Another PPOR to IP question

Hi All

Been reading the forum every morning for the past 2 years, It's like an adiction. Now I have a delimma which need your inputs.

We want to move close to work so that the travelling time is less and we want to convert our current PPOR to an IP and buy another house closer to work to live in.

My current PPOR has been recently renovated with porcelain tiles in the kitchen, hallway, dinning room, family room, lounge room and the normal wet areas such as laundry, bathrooms and toilets.
Picture is attached:
Many relatives and neighbours said that we are mad to rent out our beautiful home, we should sell instead because the tennants will destroy our house.

We did not want to sell as the land has potential for future subdivide and build another house at the back.

I have a couple of IPs but they are not as nice as our PPOR and have not experienced (yet) any tennant damaging our IPs.
My main concern is the tennants may damage the tiles.

Have anyone experience tennants damaging tiles in their IPs?
I will have Land lord and content insurance.

Thanks in advance for your inputs
Regards
BaoT
 

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Many relatives and neighbours said that we are mad to rent out our beautiful home, we should sell instead because the tennants will destroy our house.

We did not want to sell as the land has potential for future subdivide and build another house at the back.


Baot

I can't comment on whether tenants will damage your tiles or not, since we haven't leased a PPOR to tenants.

However, I would like to make a comment on the part of your post quoted above. Nineteen years ago we built our 'dream home' - exactly what we wanted on 1800 sq metres, and I put years of hard work into creating an absolutely stunning garden - we just loved that house!!! Seven years later, we moved interstate - and decided to sell because we thought tenants would destroy our house. So we sold when the market was in the doldrums - for $255K.

We were pleased to sell to people who raved over how lovely our beautiful home was and who told us how much they loved that house .... or so we thought.

Funnily enough, the purchasers have totally neglected the garden - and the house, according to neighbours, is very run-down inside too. So much for my fear that tenants would destroy the house!!!

Not a day passes when we don't kick ourselves for selling - even if the tenants had 'destroyed' it, we could have renovated or repaired it. The mistake we made was to continue to think that it was 'our beautiful home'. It wasn't - it was simply a piece of real estate. A lovely money-earning, capital-gains-accumulating ticket to financial freedom - which today is worth well over $850K.

So before you listen to well-meaning friends or neighbours or relatives, sit down and think long and hard about selling. You mentioned the potential for future subdivision - don't forget that you are not only selling a home but you are selling your future plans, too! And, remember, if tenants do damage the house - it can be fixed.

It may well be that it is in your best interests to sell the house - that is for YOU to decide. Do your research, talk to people who are property-savvy and make your own decisions.

Cheers
LynnH
 
Many relatives and neighbours said that we are mad to rent out our beautiful home, we should sell instead because the tennants will destroy our house.
Yep, don't invest because tenants will wreck your house. These well meaning relos and neighbours are not investors are they? ....so pray tell - Why are you listening to them????

We did not want to sell as the land has potential for future subdivide and build another house at the back.
All the more reason to keep it my dear!


I have a couple of IPs but they are not as nice as our PPOR and have not experienced (yet) any tennant damaging our IPs.
My main concern is the tennants may damage the tiles.
So you are all emotionally attached to your tiles - can I make a suggestion - the "tiles" are not the asset going up in value. The "tiles" are actually depreciating! AND you know what? ....in a couple of years the "tiles" , even as nice as they are now, may actually be looked upon the same way as mission brown paint and orange benchtops are today.

I will have Land lord and content insurance.
OK - so all covered in the event of damage then? No issues to discuss here. The reason landlord insurance is so cheap is that as a % probability event, tenant damage RARELY happens.

Have anyone experience tennants damaging tiles in their IPs?
Nope. But in some respects I hope (don't take this the wrong way) that the tenants DO damage the "tiles" and you make a claim that gets paid and the IP STILL goes up in value despite the damage to your precious tiles. You really have to learn to detach emotionally and see it as an IP.

BaoT, if I was there, I'd slap you on the back of the head. Keep investing, stop listening to the relatives and neighbours who will retire broke. Good on you for reading here everyday - it is a bit addictive as you say. I was a bit concerned about the forum space given to the Doom & Gloomers for a while - they must be really pi*@ed that Melbourne and Brissy have done so well (in areas) in the last little while.

All the best,

Aimy
 
Hi Boat,

Completely agree with all the above and after all they are only tiles.

One thing I will mention is, make sure the tiles are correctly sealed. Porcelain is very porous and if the tenant's happen to spill a glass of red mine on your beautiful tiles and leave it overnight there is virtually no way to remove the stain. If you haven't sealed them already any tile shop will stock the sealer. Really easy to apply and a must!

Good luck
 
I hope I never get that emotionally attached to my house.

Seriously. Make the money, and you can afford anything. This might be the start of a multi-million dollar portfolio. After you make the money, tile your house in whatever you want.
Alex
 
Yup, wiser not to get emotionally attached to something as impermanent as a house.

The idea of investing in property is to preserve the buying power of the dollars you earn today.

