Two recent North Avoca house sales provide an interesting comparison for would be renovators/rebuilders.
10 The Arena just sold for $1,250,000. This small cladded dwelling is a 3brm 1bth 0gar house on a 715m2 block. This house has ocean views and is about 300m from the beach.
61 Tramway Road just sold for $2,050,000. This large brick dwelling is a 6brm 5bth 4 gar house on a 599m2 block. This house also has ocean views and is about 300m from the beach.
Would you do a knock down rebuild on 10 The Arena? The block has a steep slope and could very well be in bushfire zone as it back on to bush. Would the construction cost $800,000 for a 6brm, 5bth, 4 gar dwelling?
If these dwellings were used for rental purposes, a 5% gross yield would require 10 The Arena to achieve $62,500 p.a. (an average of $1,200 per week) and 61 Tramway to gross $102,500 p.a. (an average of $1,971 per week). Which do you think is more likely.
Please feel free to give me a call or shoot me an email if you have a similar scenario to work through. Finance should be the first step. There is no point in contemplating any of these questions if you don’t have access to funding. Michael Daniels firstname.lastname@example.org u.