Forum Replies Created
Personally, I’d go the polished floorboards. I would never attempt it myself though. All credit to those who have, but a close relative who was a real estate agent for many years said she had seen some really ordinary do-it-yourself jobs which detract rather than add to value of a house.
For the work involved, heavy machinery, stinky fumes, it is very cheap to have it done by a professional, in my opinion anyway.
Wylie.
Simon is right. If they are in breach of the lease, your PM can start proceedings to get them out NOW. In Qld they only need to be 7 days overdue to be in breach and for the appropriate paperwork to start.
If they do pay and you want to get them out at the end of the lease you (or your PM if you are using one) need to give them the appropriate notice that the lease will not be renewed. You can then get in and do the improvements and charge more for the next tenant.
If they stay and do pay rent, I’d be inclined to do any work they will allow you (remember they are on cheap rent) so that the work is done with a tenant inplace. You will save some time and money doing this rather than waiting until it is empty.
Good luck, Wylie.
Thanks brahms and mja. I have forwarded the thread to my friend. Much appreciated.
Cheers, Wylie.
Thanks Brahms. The apartment is on floor 20 with three bedrooms, two carparks, 8 square metres of storage space, two bathrooms, gym and spa.
Does that spec seem okay for $920K. Apparently they put down 10% now as deposit.
My friend’s father is happy but her mum is a bit worried.
Thanks, Wylie
If a vendor has two contracts on offer and one is cash he has the option of signing the cash contract. Until the cooling off period was implemented, this meant the contract was unconditional immediately on being signed by both parties. Now with the cooling off period there is still a wait until the contract goes unconditional, but the vendor knows the purchaser risks losing a percentage if he pulls the cooling off clause. Of course, the cooling off period could be waived by the purchasers.
If I had two contracts, say $350K cash unconditional, and $345K with a building and pest clause and finance clause, I would seriously consider taking the cash offer so I could move on and not have to wait for those reports.
Say you hold out for the $350K with the clauses. Unless your agent keeps marketing your property, you risk losing all buyers looking in the two week period until the clauses lapse. Your house is effectively “off the market” and your buyer may not get their finance or get cold feet and use the clauses to get out of the contract.
Your house then goes back on the market, people think there must be something wrong with the house because a contract has fallen through, or it falls into the “stale” basket. And any buyers looking while the clauses were in place have possibly bought another house, so you lose them as well.
We always buy using a clean, cash contract. We get our finances organised prior to making an offer.
Wylie.
Definitely call the Residential Tenancies Association (or appropriate association in your state). There are rules you need to follow and rather than state them here (and probably get them wrong) it is imperative you get it straight from the association and follow those rules to the letter. Otherwise, you could have trouble down the track when your tenants want their “stuff” back.
Wylie
I think 20% reduction for a cash offer is quite insulting. Unless the vendor is desperate or the property way overpriced, a cash offer is (like mentioned earlier) just a bit more interesting for the vendor because they only have to wait (in Qld) for the cooling off period, and not wait for finance and pest clauses to expire before the contract becomes unconditional. We bought our last IP with a cash offer because another contract had been signed two days prior, countersigned by the vendor, but not signed off by the purchasers. We slipped in a cash offer, clean contract, got the house.
In this case the cash offer meant the vendor could go to sleep that night knowing the house was sold.
Wylie.
I don’t know whether the rules are different in Queensland, but by the sounds of your house, it is uninhabitable. If you have raw electric wires and/or sewage coming out from pipes, you need to get the tenants out NOW.
Call your residential tenancy authority and get the forms to have the house declared uninhabitable as of NOW. If that means having the water and power cut off to make the decision easier for them to leave, do that.
It sounds like you have a big repair bill anyhow, and the risk is they will do further damage, but when we issued a notice to quit last year to a tenant who did some damage while “high”, I organised for the police to come round with me (I self manage) on the morning after they had to be out because I felt unsafe going myself.
I didn’t have to do this because they actually moved on the final day and we saw that they were moving, but the local police were happy to call around with me if I felt the need for them.
