Frankston North Vs West Sydney's Cheapies

[Mindmaster]

Lately Frankston North has been hopeless for investment where as Shalvey, Letheridge Park, Tregear etc have been doing well. I have an IP in FN that I am REAALLLYYYY tempted to get rid of an a place in Shalvey that is doing great.

This thread started by Investor2009 is about similar issues http://somersoft.com/forums/showthread.php?t=86655

Here are the numbers
FN
Bought Dec 2009 (the worst time, a bad mistake)
On Monterey Blvd
$268 000 purchase cost
$275 current value
$270 last rent, currently vacant for 6 weeks, rent $260 and no takers
$2500 repairs about to do on it

Shalvey
Bought Dec 2012
On Koomooloo Ave
$245 000 purchase cost
$255-265 000??? heard prices have gone up by upto $20k since then
$300 rent and tenants easy to find
PLUS have a GF almost ready that will boost yield to over 8%

Can any one give me ONE good reason why I should not get rid of this FN IP and put that money to better use else were? ie another Shalvey IP or under my mattress

 

[Brady]

Lately Frankston North has been hopeless for investment where as Shalvey, Letheridge Park, Tregear etc have been doing well. I have an IP in FN that I am REAALLLYYYY tempted to get rid of an a place in Shalvey that is doing great.

This thread started by Investor2009 is about similar issues http://somersoft.com/forums/showthread.php?t=86655

Here are the numbers
FN
Bought Dec 2009 (the worst time, a bad mistake)
On Monterey Blvd
$268 000 purchase cost
$275 current value
$270 last rent, currently vacant for 6 weeks, rent $260 and no takers
$2500 repairs about to do on it

Shalvey
Bought Dec 2012
On Koomooloo Ave
$245 000 purchase cost
$255-265 000??? heard prices have gone up by upto $20k since then
$300 rent and tenants easy to find
PLUS have a GF almost ready that will boost yield to over 8%

Can any one give me ONE good reason why I should not get rid of this FN IP and put that money to better use else were? ie another Shalvey IP or under my mattress

Have done a full cost analysis?

Taking into account the selling costs and purchasing costs to exist and enter the market.

Look at why you purchased in Frankston North in the first place, do you still think it has those drivers/growth potential.

Why is your property still vacant after 6weeks if dropped the price? What is wrong with the property? Has your agent told you what’s wrong, is this normal?

You said its gone up $7k in the 4 years, some places in Melbourne has gone down... do you think there is still growth in FN.

Can you afford to get into a different market and keep FN

 

[Mindmaster]

Have done a full cost analysis?

Taking into account the selling costs and purchasing costs to exist and enter the market.

Look at why you purchased in Frankston North in the first place, do you still think it has those drivers/growth potential.

Why is your property still vacant after 6weeks if dropped the price? What is wrong with the property? Has your agent told you what’s wrong, is this normal?

You said its gone up $7k in the 4 years, some places in Melbourne has gone down... do you think there is still growth in FN.

Can you afford to get into a different market and keep FN

Hi Brady, all good questions.

My reasons for purchasing in FN back then were wrong as it was a mistake. Wrong timing, wrong ideas.

Not sure why it is still vacant. The PM has been good so far so I'm assuming they are not the problem. Probably low demand and fierce competition for tenants. The place is also old.

Most of that 7k was from buying below market value. I used a BA and they were reasonably good.

If I sell now and factor in sales comission, I'll be behind by around4-5k which is bearable as a learning experience. My concern is the larger opportunity cost of leaving money there where it is not working hard.

May need to wait till it is tenanted so any decision made is not emotional such me being pissed off

 

[Brady]

Hi Brady, all good questions.

My reasons for purchasing in FN back then were wrong as it was a mistake. Wrong timing, wrong ideas.

Not sure why it is still vacant. The PM has been good so far so I'm assuming they are not the problem. Probably low demand and fierce competition for tenants. The place is also old.

Most of that 7k was from buying below market value. I used a BA and they were reasonably good.

If I sell now and factor in sales comission, I'll be behind by around4-5k which is bearable as a learning experience. My concern is the larger opportunity cost of leaving money there where it is not working hard.

May need to wait till it is tenanted so any decision made is not emotional such me being pissed off

Vacancy rate have jumped from around 1% up to 2.5%, but that not really high

http://www.sqmresearch.com.au/graph_vacancy.php?postcode=Frankston+north&t=1

2 weeks isn't too long in a weaker market.

Have you had people at opens? Has there been an open?

Ask for feedback from your agent, could provide you some understanding of why it's not tenanted.

Best of luck

 

[one world]

The PM has been good so far so I'm assuming they are not the problem. )

Plenty of people complain about bad PMs in Frankston. I suspect your agent is not up to scratch.

I used a BA and they were reasonably good.

There you go again......trusting agents is never a good idea. Once the sale is done, they will abandon you.

Remember, if your block is more than 600sqm then its subdivisible. Maybe you have no plans to develop. But potential developer-buyers might.

If your block is less than 600sqm, then your buyers agent scammed you into paying too much! Nothing reasonable or good about that.

Don't be gullible. Stop listening to agents. They will tell you to buy at the top and sell at the bottom. After all, no matter what, they get paid.

Just curious, are those houses in NSW on dual occ blocks?

 

[santaslayer]

If I sell now and factor in sales comission, I'll be behind by around4-5k which is bearable as a learning experience. My concern is the larger opportunity cost of leaving money there where it is not working hard.

You probably also have to factor in the BA fee in your loss.

2.5% isn't too bad in terms of the vacancy rate. this should still indicate there are more renters then stock/supply available. Maybe time to change PMs?