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  • Profile photo of 111111111111
    Participant
    @111111
    Join Date: 2003
    Post Count: 29

    I am purchasing a IP (4 BR, Brick veneer, 8 yr old) in Wellington Point, QLD.

    The building report is not that bad apart from high moisture in ensuite
    (due to the leakage in shower base).

    The Pest report is a bit of concern.
    (a) live termites were not found. (This is a good sign)

    (b) termite damage and/or workings was found at varous trees/stumps. an invasive inspection is strongly recommended.

    (c) A durable sticker/sign (ie. evidence of a possible previous treatment) was located in the meter box.
    (d) termite treatment recommendation: a management program in accod with AS 3660 against subterranean termites is considered to be essential.
    (e) No evidence of a previuos barrier system within last 5 years. (recommend installing chemical barrier)

    (f) Timer rot : Fungi decay – Minor to various fence timbers, to various skirting and architrave timber at main toilet doorway

    (g) degree of risk od subterranean termite infesation to the overall prop is moderate to high

    (h) high moisture readings to walls surrounding ensuite and my attract termites. the leakage in shower should be investigated and repaired.

    (i) It is strongly recomended that a full inspection and report be carried out every 6 months

    The agent says “Termite problem is usual in QLD but this is not a serious matter”

    The contract is subject to finance and buliding/pest insepection
    Should I get out of the deal ?
    I have to make a decision by Wed.

    Please help. Thanks

    Profile photo of tom1000000tom1000000
    Participant
    @tom1000000
    Join Date: 2003
    Post Count: 74

    If everything else is really good (my criteria are location, tenant, rental return), then I would negotiate a lower purchase price.

    Any experts out there who can suggest how much the purchase price should be reduced?

    Profile photo of wilandelwilandel
    Member
    @wilandel
    Join Date: 2003
    Post Count: 761

    Hi 111111,

    It’s a bit difficult to judge when you don’t know all the details, as tom100000 said. Is it pos. or neg. geared? How long has it been on the market? Is it a bargain as it is, or does it just pass the criteria?

    I’d DEFINATELY use it as leverage to reduce the price, and say you’re prepared to walk.

    I guess in the end, I would go with my gut feeling, but definately factor in to your YEARLY budget, that treatment / inspections may be required.

    Do the numbers stack up after this?

    Don’t be afraid to get out of the deal if that’s what your head is telling you.
    I cancelled a deal recently, and felt really disappointed and bad, but THE NEXT DAY I found a MUCH better deal.

    Good luck,
    Del

    Profile photo of 111111111111
    Participant
    @111111
    Join Date: 2003
    Post Count: 29

    Thanks very much wilandel and tom1000000

    I really appreciated all your advices.

    Actually , the property is currently tennated and will be -ve geared.

    Asking Price : $300K (been on the market for 8 weeks)
    The agent said “since tennated and leased until Jan 2004, it is difficult to sell it to owner occupiers”

    I offered : $265K
    Owner said : $275K

    I offered again : $267K
    Owner said : $270K and all mine
    I agreed : $270K

    Land : 700 sqm (Level Block)

    House : Brick Veneer (4BR, Main BR has ensuite and WIR,
    other rooms has BIRs, 2nd toilet and 2nd Bath Room
    Double Locked up Garage)
    170 sqm floor area

    Age : 7 years and 8 months, only 1 owner

    Area : Leafy street and quiet, Cul-de-sac, mins drive to the bay and schools and shops

    Lease : 230 $/week, owner did not increase the rent since it is good tennants.
    if re-rented, 250$/week can be achieved.

    I can not find any 4Br Brick Veneer house in Wellington Point for that price.
    Even 3BR Brick veneer houses in the same and similar conditions and area
    are selling for 270K – 310K range.

    Any more advices please ?

    Thanks

    Profile photo of hwd007hwd007
    Member
    @hwd007
    Join Date: 2002
    Post Count: 247

    I expect you will loose much money on this. have you done the numbers ? Off the op of my head, I expect it could cost you at least $100 per week out of pocket. Not to mention the termites and rot. 6 month inpections worry me. The seller is smart. Plant and equip have been fully depreciated. Property growth has been strong and may level. Work needs doing. Good time to sell re-cash and re-invest in somthing new.

