Did you sell your regional cheapies?

[beachgurl]

I have a few exDOH cheapies in large regional towns in Nsw. All are currently yielding 10pc of the purchase price. But I'm wondering if its time to let them go. 1 of the 3 properties is going fine, long term tenant paying his bills, another had a tenant recently leave with big arrears and I expect the third will become vacant soon as the tenant believes the place is haunted. While each is positively geared, providing the hot water or a heater doesn't blow up, I'm wondering if I could put my energies to better use ie development or just not sweating the small stuff for only 2-3k return each year.

Dunno if its the end of year blues or if the average investor sells off their first couple of cheapies down the track and I've hit that point? Has anyone else sold off their cheapies once their portfolio increased and/or included better properties in the mix?

 

[HappyCamper]

Do the reasons for originally buying that property still hold true today?

I'm at a similar point and have decided to offload one of my cheapies. I bought it with a long term view that it may one day be rezoned to a higher density. Unfortunately, I just missed out on rezoning by a few houses and the revised flood zones after the Brisbane floods have made my block flood prone now Time to cut my losses and put the funds to better use elsewhere.

 

[coastal]

if they have served their purpose and you have moved onto bigger and better things, yeah why not.

 

[skater]

We've got some cheapies too, but no real issues with them. They have had little growth, but have nice high rents.

I've thought about getting rid of them, but what would be the point? Sell and get a tiny CG, but lose the income? Or hold, because the income keeps slowly creeping up while the mortgage stays the same?

We're selling off some, but they are in Western Sydney. They have had a nice chunk of growth. The funds are being re-invested into some newer, nicer properties, outside of Sydney.

The regionals, at this stage, are staying. Maybe, as Sydney cools down, growth will happen further afield, then it might be time to offload. I'm not sure what the future is with these ones, but until I do know, they can just tick away in the background, doing what they do.

 

[ChrisA1]

I see it as a balance between what can you best do with the money for the quickest return vs the risk and aggravation vs the serviceability of the choices. If you can see the regionals going somewhere in the near future, then hold, but the aggravation is 'will it be difficult to get new tenants if required'??

The other side is the development - is this the best choice for the money? Are you ready for this and is the market ready for the development? and what's the likely turnaround for your profit? Also the serviceability - since these funds would be locked into something that isn't bringing you immediate income (not sure if that needs to be a consideration for you?).

Other posts talk about if the purpose of the regional IPs have done their job and this is something I think about.
I'm selling an IP. Unfortunately the market is dead where it's located and everyone thinks that's the reason, but I can better use the funds in another market. People ask why I don't just refinance but when the IP has done it's job, it's time to move on. (I should have sold years ago but that's another matter.... )

That's my thinking process....

 

[see_change]

We bought a block of units in 2003 . 220 k , rent around 440 , so nice 10% return .

11 years later the rent has gradually crept up bit by bit to around 850 .

Wish I had a few more of those . At the moment it pays for the short fall in some of our nicely positioned properties . At some stage we'll sell something and pay off what's owing and the rent will keep gradually creeping up .

Thank you GOANNA !!!

Cliff

 

[tj22]

Do the reasons for originally buying that property still hold true today?

I'm at a similar point and have decided to offload one of my cheapies. I bought it with a long term view that it may one day be rezoned to a higher density. Unfortunately, I just missed out on rezoning by a few houses and the revised flood zones after the Brisbane floods have made my block flood prone now Time to cut my losses and put the funds to better use elsewhere.

how do you know if your house is zoned "flood prone" ?

i'm about to buy a house in ipswich and in the suburb certain houses have flooded and others haven't i looked on the online flood map which looked heaps dodgey and it said mine didn't flood. but to be honest i'm not that confident with it.

thoughts?

 

[skater]

We bought a block of units in 2003 . 220 k , rent around 440 , so nice 10% return .

11 years later the rent has gradually crept up bit by bit to around 850 .

Wish I had a few more of those . At the moment it pays for the short fall in some of our nicely positioned properties . At some stage we'll sell something and pay off what's owing and the rent will keep gradually creeping up .

Thank you GOANNA !!!

Cliff

That's a nice return. Where's that at?

