TerryParticipant@talsarJoin Date: 2014Post Count: 7
Hi there every one
A little about myself
I am a trade qualified painter decorator, licensed/ trade qualified carpenter licensed builder
I had a bit of money so I built a very nice house for the sole purpose of on selling or the backup plan was to rent it out. it is purely an investment
Well, it did not sell, (right house wrong location, or the right location wrong house depending how one looks at it)
The reserve bank put up required deposits from 10 to 20 % effectively putting the brakes on the building industry
though they have softened and I believe on new housing only a 10% deposit is required
the very nice brand new house has a tenant (it is now 2nd hand) with a 3 year lease
property value $450.000 annual rent $20,800.00
it also holds all my cash effectively tying my hands
You see I initially began to look at cash positive house but was dismayed at the quality of past repairs, or no repairs & age etc, and thought (bright idea) I can build one cheaper, you know cause I know what I’m doing RIGHT, Ha Ha it turns out I should have got some one else to build it for me because they would have built a house and maybe I would have gone by the dollars, were as I built a very nice home
There are lessons here to learn and I’m prepared to keep my mouth shut & ears wide open
I don’t have to sell or do I
can it be sold discretely with a 3 year lease tenants will be there for life capital gains could be made in the next cycle
can it be swapped
all comments and thought and welcomeJacqui MiddletonParticipant@jacmJoin Date: 2009Post Count: 2,539
If the tenants are on a lease, then if the property is sold, the purchaser inherits the tenant and must abide by the lease. You cannot hide from a purchaser the fact that there is a tenant in place – this must be disclosed. If you sold the property quietly, the tenant would not necessarily know. All they would know about is things such as a change in property management, so if the purchaser was with the same property manager, the tenant would have no idea. However you must remember that a purchaser will probably need a loan to purchase the property, and it is likely that the lender will require a valuation be done and it is likely the valuer will need to go inside. So the tenant will realize “something” is happening.
A property cannot change ownership without triggering stamp duty, so there isn’t really such a thing as swapping without some kind of cost, unless you’re donating the property to a spouse under certain rules available in VIC.
What state is the property in? (ie vic/qld etc)
What is the current value of the property, and the current mortgage debt against it? Also is it on a fixed or variable rate? Is it a principal & interest loan or interest only? The answers to these questions will help us understand your holding costs, how long it will be before it’s paying for itself, whether a refinance might be viable to release some equity etc.
What is the reason you are looking to offload the asset? Is it costing you money, or did it just freak you out that when you tried to sell it there were no bites? Is there something else you need the money for, or are you simply itching to get out and buy more properties? Not sure what your objectives are so it would be helpful to understand a bit more about what you’re thinking and what is motivating you.superAndrewParticipant@superandrewJoin Date: 2014Post Count: 188Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
The RBA doesn’t dictate how much of a deposit is required to purchase a home – for a new property you can still get away with a 5% deposit.
The 3 year lease isn’t the end of the world either – some buyers may look favourably at this.
JamieTerryParticipant@talsarJoin Date: 2014Post Count: 7
Thanks for the replies
When I meant sell discreetly I meant quietly sell the property with out the signs and tramping feet of busy buyers and real estate agents
I made the mistake of doing the deal in my name
Borrowed 300k total cost to build 440k value 450k rent anualy is $20,800 or $400 per week rental manager 9% rates & insurance $2,500 per year
The house is in New Zealend so there is no stamp, it is a principle & interest loan
I did things the wrong way
I forgot my initial goal which was to buy positive cash properties
I don’t have to sell if I put in another 30k it will become positive, I can move it over to a company/trust which is already set up ( you can gift at present there is no limite ) and refinance
I think perhaps on reflection I am annoyed with myself
I have no sentiment towards the property, I must admit though it was a great build not having a client for 5 months I enjoyed going to work :-) and I would have like to continued, sold and built another but the big BUT, it’s back to the drawing board and start again
Maybe with the same plan or revised plan, licking my wounds but the cuts aren’t to deep
I apologies if it sounds a bit of a ramble but it is good to put it in writing,
- This reply was modified 5 years, 3 months ago by Terry.
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