Another slant....a client of mine built their dream home in Pullenvale in Brisbane's elite west....a substantial home with a lot of inspired architectural features.....they were transferred to Singapore for a few years, and like you couldn't bear the thought of renting it out, so they sold it.....3 years later, they come back to Brisbane....look around for 6 mths for a nice home, buy one....realize it is a heavy compromise.....wife convinces hubby to make an offer for their previous home.....after some negotiating, the owners agree to sell.......the cost of all this was over $600k (REA fees, stamp duty, growth missed by being out of the market, and having to pay a premium to the owner to sell back to them)

replacing your tiles if damaged would be a lot cheaper.......
 
I say lets look past some tiles that, if they get damages, you can replace again...and lets weigh that up against the possible profit of a future subdivision...this is a no brainer IMO...
 
Agree with all the comments about keeping a dev site =$$$ - forget about trs (tile related stress). For what it is worth I have just moved into a 4 yr old rental house with mostly tiles. Love the low maintenance, young kids messy mealtime etc. Have dropped a pot or two in the kitchen and no chips or cracks from us so I have no idea how you could get a better rental floor surface! I wouldnt do it through a whole house for ppor as it is a little noisy, echoey but seems bullet proof to me so I reckon dont worry.
 
First,
never listen to friends and relatives about property investing, unless they are twice as wealthy as you from real estate.

Second,
Don't worry about tenant damage. Just have good Landlord's Insurance, and screen the tenants carefully. Chances are that if you have a really nice house the rent will be more expensive, eliminating much of the Gerry Springer element.

I am on my 4th PPoR at the moment, and have a block of land waiting for the 5th to go on it. They are just houses and you can always buy another nice one.

The current PPoR is a very nice modern home with views, and has been tenanted since we left Aus in Sept '05. We have Landlord's Insurance, so I don't really care too much about the damage.

To me; it's just another IP now, and as long as the return is good from cap gains, rent return, depreciation etc, then I still like it.

We may move back in when we return to Aus, but we're not planning to, but if we did it would be just a bit of paint, maybe some new carpet and away we go again.
 
First,
never listen to friends and relatives about property investing, unless they are twice as wealthy as you from real estate.

Second,
Don't worry about tenant damage. Just have good Landlord's Insurance, and screen the tenants carefully. Chances are that if you have a really nice house the rent will be more expensive, eliminating much of the Gerry Springer element.

I am on my 4th PPoR at the moment, and have a block of land waiting for the 5th to go on it. They are just houses and you can always buy another nice one.

The current PPoR is a very nice modern home with views, and has been tenanted since we left Aus in Sept '05. We have Landlord's Insurance, so I don't really care too much about the damage.

To me; it's just another IP now, and as long as the return is good from cap gains, rent return, depreciation etc, then I still like it.

We may move back in when we return to Aus, but we're not planning to, but if we did it would be just a bit of paint, maybe some new carpet and away we go again.

What he said :D
 
Good Morning All;

Thankyou all, for your comments, your comments has strengthened my decision not to sell and convert it into an IP. Your comments has also removed to emotions that I have attached with a nice house.
Like you said, it's just a piece of realestate.

The initial emotion was that because nearly all the floors in the house was tiled, so it would cost a bit to replace if damaged.
But it can be replaced. The cost of rtiles replacement will be insignificant compare to the future capital growth.

Aimjoy, Thanks for the slap on the back of the head :D, I'm awake now.
LAAussie, love your posts, thanks for the advices
Lynnh, thanks for your story.
Thankyou all once again.


Regards
BaoT
 
Baot

I can't comment on whether tenants will damage your tiles or not, since we haven't leased a PPOR to tenants.

However, I would like to make a comment on the part of your post quoted above. Nineteen years ago we built our 'dream home' - exactly what we wanted on 1800 sq metres, and I put years of hard work into creating an absolutely stunning garden - we just loved that house!!! Seven years later, we moved interstate - and decided to sell because we thought tenants would destroy our house. So we sold when the market was in the doldrums - for $255K.

We were pleased to sell to people who raved over how lovely our beautiful home was and who told us how much they loved that house .... or so we thought.

Funnily enough, the purchasers have totally neglected the garden - and the house, according to neighbours, is very run-down inside too. So much for my fear that tenants would destroy the house!!!

Not a day passes when we don't kick ourselves for selling - even if the tenants had 'destroyed' it, we could have renovated or repaired it. The mistake we made was to continue to think that it was 'our beautiful home'. It wasn't - it was simply a piece of real estate. A lovely money-earning, capital-gains-accumulating ticket to financial freedom - which today is worth well over $850K.

So before you listen to well-meaning friends or neighbours or relatives, sit down and think long and hard about selling. You mentioned the potential for future subdivision - don't forget that you are not only selling a home but you are selling your future plans, too! And, remember, if tenants do damage the house - it can be fixed.

It may well be that it is in your best interests to sell the house - that is for YOU to decide. Do your research, talk to people who are property-savvy and make your own decisions.

Cheers
LynnH

Lynn
That is EXACTLY what a well meaning friend/neighbour sais about our ex-PPOR in Sydney, in a very good location , close to shops,excellent schools,etc. He said sell, as you don't want tenants destroying the house. I am holding on, and I know I will not regret doing so. Advice from well meaning people is sometimes the worst thing,isn't it?
 
Thanks Momo for your comment.

Hi Slingshot, how do you seal porcelain tile? do you just apply the sealer to the grout with a brush? Can you advise on the sealer?

Thanks

BaoT
 
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