Need to make a decision ASAP

Advice needed please...sorry for very long post.

I have a IP a lovely 3 bed, 2.5 bath 2 story penthouse apartment in the A.C.T. with magnificent views. It's 4 years old and I've had since new. I originally bought it for myself and kids to move into but we now have a large dog and I don't think she'd cope, so it's been rented since day 1. Apart from 1 disaster tenant this year who trashed it and didn't pay rent, I've never had problems renting it.

I live in a very rundown basic 3 bed house which I've never been happy living in, and needs so much work that in my mind would need a complete renovation of everything in order to make it pleasant and to fix everything. I have not had a working shower for over a year as the whole bathroom needs doing and I don't have the funds. To move into my apartment on day was always my dream ...although I've never experienced apartment living and will miss my outdoor yard.

Current tenants love my apartment and have offered to buy it numerous times. They now need an answer today as otherwise they have another apartment that they will buy and they don't want to miss out on it. They will break the lease and move out if I don't sell.

It's a great time to sell as the market is very hot. I've had 3 agents come through for appraisals but no-one can give me a price. It's one of those very unique properties, and there's nothing to compare to. To get my best price it would be best to auction it. On the other hand my tenants will not wait for an auction they need to either buy now or walk away ( other personal factors affecting their urgency). They have said they will pay me a good price and I've asked them to give me an offer but they won't . They are waiting for a price from me. I bought in the low $500's, and to buy any new 3 bed off the plan ( smaller than mine) in the area you are looking at $670-$800, however other established 3 bed 4 years old are $550-$630 however they are ground floor no views and as agents have said they can't compare.

As a sweetener my tenant has offered part cash and then sell it on paper for "cheaper". I don't even know if that's legal? They say money is not a problem. I don't want to rip them off, nor miss out on a great price for myself. I'm currently unemployed and don't have much super. I'm in my late 50's and this was always going to be my "super".

Another factor is they are about to build another 8 story apartment block right in front of my apartment, which will block everyone's views but being on the 10th and 11th floor I should be ok but I would not want to be staring at another apartment block when I sit on the balcony ( when I live there). I also think once it's been released to market ( maybe next year) my whole apartment block will go down in value considerably, so now feels like a great time to sell...however I'm worried I'll never be able to afford to buy back into the market if I sell now! I also have no idea what price and whether it's better to save agents fees and just do the sale direct with the tenant?

If I sold I may have some funds left to fix my house to make it more liveable which would be great, although I've also got to pay CGT.

Or..
I sell my house now ...prices are highest they have ever been. I still would need to renovate it though ( have no funds but could borrow some) , I then move into my apartment , But I have a very large dog and my kids have many cars and are forever working on them and need a garage and yard. So apartment living right now wouldn't suit our family. I couldn't afford to sell my house and upgrade as everything else has gone up in price, and as I'm not working I won't be able to get a loan.

I really don't know the best way forward and am so stressed about making the right decision. I've been a single parent for so long and have worked very hard to even own a property so don't want to take a backward step. Thanks for reading.

 

Is there an option where you don't sell anything?

 

• Your tenants are prepared to walk away from the deal if you dont act immediately
• Your tenants want you to name your price first

I didn't even read the rest of the post to realise they will run rings around you in this game, and I doubt they are the prepared to pay above the odds if they are also prepared to walk away so easily.

As above... how about you dont sell and let them go. If the markets hot then stage it for auction once they have gone.

I think they know exaclty what they are doing and not so much yourself, which is fine... the last think you should be doing however is acting under pressure though.

 

It's unclear to me why you would be selling at all, other than good market = good price. I am sure you would get more if you waited a few years, even if the market is cooler then.

 

^This

I think the tenants are trying to pull one over you, and trying to score them selves a deal.
I lived in Canberra most of my life (parents are still there), and still have a few IPs there.. prices are going nuts.

If you really do want to sell, then I would take it to market/auction. If the tenants really want your property they will attend.

If you don't mind be asking, where abouts is your apartment?

 

Agreed. If decided to sell, stage it properly and auction it or whatever means most effective.

I would do the same. With cars and a big dog, you would be a most "attended to" apartment owner by the body corp...

Get a loan and do that if necessary. At least you are happy with the outcomes.

That's my 2 cents worth... Hope everything works out for you. Selling is easy, buying is hard.

 

I was in a similar situation. A tenant fell in love with an IP and absolutely wanted to buy it. It was valued at around $700k at that time, they offered $750k but I refused.

My logic was that I was going to be liable for capital gains and stamp duty which would have wiped out any profit if I were to buy a similar house next door so it made no sense to sell.

That was mid 2019 .. that house is currently valued at around $1.2m…. selling an IP can have a massive opportunity cost!

 

Yes there is...but I didn't know if this was golden opportunity to have a easy sale ..no agents fees fees if I sell direct etc...but it is knowing what price to ask etc. I'm probably leaning towards doing nothing right now...although I'm worried once they start building in front of my apartments the value is going to go down, and then I've missed my opportunity for a good price

 

Thanks for your reply,

I's in Greenway with amazing lake and mountain views...which may be partially blocked once they start building new tower.

 

thanks for your reply,

tenants need to buy urgently as they have other elderly non working family members coming to live with them from overseas in a few weeks. They are currently paying a high rent as it's fully furnished and include all bills and originally other working family members were meant to share the place and the rent but that didn't happen so for them it's actually cheaper to buy than continuing paying dead rent money.

 

Thanks
I would just be worried it would go down in value once they start building the tower in front .

 

If you love your apartment and dream of living in it one day, don't sell it. Personally I'd rent out both properties and rent yourself if that was possible.

 

Don't be pressured into making a huge decision like this in one day by your tenants. There are plenty of other people who will be willing to buy your apartment should you choose to sell. Sounds like they are trying to pressure you into a sale and possibly use time pressure to stooge you on price. Giving people time pressure ("sell it to us within 1 day or we are not buying") is a typical negotiating technique and it sounds like it almost worked on you.

Prices can go up and down over the short term, but if you have a good property in a good location, it is likely to increase in value over the long term. If it's a good property, the longer you keep it the more profit you are likely to make.

 

Another option. Why not look at comparable prices units and then add a 20% premium. If they want it so bad and will pay 20% over the high end price range of comparable, then they can have it.

You mentioned new off the plans can go for up to $800k with less views. So ask $1 mill.

 

BC is quite low compared to other blocks about $4k pa

 

how about putting forward an amazing price way above what you cannot refuse ? .... to test the tenant's reaction ? you did write 'They say money is not a problem" and that the tenants are prepared to walk away now if you don't act immediately.

At least this will give you options and makes it easier to decide.