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Advice on investment property purchase sold with untrue rental income

Discussion in 'The Buying & Selling Process' started by Drfunk, 13th Sep, 2016.

  1. Drfunk

    Drfunk New Member

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    13th Sep, 2016
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    Hi peeps

    I just signed a contract on an investment property. I was told (and property was advertised as) that "...currently brings in ... rental income over $130,000 per annum. "

    Income is not over $130k, highest ever per annum is $115k. It has never had an income close to that figure.

    My contract is subject to finance, the subject to finance clause expires this friday.

    I don't know how big of a deal to make of this. I want to buy the property still, but I think this is BS false advertising. I would perhaps like a price reduction or some other extra in lieu of this.

    Given how horrible it has been to deal with the vendor I very much doubt he would do anything without lawyers involved. I'm not sure I can be bothered going down that path.

    What do others think? Suck it up? Crack a big stink?
     
  2. ellejay

    ellejay Well-Known Member

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    Wouldn't you normally ask for evidence of rental income prior to purchase?
     
  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    They lied about the income in their advertising but you've picked it up and are still considering purchasing the property. The false advertising is probably an issue for fair trading or similar. You've probably got grounds to exit the contract, tell them you won't report them if they let you walk and amend their advertising campaign. The question of should you exit the contract, is a financial decision. Does the deal still stack up on the reduced rent?
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You have the opportunity to terminate the contract - need to decide.
     
  5. DareDevil

    DareDevil Active Member

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    Is this a commercial property, might i ask? how come anything residential generate 130k income per year
     
  6. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    Perthguy likes this.
  7. Big Will

    Big Will Well-Known Member

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    Perthguy and Brady like this.