Hi forumites,I have an IP in the centre of town in Emerald. It is a 3 bedroom house on a small block. House rents for $500 per week and tenants have been there for 2 years and look to want to stay on. The house was built in 1959 and we have done a full interior reno before it became an IP as it was PPOR at the time. Now the outside needs some work and by some work I mean a fair bit. The gutters need replacing and I would like to replace the roof as it is asbestos sheeting. I have quotes for the work totalling $25k approx to replace roof and guttering. My concern is that given the age of the house am I just better off selling the house and going onto another property or keep it and get the work done. The rent is comfortably covering the repayments and all outgoing expenses. I dearly do not want to sell but if it is better to sell and move on then that is just what has to happen…….Thanks in advance for the words of wisdom.
Is the property in a growth area? Do you think there are any indications of it going up in value over the long term?
If the property isn't costing you anything to hold on to and you think it will continue to grow in value, then I'd consider holding onto it. I'd also revisit the need to spend $25k on external works – seems like a lot. Is it all completely necessary?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Jamie,yes in my opinion it will go up in value. It is in a good location and due to its location is ideal for tenants as they can walk to shopping centre and all major town amenities. The gutters definetlly need replacing at a cost of $4500(the rest is replacing the roof costs) and nobody in town will touch the job without replacing the asbestos roof sheets as there is a need to drill into them when replacing the roof barges when the gutterring is done.
I've got a couple of properties in Emerald. One up on Esmond Street and one on the southern side.
As you would know Emerald experienced some good growth last year and since then the market has softened and come back a little. This is due to a number of reasons I'm sure you're probably aware of as you're in the market yourself.
I think Emerald has some tremendous upside. There is some significant investment to come in the area and the town is very well placed to leverage of what is about to occur in the Galilee Basin. IMHO I think the long term fundamentals are incredibly strong.
I don't think the market at the moment is right for trying to off-load a property. If it was the case you decided to sell I'd wait until the next upturn in the market. It got pretty hot last year and buyers were scrambling to get in the market and some properties went for more than they should have…..
Hope this helps mate,
Jack
Hi Jack, thanks for the reply. Yes I agree with what you are saying. Also living here in Emerald I see first hand what is happening too which is beneficial.
wakebrownb wrote:Hi Jack, thanks for the reply. Yes I agree with what you are saying. Also living here in Emerald I see first hand what is happening too which is beneficial.Bang-on mate! Ride the wave!
Have you got some equity you could use to complete the renovations?
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