Help Turning a Property Around



From: Greg Pennefather


This is my first post but I have been
following some of the great threads for a
little while now.

I'm hoping I can get a few pointers in
turning a negatively geared property

I have a town house in Fremantle WA,
and it rents for $180/week. The mortgage
is $162k (interest only) and with land tax,
management fees, strata fees (only
$94/quarter, not too bad) etc it is costing
me about $400/month to hold on to it.

The location is good and I thought the
price I paid 18 months ago was
reasonable. So I would like to hold on but
I need to turn the property +ve or just get
out for a modest capital gain.

Any tips gratefully accepted.


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Reply: 1
From: Michael G

H Greg,

I'm from Sydney, so I wouldnt have a clue about your market, but here are two ideas;

1) Would a "furnished" apartment attract more rent?, this you have to see yourself. You could buy the furniture "interest free" from Hardley Normal or something and factor the repayments into their rent, plus boosting your cashflow.

2) Have a look in the shared accomodation section of your paper. What do people charge here? Maybe renting a house costs $180, but renting a room is $100. For 2 rooms this could make it $200 per week. Does your local newspaper have a large shared accomodation section that indicates there is a demand for such things?, maybe combine this with idea #1 to boost the return again?.

In New Zealand they sublet rooms. You could have a master lease over the house and a sublease for each room. That way you don't have to rewrite the whole lease.

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