Advice Needed – Sell or Rent

Ask the bankl for a rate reduction…they are actively competing at the moment.
Ask for a 'professional package…that will get you at least a 0.5% reduction.
You can turn a negatively geared property into a positively geared property with a little imagination.
This sounds like a perfect opportunity to use a rent to buy scheme where you rent the property to an end buyer.
You usually rent with an option to buy to a buyer that may not fully qualify for a standard bank loan at a figure above the standard market rate.
You can also get them to add value buy adding value to the property with their labour in an effort to increase the valuation of the property.
You can get them to put down a substancial non-refundable option fee (that ensures that they are serious) with an option to buy within a stated period of time (say 3 years) at a fixed price. The rent will be at a rate at say 1-2% above your mortgage rate.
You get the fee as an instant profit.
You also get the 1-2% (on the full selling price) as your profit.
Your mortage is fully paid out every month.
You also do not pay a REA $10,000 so that also stays in your pocket.
They get the option to purchase a home at a stated price sometime in the next 3 years.
They are looking to have the property increase in value above the agreed selling price; this will allow them to use that as their 'sweat' equity, as part of their deposit. They doo all the work, providing expensive labour (themselves, family, friends doing all the heavy lifting). Have 3 quotes done for each of the jobs needed doing and ask the a valuer to value the property 'on completion' of the renovations/improvements. Focus on adding value in the kitchen and bathrooms and adding living spaces in the back yard (pation, pagola etc).
The banks are looking for at least 10% in equity and at least 12 months of regular/on time rental payments.  If they are able to pay above the current bank interest rate for at least 12 months, the bank should provide a loan, especially if the value of the property has climbed above the selling price, adding to their equity/banks security level. 
Remember, you do not sell a 'home' on price, you need to sell on emotions.
Dress the house to look like a home, show the potential as a family home.

Why did the agent get any fee when the property did not sell; they only get a commission on a sale not of a 'nice try'?
And $2,000 sounds like a lot for advertising for just 2 months….RE.com usually charges less than $400/mth for an add and the REA gets a LARGE discount on that price.

Hi Sam,

This is a very common problem. I had the same problems with a property i had in Melbourne. I worked in real estate and last year i started to notice the market really slowing down so i sold and just broke even.
There are alot of homes out there on the market and alot of homes out there to be rented. What can you do!!

1) Take your home of the market for one month – You have to make a firm descion on your either going to sell it or rent it.
2) Doing both will confuse any buyers out there
3) Go with a new agent and cut your losses. In life we make and we loose money but more importantly its the lessons we learn from it.

Im in the same boat again with a bussiness we own. My wife runs the shop and we have it on the market there is plenty of buyers out there but not much banks willing to lend.

The market place is going through a tuff time but stick to your guns for some reason in Australia we tend to worry about Money to much. We loose focus on everyhthing else.

Worry more about learning and results will come.

If you need anything please PM me.

Cheers

PS: Definitely, find yourself another agent… 

Two mistakes you are graduating to and both are fixable.

You are moving WITH the crowd and not against it. You've found it hard to sell .. and so has everyone else .. because .. there arent the buyers out there now. You've moved with everyone else. Thats a recipie for trouble.

So you follow it through with sticking the property on the market. At the same time as everyone else (see above) who didnt manage to put their property on the market. And guess what? In a market glut .. your property price may not be matching market.

Its going to be a series of tough times coming up. Not getting people in at $380? Put the property up on the market. Allow the tenant to make offers on the property for rent. GET SOMEONE IN TO PAY YOUR BILLS. Thats what you need.

Rethink your 380. You dont need to make your place the cheapest on the block. You need to get someone in. And once they are in and happy THEN you can raise rents on them gradually. But you need to make your investment work. And doing extra shifts for a house you cant sell .. its a burden around your neck. And thats not what property is about.
 
Forget your sales efforts .. if there arent any buyers you are pissing ad money into the bin. And getting the agent to lower the property price on you. So you'll end up frustrated .. selling your property short .. and hating your real estate agent in the same breath. Which is not a good recipe for continued property investment.

In the property clock .. we are hitting the DOWN cycle. Its ok .. it doesnt last forever. But it means for a brief period .. people will have no money to flash around. Thats going to affect house prices and rental prices (rents not so much). But it does mean you want to secure tenancies on 12 month leases NOW while there is still some money floating around.

I read this thread, because I am in a very similar situation.
My property is in the market for 4-5 weeks and has only one offer, an offer that's 10% lower than our break-even number.

It's easy to say "cut the loss short and move on" while you're not in that situation…
For us, we're going through so much paid making a decision on wether or not we should take the offer and recoganise the loss.

And yet sometimes you have to to realise and sell. Either you cant make the payments .. the property is becoming a liability or is headed to becoming an expense … the property boosts your land tax scenario enough that it makes the rest of the portfolio unviable.

The answer to the question lies in the wait period. At this stage for the property to turn around into an upwards movement again will take betweeen 4 to 8 years. At most of that period its going to sit flat .. not going much anywhere. Its a period where you may find it easier to take the money elsewhere. Ride it out and you'll be ahead. As long as your judgement call for the purchase was sound in the first place .. you should be able to realise something like profiit at the end of this period.

We reached the stage about 3 years ago where every nut who could pick up a hammer thought he could make his fortune in doing up a property. Thats been curtailed .. but for the right reasons.

In a hot market .. people will pick ANYTHING. Good .. bad or ugly. In a market that is being reassessed .. the properties that were good to start with will prevail. Whether its position .. opportunity .. location .. they'll stand out from the pack. Because they had the right qualities to start with.

Joahnn,
If you fall off the ladder painting a room you normally clean up.
That is where we find out pundit.

It appears as though our esteemed college has other motivations for needing to sell.
The gent is trying to look after his family.

Perhaps this means, you may need to clean up first before climibing that property ladder.

I can't tell you what to do, but when our situation was similar, we chose not to have our PPoR as our largest investment, in fact it was only the 3rd. Perhaps you may consider a similar strategy, I know it isn't as glamorous, but I also value my family.