When did residential property become commercial property?

[RedCat]

So my $270K offer on a property priced at $285-$295K was rejected today as expected. The agent then says "in this town if a property is renting for $300pw then it's worth $300K".

I replied "well then in 12 months when they start building on the land next door I will only be able to rent it out for $250 a week so does that mean the property is only worth $250K?"

He then asked if I knew for sure that there were approved building plans (which I didn't as I simply assumed at some point a house will be built). Smarty pants.

I told him I wasn't prepared to pay more than $280K and he again stated the vendor will only consider between $285-$295K.

This property has been on the market for 4 months and I'm pretty confident I'm the only buyer at the moment. Any suggestions on how to handle it from this point?

 

[Aaron_C]

Is there a particular reason why you want this property so badly? I'd move on if the vendor isn't playing ball...

 

[RedCat]

Aaron you know I'm a sucker for a bit of charm on a property and this one has that and a lovely view (albeit one that I wouldn't be enjoying personally). Great tenant that I think would be long term but that's certainly no grounds for buying I know, simply a nice add on.

Have just drafted a response to the agent that I will sleep on. It states I have an offer in on another property in the same town (which is true) that I think will come through so happy to leave it at $280K.

Either way I reckon his whole "property value is based on rent" vibe is ridiculous. It's renting out well because it's a brand new renovation and that doesn't last forever.

 

[vaughan]

Either way I reckon his whole "property value is based on rent" vibe is ridiculous.

IMHO it's how property SHOULD be valued.

 

[RedCat]

Totally see what you're saying, but it isn't valued that way normally, unless the property round the corner which rents for $875K is worth that now and not $1.3M.

 

[vaughan]

If there were two people to work for you, one could bring you in $250 an hour, the other $300 an hour. Which is worth more salary?

 

[Aaron_C]

If there were two people to work for you, one could bring you in $250 an hour, the other $300 an hour. Which is worth more salary?

You pay the guy who can bring in $300 per hour the same as the guy who brings in $20 per hour and keep the difference.

 

[Bigtone]

Either way I reckon his whole "property value is based on rent" vibe is ridiculous. It's renting out well because it's a brand new renovation and that doesn't last forever.

ask him if he has any vacant land for sale, preferrably with harbour, bay or lake views, then offer him $0 to match weekly rent