[THE VAULT] GRAFFITI COVERED DERELICT HOUSE RENOVATED INTO A POSITIVE INVESTMENT
This derelict house from the Vault is one which very few renovators would delight in and is a ripe example of how having the right mindset and doing the sums will allow you to say yes to the best deals.
CHECK OUT THE “BEFORE” AND “AFTER”
Looking at this neat and tidy property now, anyone would think it’s a good investment. Before it was renovated? Well, that’s a different story…
NO-ONE WOULD EVEN GO NEAR THIS DERELICT HOUSE
According to Nathan, this derelict house was a “piece of shit.” It was covered in graffiti and some of its walls had even been kicked in. Many of our clients looked at this place and saw a dump, choosing not to purchase it in preference for something prettier.
SOMEONE SAW ITS POTENTIAL
Then one of our clients saw beyond its outward appearance and realised the numbers added up to their benefit. They purchased this property for $165,000, spent $30,000 on renovations and rented it out for around $340 a week.
CHA-CHING! BUYERS CASHED IN
Today, this place is worth $500,000. Its owners are aiming to build a granny flat in the near future, bringing its value up to around $650,000. They will be able to get around $580 a week all up in rent once complete.
THE IMPORTANCE OF ACTING AT THE RIGHT TIME
When you make the right decisions in the accumulation phase, you will be able to do things like sub-divide or add granny flats while consolidating your portfolio. It is important not to do such things too early – if you had one property and spent $100,000 adding a granny flat, you would be worse off than if you had used that $100,000 as a deposit on two more properties. The client who purchased this property saw its potential from day one, when very few people thought it was worth buying. They waited until the time was right to follow through and build a granny flat in order to boost the property’s cash flow.
Have you ever purchased a property that was in a terrible condition, such as this one from the Vault? Please share your experiences in the comments section below.