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Retail value of remaining prop is 360k with bank valuation of 330k.
I've got 2 quotes for this but both want cash only. Is this typical?
Thanks for all of the responses. I should add, the first pic was taken before the last tenant washed motorbike parts with steelwool & some kind of bleaching agent on the benchtops
hence the requirement for new benchtops. He was evicted but insurance wouldn't cover the damage (an even longer story).Thanks Joe, That's the rough price I had in my head so it's good to get it confirmed by a professional.
Thanks Jane,
We will be replacing the cooktop & sink so no extra trades costs there. I've already bought same satin chrome handles to update the cabinets.I hadn't planned on replacing the splashback. Do you think it needs it? I kinda like it…
swampy30 wrote:Jambv,I am in the exact same situation as you, but my IP is in Sydney. I had a chat with 2 agents, and their advice is that it is preferable to sell the property with vacant possession. Their take is that tenants will pose difficulties with regards to access (too many viewings spoiling the tenants' quiet enjoyment of their home), and also tenants may not present the place at its best.
However from my point of view, as a buyer, I'd also personally prefer to look at a property with vacant possession, just so I'd know there were no issues with vacant possession. But that's just my personal opinion
Bottom line is though, which sector do you think your IP is best suited to – owner occ or investor? When does the current lease expire? You could always put it on the market now, with lease in place, see if any investors bite. If not, market again once current lease expires and tenants have vacated.
Swampy30
Thanks Swampy, you’ve definitely provided food for thought. The house is really suited to an investor & I think there’s some value in selling the house as an investment “package” that is, house + day 1 income. The agent is asking about lease renewal now, hence the original question. I like your idea of putting it on the market “leased” to see if I get a bite & if not, to try selling once vacant.
beedie wrote:Jambv,Believe we are running at approx 85 to 90 days on market for the average property in Brisbane at the moment……….
Depends if you need the rent….. and why would you be selling in the present market if you didn't need to………
Hi Beedie,
I didn’t realise the average was up to 90 days – thanks for the info. I’m keen on selling as I don’t think the market will move upwards anytime in the next 6-12 months & I don’t see the value in holding onto a non performing asset. We’ve had it for around 4 years and the value has increased 40% (gross) & I’m happy with that result considering the GFC & QLD floods.pully wrote:hi jamby.do you have landlord insurance?
then your agent should be following up with that.
regards.Thanks Pully,
We are also pursuing restitiution from the landlord insurance company but any outstanding rental arrears aren't covered by landlord insurance as he was on a periodical lease. ie The agency wouldn't let him sign a new lease until he caught up on his rental arrears. They are also arguing about what constitutes vandalism & are trying to not pay for damage The shared laundry would make me think twice. ie shared laundry may limit the rental demographic & mean higher vacancy rates. Just my opinion.
It sounds like you have invested time & effort into researching the viability of this property. In my experience, once you lay down cash for pest & building inspections you are subconsciously committing to purchasing the property making it more difficult to walk away. But walk away you must as this is now a bad deal for the following reasons.
1) Getting the owner to fix probs is a false economy as he will try to do it as cheaply as possible. Expect probs to resurface.
2) I'm guessing the house is a few years old & perhaps 30k would be better spent on updating kitchen/bathroom?
3) I would never buy a house with a pool that I plan to rent out as renters never look after things (in my experience)
4) I had a work mate whose "10k concrete pool problem" ended up costing him 35k – more than a new pool.
5) 30k fixing a deck/pool/pool fence – would it add to the value of the house at the end?
6) A wise man (my dad) once told me – never buy another man's problems…JAMBV
Be careful when leasing out your property on a "periodical" or month by month basis. Most landlord insurance does not cover damage if the tenant is on a periodical lease. (Found out the hard way!) I always demand a 3 or 6 month lease & would rather lose a tenant than allow periodical renters in my houses.
Milly wrote:Yes I was going to suggest putting the ball in the tennants court. They broke the bracket for the rangehood….they have to fix it. How the hell could that get broken through wear and tear in two years? They have broken the door handle so they should fix it.
Get rid of the property manager. bloody hopeless.Hi Milly,
Thanks for your reply. I actually hadn't thought of pushing it back to the tenants. The prop managers have been quite happy for me to bear all maintainence costs so far. Any idea as to the legal guidelines in ascertaining who should pay for a specific repair?Here is an email we received from the prop manager today. What are our rights as owners in terms of getting a lease with increased rent signed? If we fix these things then the renters will come up with more problems. Surely there must be some recourse for owners?
