Hi all,
Here is a situation for a friend of mine. The apartment (2 double, 1 single bedroom, 70sqm on 2 floors) he bought became leaky and Bodycorp is pursuing litigation. Early estimate is $150000 to fix each apartment. I must say that there is no signs of leaky-ness as yet and only the top apartments are affected as other apartments are on concrete block. He currently holds $280000 mortgage at 8%. He wants to sell the apartment and my early estimate is that this apartment will probably go for at max $140000 and that too if it at all sells. There is a high likelihood that Bodycorp will be able to get some percentage of the money back from the developers as they are still in business. On a conservative scale I would think that my friend will be able to get say $75000.
Now something about this particular apartment. It’s situated very close to the Eden Park in Kingsland area. This is on the top floor and at the corner hence have 270 degree views. Probably the best apartment in the block. Yes I am thinking of Rugby World Cup.
So this is what I think. I think he should not sell it instead move out now to smaller rented place. Then rent out this apartment at $400/pw and top up the rest of the mortgage. Before Rugby World Cup, do internet marketing and rent it out during those 6 weeks at a higher rate. He should be able to rent a one bedroom place for himself at $250/pw in the meanwhile till the remedial work starts.
What do you experts think? I think this is such a nice apartment with sweeping views, he can comfortably live there after the remedial works done and can reap the benefit later on when the market turns, if at all he wants to sell it then. I think the key is that he should move out and rent this place so that it becomes an IP and then he can get the tax benefit as well. He is in the highest tax bracket.
Please critic my thought process. Any suggestion is welcomed.
Here is a situation for a friend of mine. The apartment (2 double, 1 single bedroom, 70sqm on 2 floors) he bought became leaky and Bodycorp is pursuing litigation. Early estimate is $150000 to fix each apartment. I must say that there is no signs of leaky-ness as yet and only the top apartments are affected as other apartments are on concrete block. He currently holds $280000 mortgage at 8%. He wants to sell the apartment and my early estimate is that this apartment will probably go for at max $140000 and that too if it at all sells. There is a high likelihood that Bodycorp will be able to get some percentage of the money back from the developers as they are still in business. On a conservative scale I would think that my friend will be able to get say $75000.
Now something about this particular apartment. It’s situated very close to the Eden Park in Kingsland area. This is on the top floor and at the corner hence have 270 degree views. Probably the best apartment in the block. Yes I am thinking of Rugby World Cup.
So this is what I think. I think he should not sell it instead move out now to smaller rented place. Then rent out this apartment at $400/pw and top up the rest of the mortgage. Before Rugby World Cup, do internet marketing and rent it out during those 6 weeks at a higher rate. He should be able to rent a one bedroom place for himself at $250/pw in the meanwhile till the remedial work starts.
What do you experts think? I think this is such a nice apartment with sweeping views, he can comfortably live there after the remedial works done and can reap the benefit later on when the market turns, if at all he wants to sell it then. I think the key is that he should move out and rent this place so that it becomes an IP and then he can get the tax benefit as well. He is in the highest tax bracket.
Please critic my thought process. Any suggestion is welcomed.
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