investment property problem

Hi everyone...  after a long absence I am back.

I have a question.  We purchased a property last year and now want to sell it.  There is no urgency in this sale as both our incomes and the rentals we get is enough to cover repayments plus living.  Thing is we want to sell up and move overseas in approx 1 year's time and sell our properties in the meantime.

The property is really good, renovated, high rental return ($320p/w) but the real estate agent we are using (my brother, new to the business) is negative about it, or perhaps more realistic than we are.  To us, the property should sell for at least 300K as it is close to the water, no work needs to be done and the rental return is fantastic.  I have seen others for sale in the area, either smaller or in need or renovating, no rental return and asking 279-285K.  So we base our price on this........However, could my brother be right?  The area is a little run down, (Deception Bay, Brisbane), but they are doing it up nicely with a huge resort and new shopping centre coming up, so it will pick up in value...once we are overseas!

It went on the market initially in March '08 for $320K (following our initial agent's instructions), unfortunately back then it was vacant and interest rates were at their worst... it the space of 6 months we dropped the price to 290K but still no sale.  Now that we have a high paying tenant, rates are dropping and the grant is higher...it should sell, right????

Oh, to add to the issue, the owner of the house next door is desperate to sell and it asking for 260K (not neg.)  with a just placed tenant paying $280p/w  The house is run down and awful inside - nothing non structural renovating can't fix, but still with our property all they have to do is move in and it's all done for them. 

Any views anyone?  Pls help

Romina and Luca, bubba Nicolas + one on the way

Your neighbors house returns the same rental yield as your house.
yield = rent per week * 52 / price of house * 100
5.6% rental yield neighbor
5.5% your house yield

Sometimes a house can be lower in its selling price by being on the market for a long period of time. Sellers notice that your house hasn't sold and that you have lowered the price. It is a hard time to be selling at the moment as people as being spooked by the share market falls lately.
Also an investor may look at the cheaper property next door with the view that they can add value to it through a reno and add instant equity to the property and later on increase the rent making the yield rise to a higher percentage.
You should keep an eye on how hard a time your neighbor is having trying to sell his run down place as this indicates how cool the property market has become.

Comments are of a general nature and may not be relevant to your individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.