I have some older investment properties to my name and I can see as I age they will also be aging .
Lets assume that I just want to stick to my buy and hold long term strategy and in another 20 – 30 years when the cash flow is really needed , maintenance will most likely be chewing through large sums ……
I find essential repairs even now are costing a small fortune . I can’t help but wonder what it may mean to my cash flow in my ‘golden years’
Any bright ideas ?
Only buy properties where the tenant is legally forced to do it all for you.
Remember that it is the LAND that appreciates in value-Buildings depreciate in value. Depending on the location of your IP, the captial growth from the land content is likely to outstrip any losses you incur through maintenance and repair.
Where are your IPs? Are they in areas that have good projected captial growth?
I would just write the maintenance and repair off as a cost of holding the property for long term capital growth. You should be able to claim M and R deductions on tax to soften the blow as well.
If you don’t want the cost and hassle of maintaining mulitple properties, why don’t you sell up your old IPs and buy one new property in a high capital growth area. You could buy a copy of the Residex report and choose an area that has 15% projected growth.
Anyway, that’s my two bobs worth. I hope I have given you some helpful ideas.
Todd Burns
http://www.freepropertyhelp.com.auThanks for the tips . I think I’m reasonably aware of my options .
Some of these properties are in pretty handy locations and have doubled and some in the last few years but the problem remains that some maintenance must be done .
I find if there are quite a few things that are getting buggered like roofs, gutters , HW service ,cladding etc then it is best to see to them kind of one at a time rather than defer everything and find eventually that you are hit with a double wammy of expense all at once. Actually I can tell you from bitter experience , don’t put it all off !
I’m only talking essential maintenance.
So , my options are
a) Sell these high maintenance propertys and do something else .
b) Put up the rents
c) Do something I havn’t thought of yet ?
Thanks Crusher . Anyone have any more ideas ?
Hi,
I had an older IP too that was just one painful and expensive repair after another. The phone would ring and I would dread it being the real estate agent with another disaster. I sold and and it was like taking an enormous weight off my shoulders. I would probably offload the worst of them before you get “past it” and/or maybe put some money aside in a special big repairs kitty.
Investment should be not only a form of income or equity but a means to relax in our sunset years. If it causes worry then it is not a good investment anymore. Plenty more fish in the sea!
Cheers
Caroline[exhappy]
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