Join Australia's most dynamic and respected property investment community

Am I being rational?

Discussion in 'The Buying & Selling Process' started by Rockstar, 23rd Jul, 2015.

  1. Rockstar

    Rockstar Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    127
    Location:
    NSW
    Ok here is the scenario.
    Just completing a duplex. Selling House 1 and Mrs R and I are moving into H2. We have had a couple of agents showing some buyers but haven't formally launched a marketing campaign yet.
    We have just received a full price cash offer (based on agent's appraisal) from an investor. We are happy with the money but suddenly feel apprehensive about living next door to a tenanted property. This apprehension extends to the fact that we might sell our home and move on within a couple of yrs so would a tenanted duplex next to our home make it harder to sell or devalue our home?
    The house we are selling is near completion and the market is pretty strong. Registration of title will take another 10 - 12 wks so we can't settle until then but we have had owner occupiers move in under licence in the past and they pay us a nominal rent until settlement which covers our holding costs until settlement.
    We've decided to hold off accepting the offer since we have two owner occupiers wanting to inspect tomorrow and Saturday.

    Take the money or wait for an owner occupier?

    Your considered thoughts would be appreciated.
     
  2. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    902
    Location:
    Perth, WA
    I wouldn't have thought a tenanted property would have any adverse affect on surrounding properties. In a normal scenario anyway.
     
  3. Random Username

    Random Username Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    239
    Location:
    NSW
    Wouldn't be the first time an owner occupier has moved and then rented the existing house.

    Maybe some sort of covenant on the title to restrict it's use if it worries you too much?
     
  4. OC1

    OC1 Well-Known Member

    Joined:
    6th Jul, 2015
    Posts:
    212
    Location:
    Melbourne
    Mate, take the money. You have no control over who lives next door. No point focussing on things out of our control.
     
    Last edited: 23rd Jul, 2015
    pianissimo, Peter L, Kael and 3 others like this.
  5. Perp

    Perp Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    455
    Location:
    Brisbane
    I'm with others. It can easily change from owner-occupied to tenanted and back again later, anyway. Once you sell it, it's outside your control.
     
  6. Kinnon Bell

    Kinnon Bell Finance Broker

    Joined:
    14th Jun, 2015
    Posts:
    477
    Location:
    Cairns
    No, I don't think you're being rational. Crappy neighbours come in the OO and renter form.

    You're also not planning on being there for the long term either so if you do have less than favourable neighbours it won't be forever.

    Also, FWIW, when PPOR shopping whether my neighbours are OO or renters never was a consideration.
     
  7. KDP

    KDP Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    246
    Location:
    Singapore
    The OO could turn out to be horrible as well and the tenant lovely neighbours. Just take the cash.
     
    wylie likes this.
  8. Perthguy

    Perthguy Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    4,745
    Location:
    Perth
    Where I live in Perth we have had some really nice renters next door and on the other side, a really lovely OO. The property out the back has had a mix of weird OOs and nasty tenants. Oh, and one of the tenants next door hacked our wifi and blew our internet cap 2 months in a row.

    Anyway, it makes no difference in people are renters or OOs. Some will be lovely and some will be jerks. IMO it makes no difference to the value of a property.
     
  9. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,456
    Location:
    Perth, Melbourne, USA
    I sold my 3 villas in Spearwood deadbeat neighbour, OO had 4 dead cars parked on front lawn, eyesore, it did not put people from buying

    MTR
     
    Last edited: 23rd Jul, 2015
  10. Rockstar

    Rockstar Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    127
    Location:
    NSW
    Thanks for the great responses. I realise that OO's can be more of a problem than tenants. In this case we are meeting every OO purchaser to discuss finishing touches to the build so have the opportunity to check out who they are and vice versa. There are two more inspections - tomorrow and Saturday. Both are single ladies who are cashed up and genuine buyers. If they don't express any immediate interest in the house I will accept the offer from the investors who seem happy to wait in the wings at this stage. If the investors pull out I will still have 10 - 12 weeks to market the property in a finished state. We are in a rising market so we shouldn't have a problem selling. Supply is low and demand is high. Our place is one of the only brand new homes in the town and will sell around the appraised price.
    Grateful for your advice. Will let you know how it winds up. :)
     
