Singing Pig

Hey.

I'm new but in a bit of a dilemma. I have investment property but needs a little work. The problem is that i'm moving back to Australia this summer and not sure if i should sell up to save the hassle or keep it as it is a little cash cow. I hear that it is pretty hard to sell a house a the moment and i think it might be harder for this one because it is split into four flats. But i don't want to have to deal with fixing things from the other side of the planet. Also i would like to put the money that i have to buying a house in Aus instead of doing the fire doors for this property. Is now a good time to sell? What would others do here?

Thanks 

""Also i would like to put the money that i have to buying a house in Aus instead of doing the fire doors for this property"

you cannot offer folks accommodation in flats if you do not have fire doors ....  what on earth are you thinking about ????  

if you dont want to comply with the regs here for fire safety - then sell it  

legally you cannot manage a property here from the other side of the world - you have to employ a manager.

Thank you for your reply. 

The property is currently managed by a charity who have only today informed me that the fire doors need replacing. Now the decision is to replace them before i go and have no money to buy my own place in Aus but have cashflow OR sell now and take whatever is in the property. I have no problem complying with regs, complying with regs is not the issue. I was wondering if now is a good time to sell a property or should i keep a property that provides a good cashflow?

Maths is the key...

What did it cost you?

Do you still have a mortgage, if so, how much?

What is it worth - real valuation?

example:  Cost £200K   mortgage £50K   Value £300K = £250K equity

selling now at Below Market Value  (25%) (knowing that new owner has work to do) = £225K   repay mortgage leaving you £175K in cash.

Thank you so much for your reply.

Paid £90k Mortgage £70k Value about £130k

Work needed about £5k. 

Income per month £1040 (£260 per flat per month)

Now THAT is a big problem. Is it really worth selling at a 25% discount when it makes such good cashflow? Should this be taken into account? Do i want the hassle of owning a property half way round the world?

Selling at £105K sounds reasonable, gives you £35K cash, which is a reasonable return.

Buyer would cover purchase costs and do the required work, which would probably add another £10K to his/her costs.

Sounds like a win-win deal to me.

Am I missing something here? If the property was bought at £90k, selling it at £105 gives a return of £15k regardless of how much the mortgage is – not £35k.

Another point to take into consideration is how long you’ve owned the property.

my point was to have £35K in cash, not the level of ROI, probably my poor choice of wording.