Guide me if I am right please

not sure if that was sarcasm, but my response would be something along the lines of “it depends on what your investing goal is”. if it’s +cf that you’re after, then it’s definitely worth considering renting the place out. Nothing wrong with having both +cf and +ve CG

eRRaTik,

Nope no sarcasm intended, strange for me, but true. My comment was very much “matter of fact” and I stand strong that if ANYONE who achieves that kind of CG (50%) in 2 years, should seriously consider holding such an asset. I am by no means, anti-cashflow positive, on the contrary, all my IPs are cashlow positive HOWEVER to sell any asset which accelerates at that rate is pure STUPIDITY plain and simple!!!! No hidden message, no sarcasm….FACT!!!

If you think that’s harsh, then you are not interested or know very little about wealth creation; obviously you are more focussed on short term monetary gratification, and albeit, it has its merits, will not sustain wealth in the long term.

eRRaTik, I agree that renting would be a better option, however I believe Padma stated that they had “put it on the market” hence my response was addressing the SALE issue.

As a note of interest, eRRaTik, I have been investing for almost the same number of years you have been alive (I took a peek at your profile), but thanks for the investing tip anyway!!! (Oh and FYI…..that WAS sarcasm)!!! [biggrin]

Jo

Thought you’d put your 2c worth in Derek!!! [biggrin]
Always a pleasure hearing from posters such as yourself…..always the voice of reason and so diplomatic……sheesh!!! [blush2]

Jo

Hi padmaa23108,
I’m not going to answer your questions about whether to hold or sell as they are the sort of things I’m asking of myself right now. If I come up with an answer I’ll let you know though

With regards to renting to students;
1) Follow Derek’s advice – time your rental period.
2) Consider not trying to lease individual rooms. Advertise a “5 separate room residence with common facilites….” and let a group of friends lease the whole place and split it up amongst themselves. If they only have 4 people they may still take it on in the hope they’ll pick up a 5th early in the semester. In the meantime, it’s only 25% more to pay each. You get the picture. Let someone else worry about renting the last room rather than yourself
This theory does not work so well on larger groups (10 etc), but I remember from my own uni days (not that long ago) when friends of mine would rent out a whole house with 4-8 people contributing to the rent. I have a bunch of climbing friends in Brisbane who are still doing exactly that.
3) Students are not a lot different to other people. There are good ones and bad ones, good payers and bad payers. Just do you background checks as thoroughly as possible and maybe see if you can find out if their parents have some money to help out their little darlings if times get tough for them!

Regards,
Clint

With regards to renting it out now or waiting for the “right time”, try this exercise;

1) Wait 2 months now, rent it out in January and then keep re-leasing every January.
RESULT: A definite 2 months of no rent.

2) Rent it out right now and then try to re-lease it next November. If you can, great. If you can’t, well just keep trying until the January period again.
RESULT: Possible 2 months of no rent. Possible 0 months of no rent.

All other things being equal, I’d go for the “possibility” of losing 2 months of rent rather than “definitely” losing it.

I think what Derek was getting at originally (and what I was in agreement with) was that if you are doing things that force you to go without rent for a while, try not to miss the Jan/Feb commencement of uni, otherwise it might stay vacant for another 6 months or a year (or the only applicants will be those people who get turfed out of their current places and are looking for somewhere else…. not the ideal tenant!).

I haven’t missed anything here have I guys?

Clint