I am a little embarrassed that my name is attached and responsible for this post that has become a soap box for some doomsday individuals.

For the record the few rational posts I have recieved have given me great food for thought and the reduction in interest rates has steadied my nerves and created a little party in my pocket.

enough said
Nat

Hi Tony,

Thanks for your response but just to clarify this property was not originally bought as an investment it was a ppor which we actually built ourselves and I never had the idea i would make shit loads from selling as that was never in my plans. However i did expect modest growth of between 4 and 7% would offset the holding costs of the property.

As a landlord i don't begrudge my tenants enjoyment of the property and I do everything i can to ensure their needs are met by the sometimes lazy and inefficient property managers that i am forced to deal with and believe me I have been through a few.

We actually can afford to hold but my question the experienced people on this forum was quite simply is it worth continuing to hold or in their opinion would they sell.

There seems to be alot of agro out there I am not sure if people are just frustrated at the market themselves but I would have thought this would have been a good time to share experiences and support one another rather than attacking each other.

I disagree with Scamp about massive job losses in the mining industry. The mining boom is underpinned by the asian markets which have esacped the financial meltdowns of  the US and Europe virtually unscathed. Australia is indeed a lucky country at the moment as its economy is not underpinned by financial markets like the US and Europe but by the resource sector largely coming from WA where my properties are. We will have a degree of insulation from a complete meltdown due to this simple fact but that is not to say that we will not feel any further retraction in the economy as clearly we will.

Thanks to those people who have remained rational and tried to give a balanced view

Natalie

HI,

Thanks for the feedback. We owe 530 000 realistically at the moment we could expect between between 550 000 and 570 000 to sell but whether it would sell is a problem as it is at the top end of the market for the area and there are not alot of buyers around a the moment. The house was originally our ppor so it was never bought with investment in mind it just turned out that way. At the height of the boom the value was 700 000.

I couldn't say we even come close to covering the debt of the property outgoings per month are about $5000 and incomings about $2500 (taking into account the tax deductions and depreciaiton as well as rent)which is a pretty significant shorfall.

We have a depreciation schedule which gives alot of deductions as the house is only 6 years old. My husband works in the mining industry and has a high income so the negative gearing is ok although unfortunately the house is in joint name so we don't get the full benefits. We are covering the costs fairly comfortably at the moment but there is no room to move. I just don't see any up side for at least three years and then it will be a couple of years after that before there is any real gains.

Thanks
Natalie

Thanks everyone for your comments. We have an appointment with an accountant hopefully they can shed some light on whether this property is a viable one. I think it really all depends on how slow the Perth market is going to be now that the boom is over and for how long. Anyone know where to buy a good  quality "Crystal Ball".

Nat

HI Jeff,

The house is one of the most expensive in the suburb  about $50 a week over the average. But it is valued about $200 000 over the average as well which will make selling more dificult I guess. Being an outer suburb probably not the best scenario for an investment as the value is largely in the building (which a tenant can damage) and not the land. I am particularly jittery about it at the moment as our tenants are moving out and I am not sure if we will be able to get new tenants at the same price and then the issue of how well they look after the property is looming.

We designed and built the house to be our perfect home and planned to stay there forever but of course life had other things in store for us which is great we have started on new journey but letting go of this house is difficult. I can rationalise based on what I have read and learned about property investing why not to sell ie "Never Sell" "The bigger the asset the better" etc but I am not sure how much of the rationalisation is skewed by emotion. Then I can also see good reason to cut losses and move onto something else ie financial burden and better yields elsewhere.

Unfortunately some properties are not just bricks and mortar.

Nat

Hi Jeff,

Thanks for your comments. It is my understanding that as we lived in the property for 5 years prior to it becoming an IP then we can continue to claim it as our PPOR for a further 6 years and not be subject to CGT. As for the stampy duty for selling into trust that is probably what I am trying to weigh up at the moment it will be around $30 000 but will allow for unhindered claiming of the interest and by being in the trust the asset is protected ( we are in a high risk group for litigation) So I am trying to weigh up do I sell outright which would incurr further selling costs as well as stamp duty on new IP but one that is performing better growth and rentwise. Do I sell into trust and make an immediate loss in terms of stamp duty which will lead to gains later on as this property wil be negatively geared for a long time, or do I just sit and hold and ride it out.

My gut and my crude attempts with the figures tell  me the property is costing me money but I am attached to it emotionally which means my judgement is clouded. I know if I wait long enough it will make money but I can't decide if it is worth the lost opportunities in the meantime.
Nat