Take action right away, but get the proper forms filled out.
Good luck.
Wylie
Hey Foundation. Sorry if I accused you of sarcasm when it was not intended as such.
I totally agree with many of your ideas and practice most of them as well. As long as they don’t have to go into the shop my boys will wear the $70 boardies I get for $8 at our local Lifeline.
Not many poor looking people shopping at my local Lifeline. I have a friend who says she won’t shop there because it is meant for needy folks to cloth themselves for less than “normal” stores. I tell her that it is the “less needy” who shop there who keep the cash registers full. I love the hunt for a piece of treasure and I also give bags of it back to them regularly.
Just another piece of advice for andymitchell. We never did go in for the basinet or fancy decorating of the nursery thing. I am a no fuss girl and didn’t want all the trimmings because they are only babies for such a short time, and then you have all this “stuff” left over and have to paint out the decorative clouds on the ceiling, etc etc.
Our babies didn’t really start to cost us money until kindergarten, so unless you go in for the fancy trimmings, you can live fairly cheaply (providing you and baby are healthy of course).
I have a bit of an aversion to affluent (should I say effluent) foks because we know a family who pay to have the dog washed, the lawn mowed, the ironing done, the cleaning done, the pool cleaned and then the wife tells all and sundry how difficult it is being a stay-at-home mum. Spare me!
My advice, keep it simple, live as cheaply as you can and enjoy that baby.
Wylie
I think Foundation has some good ideas, but I think his delivery could be a whole lot less sarcastic. Do you really think andymitchell will be going to restaurants three times a week? Not everyone suffers affluenza you know.
Andymitchell – you and your wife are probably doing most of these things anyway. In fact, in view of your predicament, I feel sure you are living very carefully.
Don’t ditch the mobile though. I used to pick my husband up from QUT at 9pm and got a car phone (back in the old days when mobiles were “bagphones” and the best alternative was a fixed line car phone). There was no way I was going to break down in my crappy car with a baby in a capsule and a toddler. Get your wife to carry a mobile with no plans and use it as little as possible.
And don’t trade in a good car for a crappy car. You need to be safe but you don’t need luxury.
I think the people offering help and suggestions are fantastic and I also applaud you all for your generosity.
Stick with it,. Like childbirth, in a little while you’ll forget the pain you are going through now if you can just tread water for a while.
Good luck and best wishes.
Wylie.
Could I also add to this that some comments have been made about the low offer. Many posts on this forum involve comments like “can’t wait until the prices go lower to snap up bargains” etc etc. I don’t think putting in a lowish offer is an insult. Vendors either say no or yes, or make a counter offer.
In this post, mention was made of an offer 16% below asking price. I don’t think that is an insult, but I do think the agent has no right to treat a prospective purchaser with such hostility.
Wylie
Just don’t forget that if you lock into a fixed rate and decide to sell during that fixed period, you will be up for penalty fees.
Wylie
I would think that the vendor should get fairly annoyed that their agent is sabotaging their sale. I am not a lawyer, but I thought all offers on paper had to be presented. If I was the vendor, I’d sack the agent and get another. Unfortunately, because you were introduced to the property by the agent, even buying it through another agent would mean he is entitled to some commission (in Qld anyway).
If the vendor does change agencies and you buy through a new agency (or indeed privately from the vendor) then as I see it, it is up to the two agencies and the vendor to work out the split of who gets what regarding commission.
We recently bought a house which had been listed with an agent for six months. We looked at it with this first agency, who never called me back, even though I requested some information. When we finally looked at it again (after the price came down $200K) it was with another agency. I know that because I looked at it with the original agency, that agency got (I think) 20% of the commission.
If there is an issue about who is entitled to what, it is not your problem, but the problem between the agency, agencies and/or vendor.
Good luck, Wylie.
Your situation sounds very like how we have lived for 20 years since we married.
You say they are “slightly” negative. Depending on how negative these properties are, if you can renovate cheaply (paint, add dishwasher, a/c – whatever suits the house and is fairly cheap) to increase rent I’d do it. I know that Brisbane rents are increasing (at long last) and depending on where you are, the slightly negative could soon be neutral.
