Forums / Property Investing / Help Needed! / Can't sell a Cashflow Positive/Neutral Property – market slowdown?

Viewing 6 posts - 1 through 6 (of 6 total)
  • Greg Mayer
    Participant
    @greg-mayer
    Join Date: 2016
    Post Count: 2

    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.

    David Thiu
    Participant
    @david-thiu
    Join Date: 2017
    Post Count: 41

    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

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,213

    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

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,937

    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 | Helping investors pay down their debts thru a Mortgage Trust investment
    http://www.australiansecurecapital.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $26M. Ask me for a copy of my API Interview.

    Profile photo of Colin RiceColin Rice
    Participant
    @fms
    Join Date: 2011
    Post Count: 335

    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 Me

    Perth Based Mortgage Broker - Investment Property Finance Specialist | E: crice@cdrfinance.com.au

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 963

    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 Me

    Investment Focused Finance Strategist - servicing Australia-wide

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