Property Investment_ No.1

hi there,

if I was thinking of buying this house I would first find out (from the agent) what I could get it for. usually let’s say the list price is 35K, ring the agent and say, look I know what the list price is, but what’s the real price? what’s the vendor’s reason for selling? You may hear ‘the vendor has a mortgage on the property for 29K and I know she wants to get at least that. that could tell you that if your offer was 29 plus agent’s commission you could pick it up for 30, 31K. Could make a difference to your figures.
Just talk to the agent. get as much info as you can. Has this been a rental property before? (if yes – did you manage it? what kind of tenants did it have? Any trouble with it?) if it was owner-occupied, that can mean the house may have been better maintained than if it had been a rental. (not always though!)

You mentioned not having much capital gain and being hard to offload if you want to sell. well, that works in your favour when you’re buying – not as much competition to buy that house, and therefore, you could get a good deal.

Also, why would you want to sell? if you end up buying a structurally sound house that ends up getting a good long-term tenant, then why would you ever want to sell it?

Well, maybe there’s a lot of maintenance. Or else the house wouldn’t attract a good tenant. (bad condition, bad area, too many rentals on the market, etc etc) In that case you wouldn’t want to buy it.

So what I would do – I know this is only hypothetical, but work out the numbers on ‘what say I can get it for this price’ – the price you are prepared to pay. Put an offer in at that price, subject to satisfactory inspection, builder’s report, pest report, etc. (talk to your lawyer for wording and any additional due diligence clauses you want.)

then you have a couple of weeks to do the due diligence, while knowing you have the house tied up if you want it, but can pull out if you don’t.

get it assessed for rental by someone who isn’t selling you the house, i.e. a different agent.
Ask them if they would be prepared to take the house on as a rental. Even if you intend to manage it yourself, you need to know what a professional thinks of the property.

cheers-
Mini

PS Living in it for a year is fine if you use that time to do it up. I don’t even know if you actually need to stay there for a year to qualify for the FHOG do you?
hey I just looked at the pic – looks solid! the phrase ‘built like a brick shiznithouse’ comes to mind, hee hee!!