You will incur costs to sell and pay capital gains tax, so if it was me, I’d do what I could to increase the rent, sit tight (if you can afford to) and let rents catch up. Meantime, pay everything you can into your PPOR. Hopefully your IP loans are interest only. If not, that would make a difference to your cash flow.
If you sell one IP to reduce debt, you will pay all the selling costs and then have to buy again to get back in the market. If your IPs are in good areas and will make growth, why not hold on.
Better (in my opinion) if you can hold tight, and be holding three properties for the next boom, even though it may be several years away. In the meantime, tenants virtually pay the loan.
This is my opinion only, because I have regretted each property we have sold, even though we had good financial reason to sell. I also look at our houses as forced savings. If we had more cash flow, I reckon we’d spend more, without a doubt.
Wylie
Am I the only one who hasn’t a clue who this is about?
Wylie
I agree with yack.
My parents have invested in blue chip shares that have turned into dogs. Their houses may have dropped a wee bit but that drop is just a tiny slice of the HUGE increase that went before it.
Like shares, they only lose if they sell. They lost $26K in on day on shares. After several years they got back $8K (from memory) after the company was taken over by someone else. It didn’t put them off shares though, but most of their wealth is in property. It did put them off the licenced financial adviser who investigated and told them all was well about two days before the fall, after they questioned some rumours in the wind.
I am not against shares, but I have been burnt by shares, never by property.
Wylie
What to offer is a really hard question. If you have done your homework and think the house is worth $355K then perhaps offer $340K or $345K. If I was the vendor, I would not accept a low offer, but I would wait to see what the auction brings because of the advertising I had spent getting to auction.
Having said that, someone close used to sell real estate and said many times a vendor got greedy, knocked back a good offer prior to auction, then failed to get even up to that figure.
The questionable thing is where does the figure of $340K to $370K come from? How much faith do you have in the real estate agent’s word. You need to have done your homework so you know the values in the area. The quoted figures may be unattainable in this market.
If the house goes to auction and is passed in, it may go for less than they expected. If they decline your offer and the house sells for higher in the quoted range, then you move onto the next house.
If the contract is clean, ie. no conditions, they have time to negotiate with you and still not lose momentum for their upcoming auction.
Only you can decide on a price, and if it isn’t accepted, go to the auction and you might get it for that price, or maybe more, or less, but go in with your eyes open and a good idea of what it is worth.
Good luck, Wylie.
My thoughts is that if the auction is 1.5 weeks away, your offer would need to be “clean”, ie a cash offer. At the very least, any conditions would need to be satisfied prior to auction day, in which case a good agent would still market the property in case you decide not to go ahead.
If you put clauses on the contract that mean that the contract isn’t “unconditional” prior to the auction, the vendors are taking a huge risk of letting go of anyone else who may have bid.
I would suggest that being this close to the auction, your offer would have to be fairly attractive to be accepted.
If it was me, and assuming you are satisfied that your building, pest and finance are “go” I’d put in a clean contract at whatever you think the house is worth and if it is not accepted, go to the auction, let it run its course and if you are still within your budget jump in at the end.
Wylie
I assumed on reading your post that you may be financially committed to the trip. I agree that if you can postpone it you should, otherwise I’d try to keep the house by some other means, even borrowing just for two months’ repayments.
As has been said, you may find it is not finished before you go, in which case your can neither rent it nor sell it, unless you trust someone to do these things for you.
Wylie
I assume your plans were to rent the property if it had been finished prior to your overseas trip. If so, why not leave it to an agent to rent it while you are away, assuming it is ready.
Is your finance through a broker, and if so, can he organise anything, a repayment holiday, or maybe extra funds to cover the repayments for two months until you are back.
You don’t want to be worrying about it while you are away, but on just the facts you have given, if it were me, I would hate to sell it for the sake of two months’ repayments.
Could your family pay the first two months’ repayments to give you breathing space until either it is rented, or you are back?
My thoughts, Wylie.
