Property for sale.

[One-off]

I'm posting this to gauge interest in a property that I intend to market.

The property would be negatively geared to the tune of about $100 per week (assuming top marginal tax bracket). It is located in the lower Blue Mountains west of Sydney.

Yield on the property is not spectacular, but the tenants are! Over the time we have owned the property they're redone inside and out, the gardens have been landscaped, junk removed and the house just shines now. There are still a few things left to do, but we would contractually commit to seeing them through. They would be prepared to sign on to a 1 to 2 year lease. They would also be prepared to help with future improvements to the house.

We believe the Blaxland area is set for a real rise soon (18% last year but more on the way). Land agents there are screaming for properties to sell.

We would market this as an investment package - full QS reports, building inspections, help with setting up accounts and so on. for someone starting out in property investment this could be an easy way to get the toes wet, and we'd be available to help.

We have to sell to fund another purchase.

Details:

Price: $340,000
Rent: $240 per week
Description: 3 bedroom rendered brick veneer, house, basic landscaping front and rear. colourbond fences, good neighbourhood, quiet streets, handy to but not next to schools shops and local amenities.

If interested, or wanting more details, pls either post queries or send a private mail.

Cheers

 

[Aceyducey]

How's the fire risk?

 

[One-off]

It's insured, and you'd have to burn down half of Blaxland to get at it. Pretty safe, in other words.

 

[Tony]

Hi One-off,
Not doubting the quality of the property, but i wouldn't purchase a house on the strength of the tenant, certainly one with such a low yield. As cashflow is very poor, investor can only look at the potential capital gain & needs to believe that this particular property will perform well over a medium to long term. If an investor does purchase your property, they should consider the opportunity cost (ie. if $70,000 is outlayed on 20% deposit, could they have used the money elsewhere with a better return & maybe better capital growth?).

Hope you find a suitable buyer, but as an investor i would defintely pass on those numbers.

Good luck & interested to hear how you progress.

Regards Tony.
PS. Not trying to be overly critical, but rather explain my thought process on the deal.

 

[One-off]

Tony,

You're partly right. This is very much a capital gain scenario, not a cash flow deal.

However, the nightmare that most landlords face is getting reliable tenants that will look after the property as if it's their own. Actually doing improvements is something that (a) is just about unheard of and (b) adds further value to the property.

And if you get them, you lose them just as quickly - these guys will sign a long lease, lowering other costs.

As a side note, there are other uses for $100 per week. I saw a second hand commodore advertised for $107 per week on the weekend.

Cheers

 

[brains]

Hi one-off,

I have friends in Blaxland living in a 3 b/r brick veneer home with nice gardens and bbq area and extension sunroom.

Late last summer (feb/march) i was over their place and they said the value of their property was about $240k (real estate valuation), if i add 18% to $240k i get about $283k, which is probably the avearge price for Blaxland (i havnt checked).

Also considering the rental return for your property is 3.67 % gross, i think you might be a bit optimistic in your asking price.

I hope you sell it tho. Good luck.

 

[One-off]

Brains,

In actual fact, $283-285 K is the average over the last 12 months. The fibro 3 bedroom next door to mine sold last week for $285 K - they have to tear down the garage and replace the bathroom, as one has dry rot and the other has wet rot.

3 two beddies have also sold in the last couple of months for $285-290 K. They were Hardiplank or wood and pretty original in condition.

I settled the price asfter speaking to several land agents and downgrading their estimates for a bit of a caution factor. Most were saying $350 - 360K, however.

 

[brains]

they werent trying to buy the listing were they?

 

[One-off]

Of course they were - that's why I discounted it.

 

[Aceyducey]

With the property prices in Blaxland, I had a quick look in realestate.com.au and they had two current listings - one 3-bedder for $285K and one for just over $300K.

$340K sounds a bit high in comparison (without going into specific street locations or doing a suburb search)...there would have to some large mitigating factors.