So I purchased an investment property and got finance the day before attending Steve’s 2 day conference in Sydney. We are due to settle next week 1st October and whilst it is a good deal, I reckon I’ve learned that I actually could invest this money elsewhere for a better return.
But our contract is unconditional…
I am actually happy to go through with it, improve it and sell it in the near future but I thought I would ask the question anyway. Does anyone know what is involved in ceasing an unconditional contract? What grounds might we have to do so? What do we risk losing if we do so (just our deposit or more)? Has anyone gone through a cancelled sale before as a buyer/seller?
Keen to read your insights! thanksTerrywParticipant@terrywJoin Date: 2001Post Count: 16,213
There are many grounds under which you could pull out. The contract may be defective for example or a condition may not be complied with. Seek legal advice.Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
I’m not a solicitor but pulling out of an unconditional contract generally results in you forfeiting a deposit plus possibly paying some form of compensation to the vendors.
What makes you think you’ve made a bad purchase?
It’s not a bad purchase. It’s just not a brilliant purchase. Attending Steve’s seminar gave me a bit more clarity, confidence and strategy that I had been lacking. So now I think I probably could negotiate a better deal elsewhere.. Plus I think I am just getting pre purchase nerves!
In hindsight the Agent/Sellers have bullied a bit in regards to scratching off some of our conditions before agreeing to the contract. So we have agreed to purchase this property without contractual access/ability to secure a tenant before settlement. It’s just a slight aggravation… and an indication I need to sharpen my negotiation skills!BennyModerator@bennyJoin Date: 2002Post Count: 1,416
I am sure the learning that has already happened will pay back dividends as you go on. Good to hear that this is not a bad purchase…. Just one comment of yours has me scratching my head a bit :-
I am actually happy to go through with it, improve it and sell it in the near future
It might all come down to your definition of “near future” – but my thoughts went like this :-
1. You are wanting to get in a tenant – OK
2. But you are also wanting to “do it up” (improve it) and sell again soon.
Based on those two, why would you not renovate it first, THEN put a tenant in at a HIGHER rent, keep it for a year to cut any CGT in half, and then sell it? Just a thought !!
Thanks for your suggestion Benny, I am tenanting it for now. I intend to renovate it immediately before sale so I can sell it whilst it is vacant. Selling it straight after renovation will help me cash in on the reno value as soon as possible and sink it in to my next project.Ryan_vsParticipant@ryan_vsJoin Date: 2012Post Count: 11
Hi Azalia, just a thought, if you renovated NOW before the tenant moves in you will be able to claim depreciation on those renovations, likely improving your cash flow during the period you own the property. As Benny mentioned, you would also likely benefit from higher rent.
The timing may not be right for you, but it may be something to consider if it can be done.BuyersAgentParticipant@knightmJoin Date: 2005Post Count: 338
Hi Azalia, just a thought, if you renovated NOW before the tenant moves in you will be able to claim depreciation on those renovations, likely improving your cash flow during the period you own the property. As Benny mentioned, you would also likely benefit from higher rent.The timing may not be right for you, but it may be something to consider if it can be done.
agreed this will be preferable if holding for medium to longer term, but if the goal is a 1yr turnaround with reno for maximum resale I would say putting a tenant in takes the “gloss” off the renovation and makes it less appealing at sale time. If holding for longer for sure do the work sooner and improve rent and tax.