Hi everyone
I would appreciate your comments on the following sell or revalue situation. Property is a 1 bedroom apartment, 6 years old, no renos required (would be a waste of money – so can't pull money out through a reno and reval…).
My reasons for looking to sell are:
- I feel I have lazy money in this deal. The property is positively geared after tax but this is only due to the loan being at 70% LVR and the age of the property.
- Rental market is stagnant – have a good tenant who is maintaining property well but a recent conversation with the PM is to not increase the rent as there are a lot of similar properties for rent at the moment.
- 1-br apartment with an increasing number of apartments coming online over the next little while (year – 2 years); north Canberra will be known as apartment city soon…
- I feel that this money can be better deployed in other markets (and parked in my PPOR offset account in the interim)
- Have a niggling feeling to sell – or is this my greed gland wanting to buy again….
-
Tossing up to sell now (6 months before election) or in March 2014 (6 months after election) – crystal ball anyone??
Reasons not to sell are:
- Always intended selling before June 2014; this has been sped up by the number of apartments coming online and that I feel I have lazy money in the deal. Tossing up whether to sell now or after the election hype has calmed down (although this may take longer than the 6 months I’ve given myself…)
- I would like a little more than the current asking prices for the area. There are currently five 1-br apartments for sale in the complex (larger complex)
- Currently have a good tenant, all is chugging along, is a set and forget property ….maybe I should learn to sit still…
All in all, my greed gland is wanting to buy again. My other IPs need a small reno before revaluing again, so this property is the one up for debate.
I am hesitant to reval this apartment to 90 or 95% as I’m just not sure what the Canberra market will do over the next little while (so I could still have a loan after selling if I revalue to a higher LVR loan and prices go south); the CBR market has been stagnant for a little while now.
I am looking to redeploy these funds into other properties/purchases that I feel have more movement, so selling will be on the cards at some time soon.
Appreciate your comments, have I missed anything?
Cheers
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Personally, I wouldn't want to be selling a unit in Canberra the moment. The market is inundated with stock – you'll be in competition with plenty of sellers.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Jamie
No I am not wanting to sell either. I'm just not feeling great about the Canberra apartment market at the moment with the number coming online…. There will be competition for quite a while…
Question is… do I cut my losses and run, or reval and hold (and hope??).
Would I consider a vendor finance or rent to buy….. I would have to look into that for the Canberra market…..
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Looks like we're communicating across a couple of forums
It's a tough one. Personally – if it were me, I'd reval and access equity rather than sell.
The timing for selling isn't right – and probably won't be for a few more years.
You've got decent tenants, it's not costing you anything to hold onto and it's relatively new so maintenance shouldn't be an issue.
The alternative is to place it on the market and see how it goes – if it doesn't sell for what you're expecting, then go down the reval and equity release path.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Jamie
Yes, we are talking across forums! Appreciate the brainstrusts for their comments!
I agree that the timing isn't good at all… you have hit the nail on the head about why I am continuing to hold it – good tenants, difficult market, depreciation…
I also like your comment about possibly placing it on the market and seeing how it goes. Just have to find out what the costs are if I go into the selling process but don't come out the other side. Of course, the other issue here is that I may lose my tenant in the sales process, then not sell… a few months without rental… then to find another tenant. mmmmm….
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Depending on the Contract you sign with the agent Chris you well find if they introduce a willing and able buyer and you refuse to sign the contract you maybe liable for an element of commission.
Just read the contract and see what the conditions are.
Personally i would not sell but access equity and go again.
Unless the asset is poorly performing i am not a fan of selling and moving on for selling sake.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
same here,
Personally I also wouldn't sell and make a note that you must go with the contract and the condition properly
ChrisA1 wrote:I also like your comment about possibly placing it on the market and seeing how it goes. Just have to find out what the costs are if I go into the selling process but don't come out the other side. Of course, the other issue here is that I may lose my tenant in the sales process, then not sell… a few months without rental… then to find another tenant. mmmmm….
No worries. The tenants lease will still need to be recognised by the new owners. If you're worried about losing good tenants, maybe ask the PM to let them what you're trying to do (ie. sell for a certain amount and if it doesn't – then you'll continue to rent it).
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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