Leasing a double storey house on 700sqm of land

Discussion in 'Property Management' started by SuperWoman, 5th Nov, 2019.

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  1. SuperWoman

    SuperWoman Well-Known Member

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    Hi All,

    Just wondering whether it is a great idea to lease a large double storey house with almost 700sqm of land?

    Or the maintenance is just too high and its better to sell the house to avoid such headaches?

    Trying to see the pros and cons of holding on to a PPOR and turning it into an IP.

    Property in the growth corridor.

    Cheers!
     
    SuperWoman, 5th Nov, 2019
    #1
  2. Sackie

    Sackie Well-Known Member

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    If the fundimentals of the area are good, and holding the property doesn't hinder you moving forward with your goals, then I'd probably hold onto it.
     
    Sackie, 5th Nov, 2019
    #2
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  3. Trainee

    Trainee Well-Known Member

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    Part of the consideration might be looking at how your loan is structured.
     
    Trainee, 5th Nov, 2019
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  4. The Y-man

    The Y-man Moderator Staff Member

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    Depends on location and accessibility to CBD and or local employment.

    I have several houses with big yards, and they can be a drawcard for people with big dogs, or tradies with big toys/trailers.

    Tenants have been fine other than struggling a bit to keep the yard under control.

    The Y-man
     
    The Y-man, 5th Nov, 2019
    #4
  5. SuperWoman

    SuperWoman Well-Known Member

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    Thank you for this, can you please expand on this?
     
    SuperWoman, 5th Nov, 2019
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  6. The Y-man

    The Y-man Moderator Staff Member

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    If you need to access any equity in the PPOR to buy your new home etc, you can't claim that portion of interest as a tax deductible expense.

    The Y-man
     
    The Y-man, 5th Nov, 2019
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  7. SuperWoman

    SuperWoman Well-Known Member

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    Biggest worry is on the size of the house and any potential costs if the tennats end up not maintaining it well.
    What sort of things can i do to mitigate that risk?....
     
    SuperWoman, 5th Nov, 2019
    #7
  8. Sackie

    Sackie Well-Known Member

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    Comprehensive landlord insurance. A decent PM company.

    Besides things breaking every now and again, it shouldn't be too much of a drama. I have multiple places on more than 900sqm lots and no major dramas so far. Always important to have a buffer for repairs. Need to run your portfolio as a business, because that's what it is.
     
    Sackie, 5th Nov, 2019
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  9. ToeKnee

    ToeKnee Active Member

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    Do you need to free up capital?
    Would it be positive/negative geared?
    Can you include garden care as part of the rental cost?
    Is having an IP apart of your longer term planning?
    What sort of growth would do you expect?

    If you can afford to keep the property and it’s in an area with good growth personally I would be looking to keep it.
     
    ToeKnee, 5th Nov, 2019
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  10. The Y-man

    The Y-man Moderator Staff Member

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    At the end of the day you are potentially going to have a family with many kids or multiple tenants - as per @Sackie good LL insurance and building insurance is about all you can do.

    If it is nicely done up and it is not "rent ready" (ready for a bit of accelerated wear and tear), it may be a better idea to sell.

    Tenants are only obliged to keep it reasonably clean (vacuum and dump bleach in bathroom and toilet, mow the lawn. Note: flower beds/trees are "not in the lease").

    The Y-man
     
    The Y-man, 5th Nov, 2019
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  11. Codie

    Codie Well-Known Member

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    I would personally consider where the property is located as number 1 before you turn it into an IP. I’m just assuming here, but You mention it is in a “growth corridor” which often means the likes of northern Gold Coast, far west Melbourne etc where there’s an abundance of land for the next decade +

    the media refers to these area’s as growth corridors, where greenfield estates pop up, land everywhere & new shopping centres. The actual capital growth prospects can be very limited in the short term and could be better served placing the funds in a better performing asset.

    All depends where it is, leasing 700sqm in the middle of nowhere could be a stressful, owning 700sqm inner city could be stress less
     
    Codie, 5th Nov, 2019
    #11
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