Too Little Too Late!

Yeah, sell the worst tenant rather than try to evict. Selling is quicker and easier and you get money at the end of it[biggrin]

pay down the loans on the other two better propeties and then see where you sit.

As for shares: well I’m just now selling my shares (should have sold 2 weeks ago but…) as I’m seeing interest rates rising, US economy sucks hard and we have just come off the back of a great growth period in aussie stocks. Mind you I’m selling because I’m not a real share market afficionado and I’m pleased with the returns I’ve got so don’t go thinking the share market wont work. But as was said property offers better leverage and you can take personal action to increase equity (heck just giving the outside of a house a good wash can raise it’s price).

Surrey

Angel,

Firstly let me REALLY commend you on your efforts so far.Your enthusiasm for financial independance has been put into action as opposed to others who just talk, so I feel for your plight but you are on the correct road, DONT GIVE UP.and “YOU” probably are half the reason for your woes.

Reading between the lines, you seem a very compassionate person, ie tenants with 7 children etc is no problem except for the unfortunate small matter of no rent coming in which is making life for you miserable.

I bet you are on a first name basis with all tenants!!
Time to get tough and correct the things which NEED correcting.
Remove yourself from the emotional connection and employ a Property Manager (I know this is not your wish but your success at this stage must come first)
If the manager doesnt perform quick smart, get another, time runs out very fast when you fall behind in repayments.

Once the non paying elements are removed and replaced by cash paying type tennants, gradually increase your rents EVERY renewal by small amounts consistently, rather than big hits occasionally, to ensure success of your venture.

This is what I would do and have done in the past, for what it is worth.

Keep going,
Brady5

I totally agree with the above advice regarding the sale of one or even two of your properties.

Just regarding your potential move to stocks, just like property, shares are not without risk and complexity either, especially listed property trusts. Do your homework and always adopt a critical attitude.

I make great returns from stocks and options and it does not even depend on a booming stock market. But this only happens by implementing a variety of strategies with great care. Even then, in the right market with the right stategy, nothing beats what an individual can do with real estate, specifically positive geared real estate.

So my advice is to alleviate the current situation and take a step back to learn about all investments and economic cycles with a critical attitude. It does not matter if its property or stocks, if you do the right things at the right times, the possibilities are endless.

Hi PA

Yes you have done very well for yourself. But selling will be costly – you have variouse fees and CGT etc.

Do you have any equity in your homes? Could you increase your loan temporarily while you get back on your feet? Please try to keep the payments on your loan up to date in case you wish to refinance. You will have to accept a higher rate if you don’t.

Are all of your loans IO? if not, you should look at switching to reduce the repayments.

Your lender may also be able to extend your loan (if PI) resulting in a lower repayment etc etc.

Good luck

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Hi Property angel,
This is just my second post..but reading your message I thought I might add that living in one (as PPOR )before you sell it will help the GST problem and save $$$if you are renting else where…also whilst living in one before you sell it AND with the extra time you have between temp jobs maybe you can do some small DIY renovations to inprove value….
…
hope your work situation improves and good luck with whatever you decide to do..keep us posted.
(I really enjoy your posts)
Rumin
living in TOKYO
(IP’s in QLD)

I wouldn’t recommend putting too much faith in Centrelink payments. They can be cancelled by the tenant with a phone call. They can be set up one day and virtually cancelled the same day. Wether you get the rent, regardless of how it is paid, or not ultimately depends on the quality of the tenant.

I was recently in a similar position to you – just beyond my financial limit. I sold a property that had made significant capital gain even though it was a positively geared property. The financial pressure was lifted immediately. It was well worth the selling costs.

Anne.

I’m not sure how much equity you have in each of the 3 properties. And I’m not sure how long you have had each of the properties. If you do have a reasonable amount of equity in the properties one option is to sell one of them and reduce the debt in the other 2. Presently yoou seem to be be far to highly negatively geared for your income. Anyway I would also suggest getting a Property Manager to look after the properties. I have been down a similar path to you. I used to look after our properties and although there was a saving in management costs the dramas we would have with tenants(selecting the wrong ones) was not worth the savings. My wife and I have 5 investment properties in Townsville(inc 2 blocks of 4 flats) and all are managed. Its the only way to go. I would not rush to sell rel estate just to get into shares. With property you should always aim to ACCUMULATE over a period of time. However at the moment in yoyr current situation maybe you should sell one to ease the cash flow problems.
GOOD LUCK