HELP NEEDED PLEASE

If you can ride out the neg cashflow for a couple more years then do that. The market and the rents will come up.

Treat the $8k as forced saving that you probably would have blown on other ‘doodads’. You haven’t made a loss until you sell.

Cheers,
Marc.
[email protected]

“we get sent lemons; it’s up to us to make lemonade”

Hi Cherry pro. – I think LA Aussie made an interesting comment, in that you have not made a loss till you sell. Same with shares, and managed funds. It’s all ‘on paper’. Some investments are long term, and if you can afford the neg gearing, and view it as that way, it may be quite a lot better than flushing all your time, effort and money by selling. Something many here will disagree with me on however is the opposite – you have also not locked in a profit until you sell – the opposite is true too, as it is all on paper, unless you tap into the equity beforehand, and then of course there is nothing to say you would not end up in exactly the same position…..but renovators such as Sam Venutini and investors like Steve Mcknight and Peter Spann also agree- never be afraid to sell a property at a profit to ‘lock it in’ if it helps you achieve what you want, either short or long term goals. Boy that nice Cabernet Savignon tends to get me on my soapbox…… The only other thought is this- I have heard of many an investor that has ‘cut their losses’ in your position, and from that day on never taken any risks again, however educated, and never invested in anything again. Is that what you want? Like Mark said, if you can handle viewing this as a comination of ‘forced savings’ and a partial tax deduction, without causing you /your family major depravation meanwhile, that sounds like the way to go. All the best anyway…..[strum]

Hi Cherry pro

this is a conundrum for many (as you no doubt realise). My view is to stay tuned to the market shifts……if you believe it will be many years before a return to profit occurs, consider the alternative options you may be forsaking by remaining in a zero growth market. Should you find something that promises better returns, I’d reckon that selling may be the go. Remember, you are currently losing $8k per year….that’s not small potatoes if it’s early in your investment career, and each year it’s compounding, leaving further behind (when the real numbers are in) to making a recovery!!

all the best

wilrose[thumbsupanim]

Hi Cherry

There have been lots in the same position as you.

You may be a bit young to remember the scandal of the “two tier” marketing in south east Queensland in the early 1990s where interstate investors were sold properties $20K-$30K over their value, i.e. $120,000 townhouses were being sold for $145,000.

Much gnashing of teeth, endless articles in the papers and even court cases. Some people sold out and made big losses. I remember newspaper articles headed “Sell your Gold Coast Property now, there is too much building and you will never make any money”.

Some people held on, and those townhouses would now be worth at least $250K.

In 10 years time when your unit in Hornsby is worth around $800K-$900K these days will be a distant memory.

I would suggest you hang on and let time work its magic.

Cheers
Marg

A friend of a friend was recently in a similar situation. He was amazed to discover he didn’t even have the second option. The bank refused to let him sell his unit unless he could provide cash to cover the shortfall between selling price and outstanding debt. He found that nobody would lend him the difference as he had nothing to offer as security for the (large) loan.

Talk to your lender. You might find you’re wasting energy weighing up options that don’t exist!

May I simply ask how you can make this statement? You sound like you are stating a fact, whereas I cannot foresee how this is even a distant possibility*!

F. [cowboy2]
* Barring hyper-inflation