  11. Perthguy

    Perthguy Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    4,745
    Location:
    Perth
    Perfect! :)
     
    MTR likes this.
  12. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,456
    Location:
    Perth, Melbourne, USA
    Absolutely
     
  13. Esh

    Esh Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    192
    Location:
    Sydney NSW
    I think you should put the property on the market get more buyers in!!!!!!!!!!!!!!! How do you know that this is the best offer you are getting? yes it may sound good, but you wouldn’t know if you are ripping yourself off or not. I really recommend putting it on the market. If you spend $2k-$3k on marketing and end up getting $10k,20k,30k,40k more in your pocket, would you be happy? Tenanted or not, it doesn’t affect the price. Sorry I’m an agent and I just see so many people sell their property before it hits the market and yes they get amazing prices but its not the best they can get.
     
  14. Rockstar

    Rockstar Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    127
    Location:
    NSW
    Thanks Esh but I know the market well being a local developer for a number of yrs. Definitely it is a good offer that I would normally jump at but my apprehension was whether I should be more selective about the purchaser since it will be 2 - 3 months before any settlement can occur due to approval and registration of strata title.
    Anyway we had our inspection and it seems the property is not suitable for the new people so now it is back to the investors to see if their offer still stands. If so we will take it. If not we will openly market the house to the public.
     
    Esh likes this.
  15. Esh

    Esh Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    192
    Location:
    Sydney NSW
    Hey Rockstar,
    Ofcourse I totally understand. Imagine, if those buyers came through and they had to compete with 10 other groups. There is a good chance, their offer could come higher, even by 5-10k. Every $ counts. Emotions and competition is the best negotiator in this market. Wish you all the best, I know you know what you are doing just wanted to add my 2 cents. Be keen to know what you sell for :)
     
  16. DanW

    DanW Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    400
    Location:
    Sydney
    I'm a tenant, what's wrong with tenants :(

    Alot of tenants may be better neighbours than owner occupiers..

    Depends on the area, demographics, and age etc

    In the end, get the best price for your sale is what's important.
     
    pianissimo, Esh and Perp like this.
  17. legallyblonde

    legallyblonde Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    685
    Location:
    TAS
    I think you are over thinking it!
     
  18. Rockstar

    Rockstar Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    127
    Location:
    NSW
    Yeah I know blondie. I was smitten down with emotional seller syndrome. Not very normal for me.:D
    I haven't told the full story of why this occurred. At the time I received the offer from the investors we had a single lady owner occupier inspecting the property. She was also cashed and really liked the property. She seemed like the ideal neighbour - working lady in her 50's (school teacher) and we could see she would be house proud. She'd just sold her home in Lismore and was moving over to the coast. I probably got attached to having an ideal neighbour so became prejudiced against having tenants next door despite knowing fully well that most tenants are good people. She returned the following day but decided to persue another property that was within walking distance to her grandkids. (incedently it was a previous duplex we had built) :)
    I realise I lost some rationality thinking I could possibly attract another buyer like her and therefore began this thread to consult you all who are in a more objective position.
    Anyway I couldn't contact the agent today so will wait until Monday to resume negotiations with the investors if they are still keen. The agent did indicate last week that they were willing to wait in the wings for a few days.
     
    Esh likes this.
  19. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,382
    Location:
    Somewhere in the land of Oz
    I'm just here for the poll... And there isn't one :(
     
    Esh and Kael like this.
  20. Rockstar

    Rockstar Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    127
    Location:
    NSW
    No go with the owner occupier inpections and the investors have gone off and bought another property very quickly! So we are now revising our position. This began with a new sales appraisal from another agent that has just come in at a bit above the 450k with a suggested listing price of 465k.
    I am focusing on finalising the landscaping prior to advertising. There is a little more work to be finalised such as planting and mulching, touch up painting and oiling, clothesline area, letterbox and pressure cleaning driveways.
    Final council inspection is booked for Friday afternoon. Once this is done we can lodge our strata subdivision application to council for approval.