Hey guys,
Need help and advice from all u propery experts out there.
I bought this off the plan property in 2005 worth $345K in ACT. 10 mins drive to city beside shopping mall, bus stand , great views & everything within walking distance. It is 1BRM unit.
Anyways property hasn’t gone up in value as much as I thought
in 2010 bank valued it at 380K. I guess I can sell it for 390k atleast. Rent is $390pw. So what do u guys think.
1. Should I sell it and walk away ? Won’t make much out of it due to tax and all.
2. Should I start paying the principal down so it becomes +cash-flow down the line for me sooner ?
3. Should I just hold on & keep paying interest till someday with rent increases it will become + cash-flow .Your inputs are welcome. I am not a real expert and I guess it shows !
Cheers
Hi Bacchu,
If I were you, I'd cut my losses. The longer you hold on to it the worse off you become.
The money you are pouring down the drain may be used for better income producing investment.
Take care.
Angel
To things I would be thinking about:
1. If you are going to sell you might want to think about reinvesting elsewhere. You don’t want to little profit you did make to get gobbled up by living expenses.
2. How long it is going to take to be Cashflow+
If it is going to take ten years then that is a lot of money you have to invest before you see a return. If it is only going to take a year then it might be worth holding out.3. What are your investment goals? You should set strategic goals of exactly what you want to achieve from your property investments. Do you want a certain amount of passive income? Do you want to achieve a certain amount of equity.
Knowing EXACTLY what you want will help you decide whether or not this particular property lines up with your goals. If it does then keep it, if it doesn’t then sell it an reinvest in a property that does.You can easily find property that will generate a positive cash flow. Especially if you already have a bit of equity.
4. You could sell the house by providing owners finance and automatically get a positive cash flow. One of the members of this forum did exactly that. They let me post their story on my blog. http://bit.ly/iwTnVZ
Ryan McLean | On Property
http://onproperty.com.au
Email MeHi Bacchu
$345k for a 1 beddie apartment in 2005 (I’m assuming in either Belconnen or Woden) sounds a bit rich. You can pick up comparable off the plan properties for around that price today.
I wouldn’t say it’s a case of no growth in the area (because other Canberra investors have done well over this period) – I think you may have just paid a bit too much at the start.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
in 2010 bank valued it at 380K. I guess I can sell it for 390k atleast. Rent is $390pw. So what do u guys think.
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