My property journey – Mackay Strata Titling

The Returns

The valuation came in at $560,000, smack bang in the middle of the forecast.  Previous valuation was at $450,000, so I know have $135,000 of equity in the properties ( loan is currently at $425,000)

The refinance options have been looked at and we are able to secure a 90% LVR loan.  Net result is that I am able to take around $80k to make further investments.

The costs

The costs of the strata titling was in the $15k mark.  It was upped significantly by the need for a firewall which threw in an additional $10k.

Ongoing costs are:

• additional fees for body corporate insurance – approx $1000 p.a.
• Additional rates – approx $1000 p.a
• Additional admin costs for body corporate – approx $500 p.a.

So, you need to make sure you invest the released equity well to leverage the funds effectively

About Mark Taylor….

My property journey – Mackay Strata Titling

My property journey – Mackay Strata Titling

Mackay

It is celebration time as we have received from the council the sealed approval, so we are back on track to finalising the strata titling.  One of the new rules is that we have to get valuations on the duplex, so a good opportunity to see what we have created:

Project Valuation

I believe fair market value for this property as a duplex would be between $475,000- $485,000.

If the units were strata titled the market value would be in the $$530,000   to $590,000 range.

So in the $55k to $100k range of additional capital created through this work.  Overall costs will be in the $15k to $20k range so a return of 300% to 500%.

I keep learning as I go on this journey.  There are some additional costs now that I am running a corporate body, which needs a sinking fund contribution and a separate tax return as it is run as a separate business.

Meanwhile when this is finished, in the best case scenario we have reduced the LVR to around 70%.  My understanding is that I may be able to refinance up to 80% which would allow me to extract $50k, which would be enough to go again on another US property or 2 so I will be exploring this option….

About Mark Taylor….

My property journey – Mackay Strata Titling