Hi All,
I am attempting to sell my first investment property and have encountered a small conundrum – I have had very little interest from the market.
I don’t believe that I am asking too much for the property, with the current ad for ‘Offers over $299,000’.
I think would be a very attractive property to astute investors (or even a first home buyer) with good gross rental yield at between 5.2 – 5.5% depending on the eventual sale price I achieve.
The tenant is willing to re-sign for another 12 month lease at $340/week, but as I indicated on the last renewal that I may be looking to sell, we elected to go with a week-to-week arrangement.
I have held the property for about 3 years as an investment, having been my PPR for 5 years prior to that.
I honestly thought that with the high-turnover for properties in the area (Slacks Creek, QLD; average days on market ~20 days), that this would be a relatively easy process but have been proven wrong as my agent has had only a handful of potential buyers through the property, and only one low-ball offer made (which I rejected as it was ~$50k below asking price).
The property is in very good condition, having been renovated by the previous owner and has proven very low maintenance for the past 3 years I have held as an investment.
Given it is pretty much cashflow neutral (and provides a nice Tax refund after capital allowances/depreciation) it has been great to hold it while saving money for a bigger family home – now I need to unlock the equity however to put towards this new purchase and I am required to sell.
Would any of the longer-term members of the community be able to help/assist with any tips on what I am doing wrong, or what I could improve to attract more buyers?
My agent has suggested purchasing an upgraded advertising package for RealEstate.com.au and/or Domain in order to highlight and get more interest but I would prefer to leave this until after I hear feedback from the experts in this community. A link to the property is below:
https://www.realestate.com.au/property-house-qld-slacks+creek-126091594
Any/all feedback would be appreciated.
Thanks in advance,
Greg.
Hi Greg,
Have you thought about ‘Staging’ the property to maximise the perceived value?
Or maybe offering ‘Vendor Financing’ for +20% of the purchase price?
Just my two cents…
David
Hi Greg,
I honestly thought that with the high-turnover for properties in the area (Slacks Creek, QLD; average days on market ~20 days), that this would be a relatively easy process but have been proven wrong as my agent has had only a handful of potential buyers through the property, and only one low-ball offer made (which I rejected as it was ~$50k below asking price).
The high turnover, on a property with good rent return, asking below median, and yet only a handful of buyers – has me wondering if you need to get another RE agent? Or are there other (hidden) negatives – like the location – you don’t have bikies living alongside do you? :p
Who is your market? If selling to a new home-owner, maybe having it tenanted “turns them off”? Ask your RE agent about that. Of course, if an investor is your target market, then expect to have some lowball offers thrown your way.
Just a few Kms away, there is a HOST of development going on. Perhaps new homeowners are now looking for a new house to get the FHOG? I think that change got made, but I’m not sure – I heard about it being proposed several months ago….. ???
If so, then an investor is your likely target market – or maybe (as you mentioned) offering VF would help a young couple get into their own home. But then YOU are funding them, and face a possible capital loss if they don’t work out…. much due diligence needed on that one.
Benny
Maybe look at switching agents.
Purple bricks might offer a fixed price but are they getting the same exposure as another agent would do.
Regretfully you bought the property at the peak of the market just post GFC so maybe you might need to sharpen the price.
As Benny has mentioned there is a stack of new development going on in the area and you can buy a nice brick home for much the same price with full depreciation and capital allowance claims.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I don’t believe that I am asking too much for the property, with the current ad for ‘Offers over $299,000’.
Its normally always the price but as mentioned could have a dud agent as well.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Interesting to see the advert was pulled – what did you end up deciding to do OP?
I wouldn’t say Slacks Creek is a market I would necessarily call slow at the moment – Logan and surrounds has shown to be a fairly consistent market at the moment.
Everything comes down to presentation, price and the professional involved. Yield isn’t important – there are 10% yield properties which won’t ever sell and 2% yield properties which sell before hitting the market. It’s all about comparing your property to others and seeing where it is in line with the market.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thanks for the tips David. Unfortunately with a tenant in the property, it would be difficult to go down the path of staging – and from what I have heard, this can be quite an expensive exercise for a property of this value. Vendor finance – not really an option for me as there is already a financier (bank) that I will be required to pay off in a sale event, and I am looking to reinvest any profit made from this property into other things.
Hi Benny – again, thanks for the feedback.
– No, there aren’t bikies living next door and the street is nice and quiet.
– The tenant is on a month-to-month agreement so very easy for a potential owner-occupier to ask for a vacant premises upon possession.
– Thanks for the advise re: investors and low-ball offers. I would have possibly considered some if they were within 5-10% of the asking price :)
– FHOG – yes, this may be putting a dent in the potential buyers
– (as mentioned in my reply to David) I’d rather not go down the VF path, and aside from the reasons already mentioned, that would be entirely new territory for me. I don’t think I’d be willing to take the credit risk to tell you the truth.
Interesting to see the advert was pulled – what did you end up deciding to do OP?
I wouldn’t say Slacks Creek is a market I would necessarily call slow at the moment – Logan and surrounds has shown to be a fairly consistent market at the moment.
Everything comes down to presentation, price and the professional involved. Yield isn’t important – there are 10% yield properties which won’t ever sell and 2% yield properties which sell before hitting the market. It’s all about comparing your property to others and seeing where it is in line with the market.Thanks Corey – I ended up pulling the property from Purple Bricks and re-listing with one of the more successful REA’s in the area who has a proven history of sales.
New Ad is up now but I’m sure you’ll all be able to find if you go looking.
Thanks for the tips re: yield also. As I’m still fairly new to the scene, it’s a lesson learned on what to look for and how to market a property for all audiences.
Also lesson learned re: paying a ‘commission’ upfront, giving the REA no actual incentive to sell the property – watch this space as I’ll update if/when the property sells (and for what price). Fingers crossed.
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