We've got a house, purchase price was around $90k, rents for $235pw, and another purchase price was $67k that rents for $210pw.

The first one is in our Trust & we were forced into paying P&I at the time and at one stage when we refinanced something, there wasn't enough in the individual properties to make it worthwhile, so we crossed it with the Letho one we just sold. No point in trying to separate, we'll just pay out the whole loan on that. It will leave it with a mortgage of $47k, so it's very cashflow positive and we're making enough on Letho for this not to impinge on anything else.

Several other properties have some decent equity to pull out, instead of playing around the edges with these ones.

 

[jingo]

We bought a block of units in 2003 . 220 k , rent around 440 , so nice 10% return .



Thank you GOANNA !!!

Cliff

I miss Goanna and her posts. She is an amazing investor. Are those properties you bought in Tasmania?

 

[HappyCamper]

how do you know if your house is zoned "flood prone" ?

i'm about to buy a house in ipswich and in the suburb certain houses have flooded and others haven't i looked on the online flood map which looked heaps dodgey and it said mine didn't flood. but to be honest i'm not that confident with it.

thoughts?

The flood maps are the go, but also the contract for the house should have a yes/no question about whether it's in a flood zone.

 

[see_change]

I miss Goanna and her posts. She is an amazing investor. Are those properties you bought in Tasmania?

This is our four pac in New Town . Think it was Goanna who put us on it ( though it might have been ruby ) . They worked together at times and bought a street in Launsceston ?

Had a dysfunctional owner who didn't like any tenants that their PM put forward to them , as a result 3 were vacant . Goanna was using the same pm and they were complaining to her about the owner ? Goanna was fully committed and couldn't buy it so mentioned it to me in the chat room . We bought it on the condition we could approve tenants prior to settlement and it was fully tenanted when we settled.

Couple of quirks though . We didn't find out it was part of a larger strata until three days prior to settlement ? hobart lawyers ?. and about five years after buying it , the local council notified us that it was no longer going to be subject reclamation ( ? ) of the land for road widening ? WTF !!!! Hobart lawyers ?.grrr . needless to say if we ever buy in Hobart we will use a different lawyer , and if they had reclaimed land we would have been suing someone ? but then again we might have had to use a hobart lawyer ...


Goanna's ( Anita ) still around . We see what's she's up to on Facebook and say hello every so often .

cliff

 

[MTR]

I have a few exDOH cheapies in large regional towns in Nsw. All are currently yielding 10pc of the purchase price. But I'm wondering if its time to let them go. 1 of the 3 properties is going fine, long term tenant paying his bills, another had a tenant recently leave with big arrears and I expect the third will become vacant soon as the tenant believes the place is haunted. While each is positively geared, providing the hot water or a heater doesn't blow up, I'm wondering if I could put my energies to better use ie development or just not sweating the small stuff for only 2-3k return each year.

Dunno if its the end of year blues or if the average investor sells off their first couple of cheapies down the track and I've hit that point? Has anyone else sold off their cheapies once their portfolio increased and/or included better properties in the mix?

I think its dependent on a number of factors

What are you making net on this, not gross?? If there is not much in it I would be pulling the pin because they will only end up costing you more in maintenance down the track. Lots of pain for little gain.

Growth, what's happening in the area?? can you capture growth somewhere else in the Syd market or wherever? can you utilise this money to make more money

 

[TMNT]

how regional are we talking?

 

[see_change]

how regional are we talking?

Isn't that anything out of Sydney and Melbourne ? .........

Cliff

 

[beachgurl]

how regional are we talking?

Orange and Wagga

 

[TMNT]

Orange and Wagga

Ok got it

Thought you guys were talking about ones with population <2000 type places

 

[Heinz57]

how do you know if your house is zoned "flood prone" ?

i'm about to buy a house in ipswich and in the suburb certain houses have flooded and others haven't i looked on the online flood map which looked heaps dodgey and it said mine didn't flood. but to be honest i'm not that confident with it.

thoughts?

The flood maps are the go, but also the contract for the house should have a yes/no question about whether it's in a flood zone.

Ipswich city council are excellent to deal with. Personally I trust the website but ring them up if you have any concerns.