Hi all,
Would like to hear your opinion on my first IP purchase...
A bit of background:
The pest inspection results (visual only):
My questions:
Will it be better if I just bite the bullet and cancel the deal? (forgoing the inspection and valuation fees, plus some conveyancer fees)
Would like to hear your opinion on my first IP purchase...
A bit of background:
- House price is at $190-200K mark at postcode 2320 close to shopping centre on a relatively quiet street, gross yield 7.5% (already tenanted)
- I have enough to offset the entire loan for 10 months or so (waiting for our off-the-plan PPOR)
- I have sent the 0.25% holding
- Contract have been signed, but have not been exchanged (currently with my solicitor). Waiting for finance approval (I had pre-approval beforehand) and vendor is willing to wait (they don't want cooling off period)
- property is about 40 years old, original kitchen and everything (so quite old)
- We ordered upfront valuation, result come on the dot of our offering price
- Some of the Pest inspections results concern me and would like to hear your opinion...
The pest inspection results (visual only):
- Moderate to extensive wood rot in several places: Shower recess, window, laundry doors and flooring timbers adjacent to shower recess + potential wall framing timber to have wood rot. The inspector said this can attract termites "the degree of risk of subterranean termite infestation to the overal property is considered extremely high".
- Roof covering: Major defect - material detoriation as concrete tiles lost the glazing due to age. Roof need to be refurbished or reglazed.
- Roof cladding: moderate rust and need to be replaced in the future
- Bedroom 3: walls have moderate damage, according to the inspector, they're due to impact (not sure if accidental or intentional)
- Others: minor defects like rust and gutters that need to be cleaned, broken concrete path
My questions:
- From experience, how much will it cost to rectify the above? The water recess, wood rots and roof really concern me...
- What do you think about the deal so far? The initial numbers work for me which is why I proceed with the offer and inspection. Though right now I am not sure if it worth the purchase with the current conditions.
Will it be better if I just bite the bullet and cancel the deal? (forgoing the inspection and valuation fees, plus some conveyancer fees)