I'm selling my house!!



From: Paul Guest

Inspired by the strength of the market, my wife and I have decided to sell and attempt larger developments than this particular one.

What I cannot do is budge my wife from this new property in Mitcham (best street in suburb!) so we wish to sell on a 3 year lease-back (i.e. We'll rent it back for 3 years). No agents fees (direct debit our account each month), no vacancies, no re-letting fees, no advertising, no maintenance for first 3 years (we figured that we would have to cover that if we were living here anyway). Plenty of depreciation ($42K, maybe more) and building w/off ($115K). We'll offer a 5% rent increase in the 3rd year.

Price is $360K (larger house next door valued at $500K, auction in the street 3 months ago at $468K (market has risen since).

House is 15sq on 370m2 block. 3 beds, ensuite, + dble gge, picket fence, fireplace etc.etc. Only 2 on the block, both have a 50ft frontage to elm-lined street.

Yields in our area on new stock are around 4.5%. Our return is 4.75% but without vacancy, fees, maintenance etc. for 3 years, our offer grosses up to about 5.5% when those assumptions are factored in.

Sorry for the 'spam' guys but try explaining yield, depreciation and the like to an estate agent.. they just dont get it!

Please email pgaust@hotmail.com



PS. I am happy to provide any property development advice to newcomers (risk/reward, ROI, funding, target markets etc.)
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Reply: 2
From: GoAnna !


Can I ask how you came up with the valuation of $360K? And the rental rate.

GoAnna !
Why not go out on a limb, that's where all the fruit is. (Mark Twain)
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Reply: 2.1
From: Paul Guest


The valuation will be fine at $360K. I am very familiar with all the agents and recent sales in the area. I have taken inspections from 3 or 4 agents in the area and have sold 3 properties in neighbouring suburbs in the last 7 days.

To the previous enquirer, Mitcham, Victoria (Melbourne suburb).

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Reply: 3
From: Michael Yardney

Mitcham is an outer eastern suburb, in act quite far out.
What capital growth do you expect to get there?
Michael Yardney
Metropole Properties
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Reply: 3.1
From: Paul Guest

Thanks Michael,

As the crow flies it is about 20k's out from the CBD. The Eastern freeway extension is a 5 minute drive and then an 11min trip to Hoddle St. Mitcham had experienced a surge since the completion of the freeway as have other suburbs within reach of it.

This particular street is very tightly held, with 60yo pin-oak trees. the Council have just completed a re-construction of the street to preserve the trees and enhance the area with old bluestone-lined gutters and driveways - the only street in the suburb to attract Council funds for this purpose.

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