Following our discussion on the telephone 19/12/2007 we wish to confirm the following:
– Any maintenance previously advised by the tenant/s has been rectified
– Maintenance pointed out when you attended the inspection at the property has been rectified with exception to the ceiling in the kitchen requiring a professional to paint the entire ceiling of that room
We note that the tenant has now advised the following items require attention:
– Broken/Brittle door handle in bathroom
– Front door handle cracked and broken
– Rangehood requires new bracket
They have also now advised that the wood around the gravel under the clothes line is warped/twisted from being expose to the weather. Tenants have said that it is twisted out of place.
We note that you do not want these items attended to at this stage. Please be aware the tenants can breach you/our office for items not repaired and if they are aware of their rights may with hold rent until maintenance is complete.
The tenants have indicated they do not intend to sign the lease until ALL maintenance has been completed.
We would suggest from conversations with the tenant that they are unsure if they want to stay at the property or have other intentions of maybe purchasing a property of their own and are also trying to avoid a rent increase by not signing the lease agreement.
We have discussed this situation at length – the following are your options
1) have maintenance completed, the tenants will then consider signing the lease and the rent increase will take effect.
2) Give your tenants appropriate notice (two months) to vacate the property without grounds – then have maintenance completed and re-let the property.
3) Not to complete the maintenance, not to evict tenants – the tenants then may choose to give you two weeks notice of their intention to vacate the property.
4) Complete maintenance at the property and then give the tenants notice to vacate the property without grounds – this avoiding tenants disputing the Notice we serve on them to vacate.
Our recommendations would be the 4th option. We believe that this option will avoid a dispute between the tenants and yourselves. Any damage to the property that is not considered wear and tear can then be repaired using the tenants bond.
Please notify our office of your instructions at your earliest convenience so we may proceed accordingly.
RegardsThanks Terry. That website was exactly what I was looking for. Looks like I'll have to put up with them for 60 days & hope they don't apply to small claims tribunal.
Jon,
Thanks for your detailed response. It sounds to me like there is a large element of cold calling in your success (something I am not very good at!) so I'll probably stick to what works for me.Gents,
Thanks a lot for all your comments. I wasn't seriously considering Japan, I was more interested in the variables people consider when investing o/seas. Apart from the obvious language difficulties, who would have thought you'd need to replace the whole house every 20 years or so?Regarding investing in the USA, it seems to me there is opportunity to make money & even more opportunity to lose your shirt! I wouldn't seriously consider the USA unless I spent a few weeks there.
Qlds007 wrote:Quick question without naming names. Where is the property located.Hi Richard,
The prop is located in Crestmead, QLD.Hello,
Just to update everybody, I ended up ringing the council. They were very helpful & answered all my questions straight away. It turns out the prop was 7.5 years old based on council’s final building inspection so we passed. I guess the take home point is always independently verify your facts!P.S. When confronted, the agent was pretty hostile. It’s always interesting to see how quickly someone’s demeanor can change.
P.P.S. Thanks to everyone for the replies.
Hi Wayne,
I just did the same thing in Qld – rushed through over 20 props in 2 days! Anyway, here are some tips.
1) Call an agent & book a specified amt of time with him. I found 20 mins per prop was sufficient. I organised appointments the Wednesday before I flew up & that was when they were most receptive. (I booked 16 appointments on the Wednesday in 1hr 15 mins & wasted 2.5 hours on the Friday to get 3 more). I used Outlook to keep track.
2) Take lots of pics. Then take more. Then lots more. You may only be there once so better to take more than less. At the start of each house I would take a pic of the front of my rental car so I could differentiate between props. Also, take pics of surrounding houses/views.
3) Take lots of notes. Anything you think is important. There’s stuff I wrote down that I can’t remember writing down that has swayed a yes/no decision on a prop.
4) Google Earth is your friend. Use it to ascertain proximity to shopping, schools etc. Just remember that sometimes the images are 2 or 3 yrs old in Australia.Originally posted by sanjivgupta:Hi there,
I inspected a potential IP on Saturday and am looking at putting in an offer. The property has a 2BR house (around 10 squares) with plans and permit to build another 2BR unit. Upon visual inspection I noticed the roof (tiled roof, terracotta I think) has got moss and fungus and requires restoration work. I was wondering if someone can tell me a quick and rough estimate for the restoration work. I will be getting building and pest inspection and subsequently estimates from tradesmen for any repairs but just want to get a rough cost estimate for roof restoration before I put my offer in.
Any help will be appreciated.
Thanks
Sanjiv
*******“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hello,
I recently got a quote for a roof restoration on a standard 2/3 bedroom Californian Bungalow (can’t remember exact size) that had unglazed terracotta roof tiles with very bad moss. The quotes ranged from $1850 – $2400 which included a high pressure wash to remove the moss, an insecticide to prevent future moss growth, re-cementing the cappings & replacement of any cracked/damaged tiles. This was in Metro Sydney.
hence the requirement for new benchtops. He was evicted but insurance wouldn't cover the damage (an even longer story).
