Selling Dilemma, Please help

[doozer]

Desperately seeking advice:
Myself, my wife & my mother in law have equal shares in an investment property in Bundaberg. The house settled in Sept 04 but has been a problem re maintenance from the start. I would like to sell, perhaps mine & my wife's share to my mother in law or another party if we all want out. I realise that we are perhaps better off waiting the 12 months to Sept 05 to get the 50% CGT exemption. other relevant figures are below:
Purchase price: $195K
Loan I/O: $179500
Value now: $205-215k
Rent: $200p/w

Maintenance is nothing major just consistent little things which are adding up. House is about 50yr old. What should we do??

 

[Sailesh Channan]

Doozer

You do realise that you are probably looking at making a loss when you sell. This is after you add up purchase costs such as stamp duty,loan set up fees, solitors fees,etc. You will also encounter selling costs such as agents commission, solicitors fees and possible early loan discharge fees.

When entering into any property investment you need to have contingency funds to cover repair ( more if it is an older property)as well as loss of tennants.

Most investment properties are considered a long term investment and generally over time your property will appreciate in value giving you equity to repeat the process.

Regards

Sailesh Channan



Regards

 

[doozer]

Thanks for the quick reply. I do realise the long term nature of property investment & yes we do have sufficient funds to cover repairs etc. Am also aware that we may very well make a loss. I guess my question regards the following; is it easy to sell 2 parts share to a third party or are we better off selling the lot to an external buyer?

 

[Sailesh Channan]

Doozer,

You may have some luck in selling your share to one of the investors looking to get started in property. This forum may just be the place to find someone.

Realistically though, you will find that the sale will come from the local owner occupier market. This would mean you will have to sell the property as a whole.

Regards

Sailesh Channan

 

[Kevin Hockey]

Hi Doozer,

The house is 50 yrs old, its natural it will have maintence issues.

How long is the tenant's lease. If it runs out around the same time as the 12 month period expires I would hold on until then. At least you can sell it to a wider market, investors or owner occupiers.

Good luck.

Kev

www.nundahrealestate.com.au

 

[quiggles]

I'm a bit confused here. Have you discussed this with your mother in law, or your wife? Be careful here about everyone's expectations - your mother in law may not be able to buy you out, and may not want to at above purchase price. She may equally not want to go into partnership with someone else, and may not want to sell. What then?

You guys need to sit down together and nut out your options in a constructive fashion. What's your plan? What are your expectations? what is your long term strategy? Are you making maoney/losing money/breaking even? Are you committed to property investment, or investment at all?

Really work out the issues and you may find greater clarity and certainty.

Best wishes.

 

[doozer]

Thanks to those who have replied. It's not an easy decision I realise. I have 3 other properties which given they are relatively new have not given me a major problem with maintenance. I'm just thinking whether selling this one would give us short term pain for long term gain.
However I still think there is some steam left in the market here so all parties at tis stage are happy enough to hold for a little longer & reassess the situation when the time comes.