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My thanks to both of you. The present open market rent in the area is just over half of what the builder is offering for the 2 to 3 year period.My thoughts are that the local rents MAY go up during the next couple of years and as the erea becomes more established the value of the property may also increase. I would hopefully hold it for the long term (15 to 20 years maybe) . The depreciation schedule will help and when the builder’s lease expires he will make good any repairs (but I don’t know yet about wear and tear) and complete all fencing etc. There is a good shopping centre very close by and a bus service about 50 meters away – nearest train station is a good 6 k’s away. So with that and remarks Ive had from local estate agents it seems that it would be easy to rent out for the long term.
I hadn’t thought about insurance though! I just assumed that the normal landlords insurance would be sufficient cover??? Will have to check that out, and the situation with regards to wear and tear.
Does anyone know of any experiances, good or bad, with type of arrangement?Originally posted by crusher:There really is not enough information here to give any sort of detailed opinion but 9% is a good return for a new property as long as you don’t pay an over the market rate price for it. You need to consider how long you want to hold the property and what sort of market rent return you will get when the builders lease expires. The location and normal rental demand is important as well.
Todd Burns
http://www.freepropertyhelp.com.au
