asbestos cladding - a bad investement??

[daniel cunningh]

Hey all,

Just in the process of trying to acquire my 3rd IP. I've had cold feet for ages about whether i should keep going down this path but i figure if overall they are cashflow neutral roughly then its hard to lose.

My question is this: I have a budget of 300K. The area in which i'm looking has 3 bedroom brick houses for about 280k (run down need new floor coverings, paint job, kitchen etc) but for a decent brick house in good nick and not requiring much work they are roughly 320-330K.

I've inspected a 3 bedroom asbestos clad house which i can pick up for 270k. The owner wants to rent back for $400.00/week and it has the potential to convert an area to a fourth bedroom. It is in good condition requiring no work.

My questions are

1/ am i better off spending more and getting brick?

2/ will the asbestos reduce potential for resale

3/ how much is it roughly to remove and reclad in weatherboard? is this even feasible?

Any help would be much appreciated!

Dan

 

[RightValue]

Get a quote for the removal of the asbestos form a removal company. It will probably be well under $10k.

Get a quote from a chipy for the cost to reclad the house in weatherboards.

I would also get a quote from a brickie rfor recladding in brick, this will cost a lot more due to foundations being poured but you may feel it is worth it.

Maybe help everyone by measuring the property first.

Then you will have your answer.

Wait untul the tenant moves out to do the work.

It will probably be worth it, but I would negotiate hard as others may be put off as well.

Frankly I would say to the owner $10 or $15kk less in price but the rent is $100pw less for the 2 year lease they need to sign. $10.000 today is worth more than $10,400 spread in over 2 years with risk they may not pay.