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What to do, go forward or pull the pin

Discussion in 'The Buying & Selling Process' started by gman65, 20th Sep, 2015.

  1. gman65

    gman65 Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    267
    Location:
    Brisbane
    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 ..
     
  2. Bran

    Bran Well-Known Member

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    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?
     
  3. Biz

    Biz Well-Known Member

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    18th Jun, 2015
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    1,473
    Location:
    Sydney
    Old house, comes with the territory imo. Roll with it.
     
  4. gman65

    gman65 Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    267
    Location:
    Brisbane
    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 :cool:

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

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,501
    Location:
    Sydney
    Congratulations!
     
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