Wanganui house values and yields

[transit]

Hi all, i've got a house in Wanganui East that i want to sell and would like some ideas on what values are. I've had an agent appraise it at around $90k and she said that it would be marketed to investors. It's currently rented at $160pw which equates to a gross yield of 9.2%.

Does this sound like a good yield for an investor or should i be a bit greedier and try and list it for about $105k (7.9% yield)? Can anyone advise what the average yields are for houses in Wanganui?

I've searched trade me and realenz and everything seems to be listed at around $130k plus. Perhaps i should try and sell it with an owner occupier in mind who will probably pay more as they're not interested in the returns?

[Monid]

Hi Transit

I'd talk to some other agents and see what they say. Personally as an investor I wouldn't touch a 9.2% yield in Wanganui, but there are plenty who would. I would have thought that you could maybe do a bit better.

Is there any time urgency in terms of sale? Perhaps the agent has priced it to sell fast.

David

[Gerrard]

Hi Transit I used to have a couple of properties in Wanganui but sold up at the end of last year. I know by that stage yeilds had dropped dramatically, so may have gone down even more.

I wouldn't buy anywhere in Wanganui on 7.9% these days, but I might be fussier than the average investor now.

Wanganui East is most definitely a rental area, but there must be home owners who want to live there too. I guess it all depends on the street.

Gerrard

[SuperDad]

I've searched trade me and realenz and everything seems to be listed at around $130k plus. Perhaps i should try and sell it with an owner occupier in mind who will probably pay more as they're not interested in the returns?

I would always try to sell to home-owners first. They will usually pay a better price. (The exceptions might be where the land is subdivideable, or big enough to take an ancilliary dwelling.)

One question: If most properties in Wanganui are $130K+, why has the RE agent appraised yours at $90K? Is it really run down? Has the agent picked you as an overseas vendor who might be out of touch with the local market? Did the agent give you any comparable sales in her appraisal?

Paul.

Paul.

[Philmc1]

Hi Transit

Price seems very low unless it's run down or on top of the railway line. Have 3 properties there, all $100,00 3 years ago, now conservatively from agents around 180 to 200,000. What did you pay? and when ?

Demand for bottom end of the market rentals is low as there a lot in this category so perhaps your sales market is not too hot. Rental demand is still good for good family homes in good locations, even Aromoho where I'm getting 210/week for 2 properties.

Get in touch with Gordon Munro at the Professionals, if you haven't been to them yet - he will give you a genuine appraisal.

cheers

Phil

[transit]

Hi guys, thanks for all the feedback.

The original appraisal was done by C21 who also manage the property (not too happy with the management and communication from them btw).

Monid: No, there is no urgency to sell. I wrote a list of pros and cons of holding it or selling it and the benefits of selling outweighed the reasons to hold it.
Some of the main reasons are:
- the pains of managing my property manager from Australia,
- maintenance issues,
- a feeling the market there may have flattened,
- better things to do with the $ over here,
- hassles with doing a NZ tax return,
- lazy dollars in my equity which could be leveraged better over here.

Superdad: I think the agent valued it at $90k as she suggested it would be marketed to an investor and thought that the rental return equated to a reasonable yield that would interest an investor.
The house is in Kiwi St if any of you are familiar with the area.

I had an offer from a local who has a bird dog business selling properties to investors for a fee. I am thinking of using her services to sell the property as i wouldn't have to pay agents commission, but not 100% sure yet. BTW, can anyone tell me what agent's commission on a sale of $100k is?

Phil: I paid $50,300 for it in March 2004 and then spent $9,500 on a reno. Thanks for the tip on the agent. Coincidentally, i have just emailed a different agent at the same agency to arrange an appraisal. I will call her tomorrow and ask that she take Gordon with her.

[muppet]

Hi Transit

You asked

BTW, can anyone tell me what agent's commission on a sale of $100k is?

Usually around $500 + 4%. Not sure if GST inclusive or exclusive.

Regards

[SuperDad]

You'll need to add GST to the figures Muppet has given.

Paul.

[Muddle]

Ripped off

Did a drive by this morning and the house you mentioned seems qiute tidy. The street is also quite a good one. The only obvious problem I could see is its close association with with a large block of state houses. about 100m away in the next street.

What did catch my eye was a house nearly opposite yours Transit, which is on the market. I then drove to the agents office and picked up a flyer. They are asking $145k for a house which seems only slighly better than yours !!!

http://harcourts.co.nz/search/proces...60734&x=25&y=7

I know some agents are not trustworthy but this takes the cake. My estimation after a quick drive by was the house was worth about $120 - 130k without having a good look around.

Would be interested to know who that agent was who gave you the $90k quote ?. I know most of them here in Wanganui and would like to give this one a wide berth. Send me a private message if your not comfortable making it public.

Overall the house and close area seem agreeable. If I was you I would list it for at least $130k and be prepared to sit on it for a while. Keep the tenants happy so that you still have an income while it is on the market, either by reducing the rent, making the last two weeks free, or undertaking minor renovation/s to make the house more attractive and therefore more saleable. Or all of the above.

Good luck Transit. I hope I have been of help

[Philmc1]

Hi Transit

Agree with muddle. That street and going on what you paid was a market price or less at the time plus the reno must put it in the 130 to 140000 bracket. I know that when I was buying 2 to 3 years ago Castlecliff houses were selling for 50,000 and are now around 130,000 if reasonable.

Good luck with Gordon, you would have the combined efforts of three agencies selling the property - quite a sales force, and hence possibly multi offers if your in the right price range.

cheers

Phil

[shahil.nazia]

What are the better areas in Wanganui? How's Wangaui East? What are the 'no-go' streets in Wanganui East and what are the better ones?

Cheers,
Shahil

[Philmc1]

Areas of Wanganui

Hi Shahill

Wanganui seems to have pockets of good and bad, often in the same area. Drive down a bad street, turn the corner and you're in a good street of respectable homes. East near the railway line isn't too good I believe.
Springvale appears to be the demand area after St Johns hill but returns aren't very flash out that way. Parts of Gonville, Aromoho are good, Bastia hill area and
the flat area below it close to town are good suburbia.

cheers

Phil

[transit]

Thanks for the feedback guys, much appreciated. I've had the Professionals appraise it between $100k - $110k with a suggested listing price of $110k. I've replied with a few questions and will let you know how i get on with listing it.

Muddle, you've been a great help with your advice and i think i'll try and list it for something close to what you suggested as i'm not in a hurry to sell. I've gone through my old emails but can't find the one from the original agent appraising it at $90k. I can't remember the agent's name but it was someone from C21.