This Will Not End Well !!!

This Will Not End Well !!!

# 7 The Haven

Woodvale

Link to Listing on Real Eeastate.com;

http://www.realestate.com.au/property-house-wa-woodvale-107221124

Up for Auction Saturday 26th March Price Unknown but I am guessing this group 

(That's Right Group) of Investors are going to be trying to get more than the 

$642,000 they paid for this house in July 2006?

There are many investors just like this in Perth so read on the story is interesting?

Remember If you agree & think that our property markets are crazy & innocent people are going to suffer. 
Do something circulate a link to this site & look at some of the other posts or topics I have put up. 
 
Spread the word on Facebook / Twitter or Just discuss around the Water cooler at work. 
The better people are informed the sooner we have a sensible property market for our friends & families!! 
   

(FYI: Don't think the high price was because it is 1091 Sq Mtr Block!! Look at the Shape of the Block!!)

Sales History

First Bought by Family "A" May 2003 for $337,000 

Family "A" then Sells this House Sept 2006 for $642,000 

to Families "B","C" & "D"

That's right bought by 3 Families all living in the same street as a investment

Firstly well done family "A"  Selling at the very Peak of the Market. 

Almost doubled your money in just 3 years.

But what was families B/C & D thinking? 

This house had sold just 3 years earlier for $337K they should have known this after all 

THEY LIVED IN THE SAME STREET

OK even if you believed in the MYTH that property doubles every 10 years, this property should have only gone up 33% in 3 years ??? so $337K + 33%= $448,000

NOT $642,000

It would have been such a easy exercise to apply this simple logic?

But Greed is Good!!

Now no doubt the 3 families that pooled their resources thought to themselves this house has just gone up 100% in Just 3 years so if it goes up the same amount again in 3-5 years we can make $330K perhaps even $650K in Capital growth?

What could go wrong?

A property like this in Woodvale would rent for no more than $450 PW or $25K PA ,

The holding costs on this property would be around $50,000 PA 

So every year for the last 4.5 years these investors have LOST $25,000 PA

Perhaps after tax deductions the loss could be reduced to $20,000 pa.

So after paying top Dollar in 2006 for what I would describe as a mundane rental property, what would  these canny investors will need to get to just BREAK EVEN?

$642,000 + Stamp Duty $25K + Selling Costs $20K +$80K Negative rental return, + $10K Patio & Paving , + Any unknown minor improvements. TOTAL=$777,000

Just to BREAK even not even make a single dollar they will need to get!!!

$777,000 

So what chance of this happening? 

ABSOLUTELY NONE WHAT SO EVER!!!

Just look at this property in Woodvale listed for $749,000

http://www.realestate.com.au/property-house-wa-woodvale-106951073

This house has been on the market since Oct 2010 & still cant attract a buyer @ $749K

Then there is this property @ 15 Richardson Court Woodvale listed for $610,000
http://www.realestate.com.au/property-house-wa-woodvale-107241052

Both these houses represents far better value @ $749K or $610K

Look for yourself & compare !!! That's why I dont like the chances of
#7 The Haven getting anything above $600,000

$600,000 am I being too harsh?.... Well look at the Laundry / Bathrooms last refurbishment was  in 1983 when the house was built, Then look at the VINYL WRAP Cheap Kitchen Reno? (That would have to go)
Then step back & look at the Evaporation Air Con on the Roof (How old is that)

But I could be wrong? 

If you asked me in 2006 would anyone be stupid enough to pay $642,000 for a less than average house I would have said no!

Every market need a Greater Fool.

Just don't be that fool in today's market unless you can afford to take a HAIRCUT that these three families will shortly take!!

I will not be wasting my time attending the Auction on the 26th March these owners are going to be looking for $750,000 plus for a under $600,000 house sorry life is too short to waste ones time.

But if anyone does go, please post the outcome in the comments section.Starting Bids the auctioneer was trying to draw & what it gets pass in for?

I hope for these 3 mum & dad investors I am wrong & they get their price.

But then again I would hate to see another family pay way way way too much?