How would you go about buying this?

There's a unit I'm veiwing on Sunday that I'm a little unsure of how to go about negotiating to buy.

The history of this unit:

It is a 2/1/1 16 kms from Sdney CBD, internal area 115m2, balcony 19m2. Went to auction in November and was passed it in the high $200's, tenant then signed a new 12 month lease at $2000/month. The unit is semi-furnished and the tenant sub-lets a room, and would be happy to continue on the lease and sign again once it is finished (discussed this with current PM). The rent is high for the area.

The unit is now marketed at nearly $350K (a big jump from the auction), is above median and most comparable sales for the area and for the building.

At $340K the property becomes neutral cf after tax and depreciation at 7% interest.

Any thoughts on this property in terms of offers, negotiating, is it risky as the rent is above market (more standard rent would be ~$400 - $420 wk)

Thanks :)
 
i would take into account market rent - but the bank may just look at the existing tenancy agreement.

semi furnished adds rental value - if you're worried, fit it out completely from IKEA and keep your $2k a month.

i would buy with finance APPROVED and a flexible settlement to secure your price.
 
Seems to me tenant doesn't mind paying above-market rent (~$461/wk (2000*12/52)) as they are proabably subletting the room for more then $60 and therefore consider themselves to be paying below-market rent
 
yep, going in with pre-approval up to 90% + LMI of $400K purchase, just pending valuation which will get done during cooling off if it gets to this.

Wasn't really thinking of furnishing it totally (maybe after this tenant leaves though???). Was thinking of offering flexible terms if i get my price.

I will be asking the tenant how much he sublets for if he is there on Sunday, which I assume he will be. I guess he sublets closer to $150 - $200/wk.

Will see on the w/e I guess.
 
If the property is similar to others in the area then I would base the offer on the market return not the actual return. Not everyone sublets, when the current tenant moves out it is likely that the unit will only give you the average return for the area.
 
Well I pulled out the monopoly money when I saw the property on Sunday and the agent wasn't all that impressed ........

Will see how see we go with offering real money. Waiting to hear back from the agent today.
 
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