3 years ago I bought a block of land in Tailem Bend, South Australia. This being a 1000 sq metre block in the middle of the town. I built two small houses on this block during April 6 2005 to December 15 2005. These are now sub-divided as two separate titles. I rented the first unit out in January 2006 (tenant moved out October 2006 with rental being $180 per week). This unit has had no tenant for last two months now. I rented the second unit out for last 6 months at $165 per week. Demand is not as good as I would like for rental. Tailem Bend is gradually developing. This year the council have put in kerbing and concrete pathways and resealed the road. So far each dwelling has cost about $120,000 each all up. I could spend more on extra fencing etc if I wish. How do you view my property investment? Do you think I should hold or sell at this point in time? I have a full time job so I can carry this expense for a while. I have just had an appraisal at around $150,000-$170,000 for each unit. There are no similar dwellings to compare in Tailem Bend so Elders have gone on values in Murray Bridge, the main regional town about 20 kms away (towards Adelaide).
These situations are always difficult to give an answer for. What are your goals for your investing?
Do you sell now and make a small profit, or do you keep and continue forking out cash every week in the hope of some cap growth? Everyone has a different view on this situation.
The long term view may be to hold on to them and wait for cap growth and improved conditions for renters.
The short term view may be to sell, take a profit and move on.
If you think that the tenant problem looks like continuing for some time, it may be better to sell if you can realise a profit, and put the money to use somewhere else.Personally, I don’t want to be a slave to a neg geared property in the hope it may go up in value. I want the cashflow now and take the growth if and when it happens.
I try to buy in an area that has good rent demand, good amenities and some good signs of future growth. Then I have few more bases covered.Cheers,
Marc.
[email protected]Interesting! I am just starting the same project in Bordertown. Bought land, subdividing and putting up 2 transportables. My aim is to sell, with rental as a 2nd option.
Why wouldn’t you sell and take the profit, giving yourself opportunities to continue investing?
all the best!
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