My wife & I are agonising over the following deal;
Brick & tile 4 br, 1 x bath on 900m2 block $62K, rents for $150 pw existing tennant been there for 3+ yrs willing to resign 6 month lease and in a NSW country town >10K pop.
The dilemma is this. It’s been on the market for almost 3 years and the agent advised it has been difficult to even get investors interested because it is in an aboriginal neighbourhood. We told the agent we didn’t have a problem with that as we are supplying a housing need. I thought if the existing tennant moves out I’ll see if the Dept of Housing would take a headlease and gave them a call. They advised they will only take out headleases in “good areas” in the town……….
So if the home goes empty the pool of potential tennants looks like it is getting smaller all the time…..
We are not 1st time investors and would appreaciate thoughtful comments as we cannot be the 1st to have been faced with this investing issue.
Regards
Tony
Too risky for me. 3 years is a long time to liquidate an asset. If the housing department is not keen on that area how loud do the alarm bells need to be.
In the US you can buy these properties for no money down.
Why dont you ask for vendor finance. Say you will pay them $15k now and say $55 in 5 years at 5% interest paid yearly. That even means you will pay more than asking price.
What ya got to loose. You got all the cards – negiotiate accordingly if your prepared for the risks.
Yack
Thanks. Will try vendor finance & if it goes south they can have it back in 5 yrs.
Regards
Tony
Interesting situation, it reminds me of a Robert K story of a property he looked at, agent told him it had been on the market for a number of years because the well was insufficient for the property and hence all other interested parties in the past had backed right off when the agent “sold them out of it” but RK thought to ask a local well digger how much it would cost to fix the propblem and as an approx cost of about $3000 he could buy a bargain.
Moral of the story is … ask how can you make this situation work for you. And like Yak said work out terms that are favourable to you, but always leave the vendor happy too.
Good luck please tell us your result.
Cheers
Leigh K[
]Investment unit for sale – includes a rental guarentee.
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