    Profile photo of IcemanIceman
    Member
    @iceman
    Join Date: 2002
    Post Count: 2

    Gday 111111,

    I agree with HWD007 on this one. I dont know if it will cost you $100 per week, however the costs will certainly run into the 000’s and on a personal note, if I was told that inspections were required biannually, I would certainly walk away ( hope this doesnt cause more confusion for you, just offering what I think is sound advice).

    I noted your comment:

    Even 3BR Brick veneer houses in the same and similar conditions and area
    are selling for 270K – 310K range.

    While this may be true, have you asked yourself while then is a 4Br being offered at such a price. Possibly because the vendor is aware that the significant costs will need to be incurred to maintain the property in a reasonable condition.

    It can often take months and months and some time years to find a suitable property that is consistent with your profile and criteria. All I can suggest is give this one considerable thought and if you have even the slightest doubt please walk away and keep looking. There are plenty more bargains out there where you do not have to worry everynight when you go to sleep whether hidden problems may begin to appear. Do not be sucked in by the thought of being offered a four BR house for the price of three. There is obviously a reason (most of time). Hope this helps.

    Regards

    Craig[8D]

    Profile photo of 111111111111
    Participant
    @111111
    Join Date: 2003
    Post Count: 29

    Thanks a lot everyone.

    I just spoke to the pest inspector.

    He said that in QLD, termites are every where. If he finds live termites, he classfies the risk
    of termite attach as high (as opposed to moderate and moderate to high). Most of the houses
    (more than 50%) will be in moderate to high category.

    Houses less than 3 yrs old will be in moderate category.
    Houses between 3 and 20 yrs old will be in moderate to high category.
    He also said most old houses (> 20 years old) wii be in moderate to high category.

    He strongly recommended installing chemical barriers to the property.

    Is he abit biased or not ? I don’ know

    Any suggestion ?

    Profile photo of 111111111111
    Participant
    @111111
    Join Date: 2003
    Post Count: 29

    Sorry
    correction

    He also said most old houses (> 20 years old) will be in high category.

    Profile photo of kooringalkooringal
    Member
    @kooringal
    Join Date: 2003
    Post Count: 31

    [
    Hi there, I love Wellie Pt but I don’t like the sound of that house at all. Did you buy or let it go or are you still negotiating? GO LOW!

    It is true termites are ‘everywhere’ in Qld, but NOT in the structure of brick houses you pay $270,000 for and rent at a loss.

    NO NO NO

    Don’t listen to the pest inspector. He wants you to spend $2500 on termite treatment.

    WALK

    We just bought a 60 year old house and it has NO SIGNS of termites and other house in the street have had them and this house is TIMBER.

    Queenslanders are VERY scared to buy anything with even a HINT of termite about it – so if you are dead set keen on buying this house, offer $200,000 – but I don’t know if I’d take it, even for that!

    IT will NOT be an easy house to sell, I don’t reckon.

    My two cents worth.

    Good Luck, Kooringal.

    quote]
    Thanks a lot everyone.

    I just spoke to the pest inspector.

    He said that in QLD, termites are every where. If he finds live termites, he classfies the risk
    of termite attach as high (as opposed to moderate and moderate to high). Most of the houses
    (more than 50%) will be in moderate to high category.

    Houses less than 3 yrs old will be in moderate category.
    Houses between 3 and 20 yrs old will be in moderate to high category.
    He also said most old houses (> 20 years old) wii be in moderate to high category.

    He strongly recommended installing chemical barriers to the property.

    Is he abit biased or not ? I don’ know

    Any suggestion ?
    [/quote]

    Profile photo of scottscott
    Member
    @scott
    Join Date: 2003
    Post Count: 110

    Hi 6×1,
    If you can find a house greater than 3 years old in QLD without termite activity around it your doing well! The fact that there was no evidence of activity in the house is a good sign!
    A recommendation for an invasive inspection guards the inspector against possible littigation in the case of an undetectable infestation. It also provides you with peace of mind![8D]
    Don’t let these little buggers dissuade you from a good deal. Just do your usual due dilligence to make sure they haven’t eaten the place out.
    hwd007, recommendations for 6 monthly termite inspections are common in coastal QLD.

    Hope this reassures you,

    Scott S

    P.S Wellington point will see huge cap gains in my opinion![:D]

    “Aim for the stars and you’ll shoot the top of the telegraph pole. Aim for the top of the telegraph pole and you’ll shoot yourself in the foot!”
    -anon

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