Onselling an 'off the plan property

[WebBoard]

From: Mojo Jojo


Just hoping someone can set me straight.

I have a townhouse that I purchased in March 2001 off the plan as an IP. It is to settle in the next 3 or 4 weeks, I am yet to be notified of the settlement date. I did put "and/or nominees" on the contract. I am currently looking at buying a property that I will live in. To get finance, the bank has said that I will have to sell the IP as well as my current house. I have had trouble getting a bank just to agree to this.

My question is, is there any advantage of selling the IP before it settles? Should I just settle it and then sell it?

thanks

 

[lawsjs]

Reply: 1
From: Jeremy Laws


Flog it while you can, if you can.

 

[WebBoard]

Reply: 1.1
From: A Jones


Could this be the start of many posts on whether to flog OTP purchases and other recently purchased property investments?

 

[Waverlybay]

Reply: 1.1.1
From: Waverly Bay


The attached article pretty much sums up the risks involved with otp.

http://afr.com/financialservices/2002/06/12/FFXLH15OA2D.html

cheers

Waverly

 

[y_c]

Reply: 1.1.1.1
From: Wy Cee


hey people bring on the Great OTP warehouse sale, the more the merrier!!!

 

[WebBoard]

Reply: 1.1.1.1.1
From: Mojo Jojo


Thanks for you replies guys but I think you missed the point. I don't have to "flog" the property, I have to sell it so that I can purchase a house to live in, well a warehouse actually. Hence my problem with getting the finance.

I'm actually very disappointed that I have to sell since its as close to positive as I'm likely to find in an inner city property. Its a 2 storey townhouse about 4Kms out of Melbourne.

 

[khurram]

Reply: 2
From: Khurram Saeed


You can sell it off the plan ofcourse...but you havent left enough time (3-4 weeks) to onsell it before settlement.

It usually take 6-8 weeks to finally sell a decent place, and that is if you push the agents to the limit.

So no matter what happens, you will have to settle, unless you can sell it within 3-4 weeks and do a back to back settlement. i.e you get money from the new buyer, with which you pay the developer.

That is why Off The Plan is not for everyone...thats why I only buy OTP if I know i can settle it tommorow....with 0% capital growth.

Where is the prop by the way? And with depreciation and rental income...wont you be able to cover your interest payments, if you went on a 1 year honeymoon period without any penalities for selling it earlier. Then you could settle take your time, and then sell at your terms...
Khurram

 

[lawsjs]

Reply: 2.1
From: Jeremy Laws


Try Kellie on (02)9456 2696 for finance. She might be able to get it for you. I doubt your unit will do anything other than lose money in the next 2-3 years, hence my suggestion to sell if you can. I would expect you to have some difficulty however, which is also why the bank is possibly 'iffy' on the deal.

 

[WebBoard]

Reply: 2.2
From: Mojo Jojo


Khurram

Its in Brunswick, Melb. Yes the rental and depreciation should cover the interest but the bank still want me to sell it. I'm having a serviceability problem. I have an existing IP and with this 2nd IP and the new property I want to purchase, the banks are a little nervous.

I am in no hurry to sell this as the new property is off the plan. Its just that the preapproval from the bank is subject to me selling this property.

Just wanted to know if it was better to sell it before settlement but I guess its not.

thanks

 

[Rolf Latham]

Reply: 2.2.1
From: Rolf Latham


Hi MJ

Serviceability trouble - as Jeremy said call Kellie - contact details on JLs post above.

Ta

Rolf