Wednesday, May 4, 2011

Paying too much in Woodvale again.

17 Grey Smith Gardens
 First Sold 21-08-2008 for $647,000
Approx $80K Spent Renovating &
then Flipped to a Greater Fool
Resold 21-06-2010 for $855,000 
{What were these buyers thinking?}

Oh thats right it is not important what you pay because property always goes up in value? (Yeah Right)

Well #16 next door is now for sale @ $699,000after having failed to sell at their asking of $835,000 when it first listed in Oct 2010
(Remember that Just 4 months after these fools @ #17 paid $855,000)

So #16 has been slowly coming down in price & yet at $699,000 it is attracting no buyers? despite 6 long months & now being discounted by $136,000!!
So what do I think #16 is worth in todays market?
Well I would not pay more than $625,000!! 
Why $625K
You see another house @ #15 Grey-Smith sold for $398,000 in 2003 & assuming houses double every 10 years 
(BTW I don't subscribe to that Crap!!) 
#15 would be worth only $636K today 
& this is what the owners of #17 should have also paid not $855k
But what about the $80K renovations you ask? This would warrant a premium?
No because all houses have a renovating factor already built into the costs of property always doubling every 10 years. 
People forget the remodelling / extensions/ pool / landscaping that is done to all houses & these costs are already in all houses that go up, you should not add renovation cost again that would be double counting. 

Think it through the penny will drop!

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