Question from Agam updated on 4th July 2013:
I bought an investment property for $453,000 over a year ago in the Wellington area with a GV of $450,000. The GV has dropped to $415,000 (disappointing as I feel it is a good quality house). Do you think it is better for me to sell it or keep it as a rental property? It is rented at $550 per week. The tenant has just left and I plan to rent it $560 a week if I can’t sell it.
Our expert Ron Hoy Fong responded:
GVs are only a guideline for valuations, they are often wrong as they are based on the average sales value of properties in the surrounding area and that's assuming your house is of a similar average quality. GVs are already out of date when comparing with the market value, a check on www.qv.co.nz will give you a more up to date value. Wellington is currently entering into a boom market and my suggestion (although not having seen your property) would be to keep the property for at least another two to three years as values peak and interest rates remain low. I suggest also getting an up to date rent appraisal as I am sure rentals in Wellington will have increased more than $10 per week.
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