What to do, go forward or pull the pin

Signed contract on place.. B&P was performed last week. Place is 40 years old or so, Came back with a few things that wasn't immediately obvious. Roofing looks like need moderate repairs to full replace in next 12-24 months I would say (not leaking according to inspector, but surprised its not, ha). A fence needs replacing, and some plumbing probably due for replacement very soon. So will add up over time.

General building structure itself is good, and no structural issues, no leaks/moisture inside.

So anyhow, I came back to the vendor with $5k reduction request to address issues, which I didn't think was too unreasonable. I'm estimating probably will need $10k in next 3-24 months to address the major things, and then beyond that there will be a bit more minor stuff. I wasn't too much of an arse, but did mention I do reserve right to cancel under unsatisfactory B&P if they do not accept the reduction.

Now I'm at the point where they will either accept the reduction, or they say nope, and I have to decide if I want to bare the full cost of these costs myself, or pull out.

Tenant is in place, but I figure some of the things are going to need addressing if they move out at renewal in 6 odd months or else may be difficult to secure another.

Price paid is around median (which I think is a bit understated for the suburb right now), did offer a fair bit more than asking, in competitive market. So no "bargain", but probably fair value. Gross yield would be about 4.5% which is pretty good ($60 or so out of pocket), location, distance to cbd is pretty good too. May be difficult to find something similar at the moment. I'm thinking that in 5 years if Brisbane moves, these costs will turn out to be insignificant, but if not it will be a pain in the butt.

I guess my general question is, are you happy proceeding on a purchase, if you know it needs fairly immediate and not insignficant repairs? The plus side is that most of it will be depreciable, so will get some of it back.

I think I'm probably answering my own question but anyway interested in thoughts ..

 

I've historically been pretty strapped with each purchase, so have never had money set aside for major repairs - so in my individual circumstances, at an otherwise fair value. I probably wouldn't proceed if there were comparables that didn't need the work or, add those things to your purchase price - still a good buy?

 

Old house, comes with the territory imo. Roll with it.

 

Well happy days. They accepted the reduction, so will be able to put some of that towards some of the repairs. Got a bit of buffer, but no fun eating into that if I don't have to. That's for the next deposit

Main thing is that its not fibro, which is not the easiest to find up here for that age.

 

Congratulations!