WHat would you do in my situation

[TMNT]

sorry for the quite personal question

what would people do

Deceased estate, they want approx mid $150ks

my value, further confirmed by 2 other agents, is that the property is worth $180-$187k,

rent $220 per week

area is high in rentals due to proximity to shops, not many OOs

I can reno it, with new ktichen, paint, clean etc. for say about $10k, however that will only increase value to $210k, and selling will be slower because not many OOs, rent will only increase by $30, due to more people in this area wanting cheaper the better

option 1: buy it rent it out at 7.3% which is poor yield in my books
option 2: buy it , and sell it at $180k, hence 17k profit
option 3: buy it, reno it, rent it out, 7.6% yield, still very poor yield in my books
option 4: buy it , reno it, sell it, $35k profit
option 5: buy it rent it out at 7.3% which is poor yield in my books, revalue at 185, make $30k equity, slightly cashflow neg
option 6: buy it, reno it, get my poor 7.6%revalue at 210k, make $40k equity, slightly cashflow neg

 

[Ace in the Hole]

Everybodys situation is different, so their answers may not reflect what would be best for your situation.

Personally, I wouldn't choose any of the options.
If I had to select one, I'd go for option 2, buy and resell right away for profit.
But you may not get a 17k profit, if any after costs, as you say selling will be slow due to not many owner occupiers.

 

[Jake Milne]

I wouldn't buy a property than an owner occupier wouldn't want themselves. If you buy a property that only investors will buy they'll always look at it from a numbers view rather than an emotional one. That's also the case for an area that is mostly investors CG will be restricted as investors continue to buy property for the best value they can where as an area of O.O's will see prices go up as they fight for the home they love.

With that being said a profit is a profit... Depends on your situation, what your goals are and how the numbers stack up in relation to that.

 

[Jenko]

"rent it out at 7.3% which is poor yield in my books".

7.3% yield sounds okay to me. If thats poor where do you find Good yields?

 

[ozmale42]

"rent it out at 7.3% which is poor yield in my books".

7.3% yield sounds okay to me. If thats poor where do you find Good yields?

agree with that post......where ?

 

[mumbai]

Where?

agree with that post......where ?

Seriously !! Where??

 

[Corey Batt]

All things going to plan,

Buy, reno, access equity increasing the war chest for the next purchase.

7.3% is a perfectly acceptable yield in my books.

 

[Peter_Tersteeg]

7.3% yield isn't positive cashflow, but it all depends on the location.

In most parts of capital cities, it's an awsome yield. In the price range indicated, it could be anywhere from good to lousy.

 

[Ace in the Hole]

7.3% yield isn't positive cashflow, but it all depends on the location.

In most parts of capital cities, it's an awsome yield. In the price range indicated, it could be anywhere from good to lousy.

Yes, yield isn't everything.
What good is 7, 8 or even 10% yield if there is no CG and continual ongoing maintenance and repair required, specially for an out of town property.

 

[Rolf Latham]

What good is 7, 8 or even 10% yield if there is no CG and continual ongoing maintenance and repair required, specially for an out of town property.

In addition.................

say 50 bucks a week CF+, how many does one need for recurring income to replace average job ?

ta
rof