hi all
i really need some of your knowledge on this.
ppor owe $80000 value $220000
This is the investment property which the property investment advisor convinced us was a good deal.
explained on another thread (out of the property market)three bedroom torrens title townhouse cbd adelaide west side. group of (54)
land $100,000
building $120,000
purchase price total $220000
furniture $15000
loan costs $5000
refinance $4500
overdraft protection $8000 total $252500
break costs $ 3500
total $256000loans $244500 @ 7.25% fixed interest only $17726pa
overdraft protection $8000 @ 10.5% 840pa interest
borrowed the lotincome rent $17576pa
expenses
property mgt 10% $1758+gst175 total=1933pa
council rates $1400pa
water rates $800pa
maintenace $600pa
tv/video $600pa
emerg s levy $300pa
dway strata $400pa
totals $6033total cash expenses 23759 (-6033)
dpereciation at this time
building 4% of $98000 (cost) $3920
furniture $1900
furnishings $1400
totals $7220im on 30% tax scale claim 2,166 non cash deduction
current value of townhouse $280000-$300000 in current market
my gut feel is to sell as i feel i am over extended if something goes wrong such as increases in interest rates rising etc.
plus the depreciation will get smaller over time but the rents in these arrangements are tied into cpi increases.
The townhouse is currently used as a serviced apartment and the rental is for 52 weeks has been no problem with a major player in the accomodation game.
My current lease runs out in March next year and is by mutual agreement.
They have indicated that they are interested in taking up the option for a further three years
or sign a new lease which includes only a net rent figure and they take over the furniture etc
Or i can go to the private market
my gut feel that i should sell and get out while prices are fetching well in adelaide and the buyer that maybe more cashed up can make up his or her mind which way thay want to go.
I feel i am too stretched to sustain any upheaval in the market.
I would really appreciate responses from the forumites.
Do you think the figures suggest i am right about my gut feel. To sell and start over in another direction in property.
PLEASE YOUR THOUGHTS ON THIS
regards
alfHi Alf,
I think you’re answering your own question and if your guts are churning then yep selling now near the top of the market sounds like a good option.
Not sure but is your total debt $244500+$8000+$80,000 = $332,500 over total assets $280,000+$220,000 = $500,000. Your current loan on the townhouse being interest only and just neutral does not look promising as you say, and leaves no room to move – recommend you see a broker about that high fixed rate – how long is it fixed for, seems exhorbinant!! You’d save almost $2,000 per year dropping to a 6.5% product.
If you can’t improve your loan cost position then selling the townhouse at $280,000 would return about $20K after loans costs and get you out of a fixed ‘neutral’ geared investment, I’d sell.
Look forward to hearing others spin. Good luck, enjoying your informative posts!
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MelHi,
The critical figure you mentioned was:
total cash expenses 23759 (-6033)How many of these properties could you afford to own? Re: depreciation… read: http://www.propertyinvesting.com/depreciation
What doesn’t make you rich will end up making you poor.
I’d be looking elsewhere if you wanted a positive cashflow return.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
hi
thanks melanie and steve
kind regards
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