Hi everyone
I have a couple of questions re my first positive cash flow property. I went into it last year with little knowledge, ie without reading steve’s book etc. and i believe i made a number of mistakes, so have a read along and a laugh but if you could help me at the end that would be great.
purchased 2 3br houses for $95,000
renovations on top of that $4000they are in a town where the population has been steadly declining, currently poputlation is about 21,000 but each census it has dropped by about 2000 people each time.
The properties are rented for $235 per week and they are not in a very good street, neighbourhood etc. The lease is for 6 months and after that i do not believe i could get that rent again. probally around the $200 per week
i have seen the properties they are not in a bad condition, but the area is undisirable.
basically it looks like i have an opportunity to sell and make a small profit. what would you guys do ? I take the money and run etc.
I know people say, area’s can improve etc, but after meeting some of the neighbours in the street. where one of them said to me she wanted to rent it so she could live next door to her husband. I asked her why she wanted her own place, she said because me and my husband fight but we have to share the car.
cheers
…I know that woman!
I got the impression from Steve’s book that he was fairly agressive in his buying and selling of properties. Again, my impression, it didn’t sound like he held for very long – mind you he’s only been doing the PI stuff for a few years himself!
I thought a lot of times he saw an opportunity, realised a profit then used that in for a deposit on the next place or two. Like the fable of the shoe maker.
I could have completely missed the point there, though. You see him in the forum occasionally, maybe he’ll answer…
My advice – sell while you can. Its not my type of investment. Rents going down and population declining. Offload before interest rates rise too much more.
Hi There Snowy,
well i have to say that you really didn’t sell me on the town and if the rents start to decrease then i will bet my last dollar that values will follow. Pull out now and sow the money into a more fertile field.
But always look at the positive- you will never make that mistake again and it didn’t even cost you money so all is fine!!
Positive cash flow is good but the real money is made in capital gains.I’m with the others – sell while you can.
A profit now is better than a loss later.
[
]“All our dreams can come true, if we have the courage to pursue them.” – Walt Disney
Why not contact the council first and find out if any major projects are planned for the place?
If there’s something on the horizon like a high speed railway, etc then it might improve again….
My gut instinct however based on your information would be to sell and find a better town.
Cheers
Richard
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