thousands of dollars?) for the sole purpose of renting it to a single individual (a "mate") who doesn't seem to be the most affluent person going around. What happens when your "mate" is suddenly a bit short of cash and can't pay the rent … or worse? And your "hope" is to break even?

      As noted, if that's what you want to do, then hey, it's your money. But frankly, I think you're setting yourself up for a world of hurt.

      • 

        [Deactivated] on 09/02/2020 - 16:48

        Thank you.

        He is reliable and has a perfect rental history. He suffered a huge financial setback when he separated from his ex-wife but is back on his feet now.

        There is the other option of lending him some money in exchange for a share of the property. He can buy us out at a pre-agreed minimum price or market rate whichever is higher. We will need to get solicitors involved and draw a Co-ownership Agreement. Could work but I reckon that would be a messier option than buying the property outright and renting it to him.

        • 

          JET101101 on 10/02/2020 - 07:46

          +2

          @[Deactivated]: It would be worth running a worst case scenario test on the numbers. So f he was to leave within a few months due to losing his job, leaving the country or getting a new partner.

          Where would that leave you

        • 

          Hirolol on 10/02/2020 - 09:23

          +1

          @[Deactivated]: I hope your friend is ok now.
          Sounds like he’s a decent guy and it’s great that he has a good friend like you.

          • 

            [Deactivated] on 10/02/2020 - 09:24

            @Hirolol: He is. Thank you.

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  WTF on 09/02/2020 - 15:29

  +2

  The key is always location location location. OP make sure you get that part right before worrying about the rest.

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  [Deactivated] on 09/02/2020 - 15:47

  +1

  Yay - a floorplan critique 🙌

  Are 2-Bedroom Properties a Good Investment?

  Yes - I think so. Friends recently purchased a 2BR villa (torrens title/flat block/no common walls) as a long-term investment with a view to moving in themselves once they retire and want to downsize. 2 BRM properties (esp. houses) are much sought after in Syd in certain locations.

  The house actually feels surprisingly spacious and light-filled.

  The floorplan doesn't include dimensions, aside from the living & dining rooms, which may detract from it's actual size.

  I don't mind the floorplan aside from the window-less WC & Euro laundry, which you've also pointed out. However, it's better that the WC is separate considering it's the only one in the house. South-facing windows in the master is not ideal but better than west-facing 😉

  I already have a tenant/friend lined up.

  I'm assuming you've considered the pros and cons of this arrangement.

  Psychologically , I'm baulking at the thought of owing money to the bank again. was so looking forward to becoming mortgage-free :(

  Mortgage-free is the dream! As long as you've (or accountant/financial adviser) done the sums and it still makes financial sense due to your changed family & work circumstances and not just helping out your friend and his family.

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  sahh on 09/02/2020 - 15:50

  +2

  two bedrooms are okay if there is demand from downsizers and young families (1–2 young kids). Also could add a sky light above toilet to deal with the no window situation.

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  chumlee on 09/02/2020 - 16:33

  +1

  With coronavirus and chinese property buyers diminishing, property market could be in the last phase of its dead cat bounce

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    [Deactivated] on 09/02/2020 - 17:02

    +1

    The current owner has taken this into consideration. Hence the very attractive pricing - the property is about 20% less than what I would have expected. He also wants a quick sell as his business is doing quite well and his new girlfriend is more than happy to spend his money. She is is demanding an "Instagram-worthy nursery" for their unborn child.

  • 

    dcep on 09/02/2020 - 19:51

    heard that since 2000

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  Euphemistic on 10/02/2020 - 13:42

  +1

  An investment property is a decent investment if it matches the demand for the area, and the area has a reasonable number of rental properties without having excess stock. Location, location, location - which sounds good by your description.

  Ie if the local area is all 4 bedroom double garage homes, a 2 bedder is probably not the best investment. If the local area is all 2 bed apartments being a free standing 2br home with garage attached might be an advantage. Match the house to the demographic of the area. All well established families, 2br is not enough, young couples establishing a family might appreciate a smaller property to start out in, then move onto bigger when they need more space.

  A single garage might not work if there is no on street parking if the tenants can or access good public transport easily.

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    [Deactivated] on 10/02/2020 - 13:52

    +1

    I agree. I've been thinking it might be a risky investment and I've lined up a few 3-bedroom properties to see today.

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  willister on 14/02/2020 - 14:36

  That toilet and bathroom can be swapped to give the toilet a window! Damn I really hate windowless toilets or bathrooms. Lived in one once and damn, it was a 40sq McMansion but the design really made it third world.